More credit shocks in the offing
After announcing full government backing for Freddie Mac and Fannie Mae , the US government has only postponed the problem. They also did not have any other better option than backing these mammoth organizations in the US interest, since many of the other central banks across the globe have invested in them in huge sums. Thus, any pull back from any of them will lead to unpleasant crash in liquidity taking it to unmanageable levels. Also with the actual credit quality of the assets of these institutions expected to be poor, the coming months should be showing out more skeletons than what we wish.