Much pain has been experienced in the American and world economy due to the collapse of sub-prime mortgages. This slow motion car wreck has resulted in:
- massive commercial and investment bank write-downs,
- the beginning of a series of bank closings,
- destabilized the two largest mortgage guarantors, Fannie Mae and Freddie Mac, resulting in an explicit Federal guarantee for them
- the recent federal stimulus package that has temporarily kept the economy from recession by borrowing over $100 billion from the Chinese and other holders of US Treasuries.