As property values and the financial market plunge into a proverbial black hole, the French decide that is not enough and push the switch on the CERN Large Hadron Collider (to you and me a black hole making machine). Well if some theories are proven correct there wont be much time left to worry about Government intervention. If you wake up one morning and 1. The lights do not work (and there's no Sun - at all, ever) and 2. there's no bed (because there's no matter) then you can stop worrying about your mortgage payments and the fact that the US mortgage loan lenders Freddie Mac (Federal Home Loan Mortgage Corporation) and Fannie Mae (Federal National Mortgage Association) will be placed under greater government control. The soaring (another cause of Global Warming? - well somebody has to say it) foreclosure rate has steadily dented the level of market confidence in the two mortgage loan businesses.

Because they apparently did not read the small print and have found themselves responsible for paying back loans if they are defaulted on (you should have seen the look on their faces), the high foreclosure rates have meant that Fannie Mae and Freddie Mac have lost billions of dollars (that's a lot). Between April 2008 and June 2008 these two loan lenders lost more than $3bn between them. So, if you find a brown paper bag stuffed with a wad of dollar bills you know where it came from.

Just in case you didn't know, Fannie Mae and Freddie Mac are both shareholder-owned mortgage loan lending companies mandated by the US Congress to provide funding to the US housing market. Their recent, and ongoing, heavy losses have by consequence resulted in a sharp fall in their share prices.

Maybe suprisingly to many outside of reality, Freddie Mac and Fannie Mae do not in effect, lend directly to potential homeowners. Both lenders actually act as brokers and sell on loans from their approved lenders to investors.

Both Fannie Mae and Freddie Mac (just who thought up these names) are crucial parts of the US mortgage financial puzzle, as they form the center of the multi-trillion dollar US housing market. They guarantee or own roughly 50% of all the $12 trillion US mortgage market and this figure has been constantly inflating due to other lenders passing on the buck. So, following previous statements earlier this year, the US Treasury has eventually had no choice but to step in and implement the biggest state financial rescue in history, by setting out trillions of dollars in financial guarantees for the two loan lenders over a period of the next 16 months.

Ironically, Fannie Mae was founded in 1938 at a time when mortgage loans were not readity available, sounds familiar. The lack of mortgage funds meant that hundreds of thousands of would be homeowners were kept ouside of the market. Then in 1970 Freddie Mac was created, in effect to provide mortgage loan lending competition to Fannie Mae. Little did they know that the competion would be who could loose the most.

The present mortgage market decline has in effect again reduced the availability of mortgage loans to a large section of potential home buyers (you and me). With its intervention, by increasing the mortgage loan lenders' access to credit, the US government hopes confidence in the market will be restored, with an associated knock on effects of increasing the availability of mortgage loans funds boosting home sales and providing a halt to falling prices (which is more believable, no black hole or a miraculous recovery?). The levels of pending US home sales are now 6.8% lower than at the same time last year, saythe National Association of Realtors.

Without intervention there would have been a very strong possibility that both loan lenders would have collapsed. The consequence would have been a frozen US mortgage market (we could ship it to the polar ice cap, where it would do some good - you don't see many penguins with morgages do you?), which would have taken years to recover. impacting any possible recovery in house prices, which are reportedly falling at more than 15% a year in major urban areas. So for now, Freddie Mac and Fannie Mae are safe, it remains to be seen whether the influx of funds will help the housing market overall and whether that big red French ON switch will really be a big red OFF switch.........