http://news.yahoo.com/s/ap/20080711/ap_on_an/mortgage_crisis_analysis There's a range of things the government can do short of a takeover. It could lend money to the two companies, it could buy their stock, it could make the implied government guarantee an explicit one with a big line of credit. These are the kinds of things, presumably, Paulson and Bernanke will be exploring in the coming days in "working this issue very hard," as Bush said.
Fannie Mae was about $60 a share: http://finance.yahoo.com/q/ta?s=FNM&t=2y&l=on&z=m&q=l&p=&a=&c= It has 975.41 M shares outstanding: http://finance.yahoo.com/q/ks?s=FNM So it had a market cap of: $58.52 billion. Now Freddie Mac: Also about $60 per share: http://finance.yahoo.com/q/ta?s=FRE&t=2y&l=on&z=m&q=l&p=&a=&c= 646.72 M shares outstanding: http://finance.yahoo.com/q/ks?s=FRE So it had a market cap of: $38.8 Billion. So, a total loss of $97.32 billion would melt the US financial system? Sure it's a shock, but not a colapse. True, Freddy and Fanny hold or insure $5 trillion of mortgages, but every cent is backed by the gov't.
that's what America needs is more frickin credit... banks count borrowed cash as reserves. gee I wish the casino would extend to me such terms