Today, the Bush administration announced that the government will step in and take over control of Mortgage giants Freddie Mac and Fannie Mae. Of the $12 trillion dollar housing deficit, the two companies own or guarentee almost half of it. Shares of the two companies have dropped about 90% in the past year. As of the end of June, 9% of homeowners in the US were either behind on their payments or in forclosure. Both presidental nominees agreed that something need to be done and backed the decision for the government to step in. However I will be up to the winner to decide what to do with the companies in a few months when they take office.

CNBC has reported that Berkshire Hathaway’s quarterly earnings are down from a year ago. The company, owned by Warren Buffet, reported net earnings for the second quarter of this year that are down 7.6%
for the numbers of the second quarter of 2007. Buffet was quoted as saying “As long as you’re a net buyer of stocks, which we are at Berkshire, we want them to be cheaper. I mean, if they reduce the price of hamburgers at McDonald’s today, I feel terrific. Now I don’t go back and think, gee, I paid a little more yesterday. I think I’m going to be buying them cheaper today. Anything you’re going to be buying in the future, you want to have get cheaper.”

Jim Cramer, on his Mad Money TV show on CNBC announced that he thinks the stock market has hit the bottom and will not return to the lows seen on July 15.  Cramer said that investors should buy on the next big dip as he thinks a huge upside is near.  One of the reasons for him saying this is that negativity is so high that the market might have reached a point of total capitulation.  Another main cause to the fact that the market may be headed for better days is the recent bill that President Bush signed that will allow banks to sell bad mortgages for $0.80 on the dollar to the Federal Housing Authority.  As Cramer put it, “Bye, bye bear market.”