subprime and support by governments

As this saga unfolds, there will be a stage where Govts could move in, including quasi substitutes, eg the FED.

Germany appears to have already acted:
http://www.msnbc.msn.com/id/20079844/

I think that others are still busy collating the damage as far as this is known and could move once it is clear that damage control is more important than waiting too long.

The more obvious questions will be directed at the FED and US treasury. These may not be too concerned at bailing out private subprime holders but would be more interested in shoring up a Bank or two.

The situation is quite perverse in the US because of their ARM mortgages. These are Adjustable Rate Mortgages which will be reset at much higher rates shortly and again much later. These killers will ensure that the prime rate problems will last for quite some time.

The State Govts may also want to have a look at this with reference to the private holder. The whole situation is murky as the FED won't want to drop interest rates but they may have too.

The US market is waiting for any action and in the meantime the PPT is flat out shoring up the DOW.

Any positive FED action could be beneficial for the share market and no doubt the FED and Treasury will be well aware of that.

Waiting for action.....

Gerry
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