The biggest threat to America’s financial stability may be a housing market meltdown, according to a new report.
The report by The Wall Street Journal and Capital Economics estimates that the country is facing an unprecedented financial meltdown in the next 10 years if we don’t do something about it.
That is because of the government bailout of mortgage giants Fannie Mae and Freddie Mac in 2008.
The government bailed out these big banks by giving them a huge government guarantee of their mortgage portfolios, but the banks have been unable to repay those loans due to the recession.
The banks are now facing the prospect of having to write down assets or stop making payments on mortgages.
Capital Economics’ report, “The Great Financial Collapse: The U