run American corporations, gorging on debt and lavishing their senior executives with pay and perks. They were given the advantages of a government-backed entity - such as lower borrowing rates and generous tax exemptions - and yet behaved like the most piratical free-marketeers.

Their palatial headquarters in Washington DC became the hub for the entire housing and mortgage industry's successful efforts to limit regulation and provide tax breaks for home-owners.

Instead of helping poorer families onto the first rung of the property ladder, as they were originally intended to do, they have acted like steroids on the property market, insuring billions of dollars in mortgages which in any rational market would never have been written, and driving up property prices beyond their natural level.

Between them they have annual revenues of more than $80bn and own or guarantee nearly half of America's $12 trillion mortgage market. And thanks to some insane financial management in recent years, the two companies are little more than giant piles

of debt, teetering on mere slivers of capital.

Even a slight rise in late payments, defaults and foreclosures by mortgage holders would have threatened them. Instead, they have been hit by the worst housing market fall since the 1930s.

Rather than helping homeowners through the crisis, they now have to be bailed out by the taxpayer. Shares in the two companies have fallen 90 per cent in less than a year and anyone trying to get a mortgage these days is finding it fiendishly hard. Their woes have negated the effect of the Federal Reserve's series of rate cuts earlier this year, which were intended to stimulate the market.

In 2004, the former Fed Chairman, Alan Greenspan, warned that Freddie and Fannie's expansion was threatening the financial markets. Neither Congress nor the federal government's housing overseers did anything to stop them. Instead, the taxpayer is yet again there with the bucket, bailing out another private sector implosion. How many more there will be, no one knows.