Fannie Mae and Freddie Mac may sound like two characters out
of the old West, but Fannie Mae is the Federal National Mortgage Association
and Freddie Mac is the Federal Home Mortgage Corporation and they're both in
big trouble. The big two have liabilities of $5.3trillion outstanding. This is
as big as the entire US
national debt, which has ballooned under Bush's stewardship.
Hedge funds are in the news again. They don't much like
being in the public gaze. We wonder why. Does their speculation cause prices to
go up? Do they drive firms into bankruptcy so workers lose their jobs? These
are the questions being asked. Let's see what they get up to.
The immediate cause of the sliding dollar
is not far to seek. It’s the US
deficit with the rest of the world. Last year the USA imported nearly twice as much
as it exported. Their current account deficit stands at 6% of national income.
If a country is spending more than it’s earning, then it has to pay for the
difference.