With the price of a barrel of oil exceeding $146 and stock markets reeling, the global economic turmoil has worsened this week. Yet most remarkable of all has been the sight of socialist turkeys coming home to roost in the US, home of free-market capitalism. These sorry birds, colloquially known as Fannie Mae and Freddie Mac, are “government-sponsored enterprises”. What exactly that means we may soon discover.

With combined liabilities of $5,300bn, about 38 per cent of US gross domestic product, these massive fowls are universally deemed too big to fail. Since they account for nearly three-quarters of new mortgages, they are too important to do so. If they ceased to lend, the housing market might collapse, so devastating US financial stability.