US Mortgage Debt Exported Globally
The Economist and the New York Times have excellent articles this week about Fannie Mae (FNM) and Freddie Mac (FRE). According to the New York Times, $1.5 trillion worth of securities issued by FNM and FRE are held around the world. The largest investor by far is China, with $376 billion. Japan Russia, Luxembourg, Belgium and Britain also hold large amounts. "No less than the international perception of the credit quality of the U.S. government is at stake," was the comment of Richard Hofmann, an analyst at CreditSights. And the Economist writes that: "Their importance (FNM and FRE) lies in what their rescue says about the financial system... At Fannie and Freddie and, shockingly, at the investment banks, the profits were privatized, but the risks were socialized." Other news from around the world follows:
FDIC was one of the lenders giving out high interest rate subprime loans. Beal Bank is suing in US Court. Wall Street Journal
Despite recession, Boeing (BA) and Airbus have a backlog of orders. Only 10% of orders from US. Economist
£3.5 billion HBOS fundraising: investors only take up 8% of the offering - a clear message about bank stocks and their desirability. Telegraph
"The global economy is at the point of maximum danger." Telgraph opinion piece: How will regulators handle it?
EU plans to cut farm tariffs by 60%. This may help agricultural exporters like US, Brazil. Globe and Mail
Intel (INTC) accused of "bribery and corruption" by EU; may levy fines. Intel controls 80% of global CPU market . Deutsche Welle
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