With Fannie and Freddie, the US Is Bailout Nation

Fearing turmoil in housing and the stock market, the government seizes mortgage lenders Fannie and Freddie. What it means for you — and the U.S.

Illustration by C.J. Burton for TIME

In what is getting to be something of a habit, Treasury Secretary Hank Paulson ruined his own and a lot of other people's weekend by choosing the morning of Sunday, Sept. 7, to announce the seizure of money-losing mortgage giants Fannie Mae and Freddie Mac.

Fannie and Freddie are--childish names and all--by far the biggest financial institutions ever taken over by the U.S. government. Their bailout amounts to a stunning return to government control over the U.S. financial system, incongruously led by a former Wall Street boss (Paulson) working in what is purportedly a conservative Republican Administration.

It's also yet another...

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