Lately there’s been a lot of discussion about a potential new financial recession being at our doors. All the signs are already present, from the stock market being shaky and the US economy being sluggish, the European banks on a downtrend, the China and US trade war continuing to linger and the Federal Reserve cutting interest rates for the first time since the last financial crisis, then doing it again two-months later to the Repo markets interest rate spike.
Just a few weeks ago, the US Department of the Treasury announced the “Housing Reform Plan” in which they want to place the government-sponsored Fannie Mae and Freddie Mac back into private hands. Fannie and Freddie, the two largest mortgage guarantee businesses and government sponsored enterprises (GSEs), were taken over during the 2008 housing crisis and have been government run ever since. All these events add up negatively as the impending recession is getting closer.
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