The FTSE 100 roared back  on Monday's opening as traders in the City responded to the US government's announcement to bailout mortgage companies Freddie Mac and Fannie Mae.

In the opening minutes the FTSE 100 index roared back 200 points and then froze at 9AM at 5440.2 for the next seven hours frustrating angry traders who were unable to trade for most of the day.

Trading finally resumed allowing just 30 minutes of trading before the close of the session and despite the seven hour meltdown the index closed up 205.6 points on the shortened day.

No official explanation has been given for the crash which is the worst since  the system failure in April of 2000. The biggest gainers were the UK banks many of which were foolish enough to have underwritten loans in the US  sub-prime debacle. Halifax building society shares soared12.5 percent, Lloyds TSB rose 11.2 percent and  Royal Bank of Scotland was up 11 percent.

The plan to bailout the  mortgage two giants was announced on Sunday by US treasury Secretary Henry Paulson and has three key strands:

• The US government will inject $100 billion into both companies to allow them to honor their existing debts and keep trading

• It will buy mortgage bonds issued by the pair, starting with a $5 billion deal

• There will be an unlimited "backstop liquidity support facility" - essentially giving Fannie and Freddie whatever credit they need to remain afloat.

So there you have it. The US tax payer has to underwrite the e idiocy of two private companies to avoid the continued meltdown in the housing markets.

While there is little argument that this bailout had to be done as there was little alternative, in order to prevent the complete meltdown into  a 1929 type of depression, there have to be some changes made at the top to stop this abuse of power. Whichever Senator takes over as President in January, be it the former decorated war hero and maverick John McCain, or charismatic new kid on the block Barack Obama there is going to be a pretty big 'to-do list' to attend to.

Shares in Fannie fell by 82 percent when trading began on Wall Street, with Freddie losing 80 percent. Both had already lost over 90% of their value in the last year.