According to the NYT, the government is planning a takeover of mortgage giants Fannie Mae and Freddie Mac, which own $5.3 trillion in mortgages. What does this mean exactly?
Well, Ali Velshi, CNN's senior business correspondent and host of Your $$$$$ and Minding Your Business, just gave the economy-for-dummies run down of what's happening here.
It looks like the cost of the government's intervention could end up being tens of billions of dollars and will probably be among the most expensive rescues ever financed by taxpayers. That's right - TAXPAYERS.
The thing is, regardless of your ideological stripes, the move is essentially a necessary one. Both Sen. Obama and Sen. McCain have expressed their support for the plan.
As a result of the government-conservatorship, the cost of borrowing for the mortgage giants should decline, and they will continue to buy and sell home loans.
Make of this what you will people. I am no money maven, but as I understand this is a BIG DEAL. And I know the economy will be of paramount importance for me in the upcoming election.
[Sources: nytimes.com, CNN]
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