This is relatively old news, but still important nevertheless.

With home market in turmoil, the next big slice of home loan news has hit the fan. The government wants to bail out the two big names in home mortgages: Fannie Mae and Freddie Mac. The two companies can’t pay their bills and instead of our government letting market forces work themselves out, they want to make sure that the tax payers help out the big business in their time of need.

“The government officials said that the administration had also considered calling for legislation that would offer an explicit government guarantee on the $5 trillion of debt owned or guaranteed by the companies. But that is a far less attractive option, they said, because it would effectively double the size of the public debt.”

The New York times has one of the many articles on this incident:

Edit:

It looks official. The government has pledged its support for the lending companies. It’s insane; and more of the same.