The Money Powers that own the US Government have shown they're committed to the Public Bailout of any Institution to which they're directly or indirectly invested. Although FreddyMac ain't worth squat, they hold massive amounts of junk CDO's (TRILLIONS), which, if hit the market in a receivership firesale, would deep six the already-teetering Financial/Investment Banking Sector. This was a 100% WallStreet Bailout. Make no mistake. Just because Goldman or BoA doesn't hold a major stake in Fanny or Fred, doesn't mean they wouldn't be affected by their blowup. On the contrary, most of Wallstreet's Brand Names would be pushed over the cliff in the ensuing liquidation. This bailout is another telling indicator that US CDO-holders will not be allowed to go under. Bernacke took junk paper from Banks and IB's at 100% face value convertible to US Treasuries. Rates slashed with inflation running hot. Treasury cut checks to faltering home owners. Endless money pumped into a failing system. Another reason medium-to-large publicly traded Financials cannot be allowed to go under - Credit Default Swap (CDS) exposure. Credit Default Swaps are basically insurance on Corporate Debt. Unfortunately, CDS became a speculative (read: highly leveraged) market unto themselves with no regulation on outstanding insured debt to REAL outstanding debt. What took place - outstanding insured Corporate debt is roughly 10 TIMES the actual outstanding debt, for any one Corporation. Fanny and Fred had over 1 Trillion in Corporate Debt between them. That means over 10 TRILLION in CDS insurance must be paid out from CDS Insurers to CDS buyers if FannieMac goes bankrupt and defaults on their long-term Corporate Debt. A lot of those CDS buyers are speculators. A lot of the CDS insurers are large cap institutions. That means a lot of LARGE CAP Corporations and funds - already struggling to stay afloat with their junk CDO's - would be on the hook for TRILLIONS in CDS insurance if a Bear or Fannie was allowed to go under. What happens then? Cascading dominoes: One goes down. Then 5. Then 25. Then a Depression with a horrendous market crash. What this means to us traders? It means Freddy May will never see 0$ per share. It will either be absorbed into a yet-to-be-created Government or Private entity (a la Bear Sterns absorbed by Morgan) to prevent CDS Trigger or will be infused with enough Tax Payer money to make it a viable Institution. That means 50 Cents a share is probably a good bet. It will never be allowed to hit zero folks. Its a buy. Now that we're talking about it, write (sell) CDS insurance on any big name financial company - be it a Citi, BoA, Wachovia, don't matter. Paulson will never let them fail = CDS payout will never get triggered = free money on the premium. Merry Christmas.