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With its unprecedented takeover of Fannie Mae and Freddie Mac this week, the U.S. government may have also bailed out Asia’s markets by staunching a heavy flow of equity capital out of the region.

This is significant. Fund managers had been moving money out of the region and Asia Inc had been slowing down its overseas borrowings in what amounted to early signs of the first capital outflow since the Asian financial crisis a decade ago.

Now, in one fell swoop, Washington has taken over half of all U.S. mortgages, so removing one of the big question marks in investors’ minds that for the last six months had made them flee Asia’s high growth, yet high risk, stock markets.

Of course, the financial crisis is not over as a slump in Lehman Brothers’ shares has shown.

But Fannie and Freddie hold outstanding debt of $5 trillion, of which about 20 to 22 percent is held by countries like Japan, China, Russia, and South Korea electronic check payday advance. So having the risk on that debt effectively cut to zero greatly eliminates the chance of a wave of global losses on the companies’ bonds.

“This is a watershed in the market because it reduces risk aversion. Risk has been transferred from the private to the public sector,” said Dariusz Kowalczyk, chief investment strategist with CFC Seymour Ltd in Hong Kong.

Since mid May, the MSCI Asia-Pacific ex-Japan stocks index .MIAPJ0000PUS has fallen 26 percent to its lowest level in almost two years.

The money can start to flow back in to Asia, Kowalczyk says. He expects an upward trend for the rest of the year as fund managers reduce the cash element of their portfolios and fill up on equities. 

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