"The doomsday scenario could cost taxpayers more than $1 trillion, says the S&P report. The report went so far as to say that a government bailout of Fannie or Freddie could force the agency to lower its rating on the creditworthiness of the United States." http://money.cnn.com/2008/07/09/new...ddie.fortune/index.htm?postversion=2008070914
I would dare say Fannie and Freddie are insolvent as of right now. Forget write downs, I'm willing to bet revenue next quarter collapses, and they burn up all their free cash to pay the interest on trillions of debt. They can't sell shit because all there assetes are no bid level 3.