well, it was bound to happen. the government basically nationalized both fannie and freddie, taking an 80% equity position, so the original shareholders now own only 20%. watch those shares go off a cliff tomorrow. is it any wonder the sec won't allow the shorting of fnm and fre?

i can't imagine anyone being surprised at this outcome, as it had to happen. the two gse's have to roll over $50 billion in commercial paper each month for the next six months, and who is going to lend them money without a guarantee?

between them they guarantee nearly $6 trillion of mortgages, so there was no way they could be allowed to fail. sovereign wealth funds abroad would have been hurt badly (and their governments enraged) as well as our own banks, which can ill afford any further losses.

it all adds up to more monetization of debt, as there is no way the government could possibly raise taxes to pay for this, and every other bailout heading our way. but they can't print silver, and they can't print gold.

http://online.wsj.com/article/SB1220...