Financial meltdown

Fannie Mae's shares have fallen 87% since October, losing $63bn in value.

If Fannie Mae and Freddie Mac fail completely and the US Treasury has to rescue them, it is feared that the pair's liabilities would double the US Treasury's outstanding debt load and maybe raise concerns about the AAA sovereign rating of the US itself.

Meanwhile, Lehman Brothers shares fell 22% following the company reporting that the bank still has $41bn of mortgage debt and other "toxic" Level III assets.

I don't think that "meltdown" is too strong a word to describe what is happening in the US and don't think that it won't come to the UK as well. There are several UK banks getting very close to the end-game.