I am a 75 year old low income widow. I invested about 40 percent of my savings in a Fannie Mae upon advice of my stock broker as a safe place. It seems unfair that final action on this would take place on a weekend when markets are closed making it impossible for me to do anything to rescue my savings. I'm sure I'm not alone. Not all share holders are wealthy wheeler-dealers, in fact I'd bet most aren't. We seniors tend to seek risk free investments annd like me many rely on the advice of brokers or other financial advisers. Have I lost it all?

Sent by Shirley Shepard | 12:20 PM ET | 09-07-2008

My questions about this crisis amount to who is profiting or has profited from the housing market, and that may stand to lose without the taxpayer bailout. I did not have any stock with Fannie or Freddie, I have a sound mortgage I am paying on time, and I have had no say in this bailout, nor have any of our official representatives, yet I will pay for the privilege of a few who made a killing in the bubble now bursting. Please someone explain why it matters to me that any business that has made poor choices and is now failing should be bailed out by a government whose last eight years have professed deregulation and LESS interference in business. Someone took billions out of the market and will get away scot free, and it will now be the taxpayers who have paid these manipulators of the system their billions. Ingenious, to say the least, fraud and embezzlement of the American people, to say the most.

Sent by Steve Williams | 12:34 PM ET | 09-07-2008

What does this mean, if anything to someone that has a FHA home loan pending or in underwriting?

Sent by Jack | 12:41 PM ET | 09-07-2008

What financial penalties are these top executives who managed Fannie and Freddie into oblivion going to face? Are they going to have to give back any of the generous bonuses they have collected over the previous years or forfeit any of their retirement or severance pay?

Sent by David Wiley | 3:23 PM ET | 09-07-2008

...regulators were "prepared to work with these institutions to develop capital-restoration plans."

This sounds a lot like the government is going to at least partially bail in investors in Fannie/Freddie stock, or worse, they are planning on bailing out just a few investors in Fannie/Freddie stock. When do we get the details of these "capital-restoration plans".

Sent by David Wiley | 3:33 PM ET | 09-07-2008

First a comment to investors out there. Never, never, NEVER invest more than 10% of your money into a single stock, no matter how safe you may think it is and no matter how safe someone tells you it is. Anyone who advises you to invest more than 10% of your net worth into a single stock is the financial equivilant of a quack.
To anyone who thinks Fannie and Freddie should be left to die like any company that makes stupid decisions, understand that letting this happen would plunge the USA (and the rest of the world too) into another 10+ year long depression. Very few alive today know what that means. Please read a detailed history of how people lived and died between 1929 and 1940. The story of the Hoover dam camps is a good place to start.
I'm unhappy with how the government is doing this. They should pay investors who are US citizens fair market value for their Fannie/Freddie stock as part of this deal. To simply declare the stock as worthless and say "sorry" is totally unacceptable. Doing this to foreign investors is a bad idea too, but lower priority than US investors IMO. By effectively "stealing" these companies from investors, foreign and domestic investors will have less confidence in the integrity of the stock market for a time. I expect to see dollars fleeing the market next week and the DOW going below 11,000 because of this.
The bailout was necessary, but is being handled poorly. An ugly situation is uglier now.

Sent by Lynwood Hines | 3:40 PM ET | 09-07-2008

I think that both of these institutions contributed to the over valuation of US real estate by enabling the fraudulent valuations put forth by the real estate brokers and their cohorts. They should fail and prosecutions of their current and former executives should start. The real estate brokers need to be tightly regulated by the states with heavy penalties both cash and prison stays commesurate with the fraud they supported.

Sent by joe | 4:08 PM ET | 09-07-2008

SIX TRILLION dollars. Number one: this "amount" of money does not exist. It actually can not exist, because even if a person "could" convert bio-mass into a "dollar bill" -- you know, that "tangible" fiat paper money that is used to value things like, uh, water and food? -- then there are no places to collect or store such a VOLUME.

The zany idea that the Federal Reserve Bank -- an arbitrary (and NON-Governmental) organization created by supposedly wealthy individuals to "finance" capitalism -- can represent the U.S. Government in accessioning Fannie Mae and Freddie Mac is ludicrous.

This is -- essentially -- tyranny. Living without a choice.

Sadly. But with irony: we humans have never -- read: NEVER -- really "needed" anything other than: food, water, shelter, clothing and fire.

What we are calling civilization is appearing more and more to be a "dumbing down."

Pray not.

Sent by Doesn't Matter | 5:24 PM ET | 09-07-2008

We could debate the purpose of civilization ad nauseum, but I will simply offer my opinion that if civilization has a purpose, beyond the self organizing emergent behavior of memes intent on reproduction, it would simply be to improve our quality of life. Arguably, civilization's arteries are pretty clogged up at this point.

Try living with minimal food, water, shelter, clothing and fire. You won't like it.

Sent by Lynwood Hines | 6:13 PM ET | 09-07-2008

It will be interesting to see what Fannie and Freddie common stock do on Monday.

According to this article, Fannie and Freddie stock remains untouched by conservatorship, and will trade as they always have. This comes directly from Treasury, so I'm quite confident the stocks will trade as normal:

http://www.ehow.com/how_4503604_mac-fre-stock-during-conservatorship.html

How to Trade Fannie Mae (FNM) and Freddie Mac (FRE) Stock During Conservatorship

Whether they trade higher or lower remains to be seen!

Sent by david | 6:19 PM ET | 09-07-2008

I have heard that the Chinese government has invested nearly $400 billion in Fannie and Freddie. Why should be bail out the Chinese government for their bad investment?

Sent by Sean | 7:05 PM ET | 09-07-2008

because if us government did not back the debt, the US would lose more.

Sent by Hanwen | 7:50 PM ET | 09-07-2008

> Why should be bail out the Chinese government for their bad investment?

In part because they are the single biggest holders of our nation's T-bills. They could destroy the value of our currency if they wanted. Granted such action is unlikely--in doing so they would be pulling the wool over their own eyes and harming the buying power of they biggest export partner.

No, I think you'd have to say that the China thing is not really a relevant decision. There were many "bad investors" other than the Chinese government.

Note also that an investor really only becomes bad when he or she loses money. Most informed investors who sunk money into F&F assumed that their stock was guaranteed by the US Gov--that the gov would bail out F&F if the going got rough. And that indeed is what is happening.

Aside from specific stocks and a fund or two, I stopped investing in America more than five years ago. My Asian and Latin American investments have dipped slightly less than a lot of my friends' American investments and when the US market bottoms out (or when I think it does), I'll certainly be moving some of my money back in that direction.

As long as one has a reasonably balanced portfolio, the F&F troubles really shouldn't be a problem. The downturn simply presents new opportunities.

Sent by Justin | 7:54 PM ET | 09-07-2008

Just to be clear, the US Gov (tax payers) is going to buy stocks in Fannie and Freddie to keep them solvent so they ( Fannie and Freddie ) can loan us ( tax payers ) our own money back with interest...or am I somehow seeing this wrong...

Sent by aaron | 8:06 PM ET | 09-07-2008

I'm only 28 years old, and I can't get over the fact that the people behind running these businesses are, in some ways, getting the "bail out" for pushing risk so far beyond reason, that they need a blank check from our government in order for the companies to survive?

What kind of a message do they expect us to get from this?

Spend it all, borrow three times as much, take on more mortgages, and if you think you've broken your company... aw, well just hand-er over to Uncle Sam, and we'll take the depression outta yer recession!"

?

I need a country that's willing to hand out real consequences for thoughtless actions, instead of a pack of band-aids.

I'm not thinking God's interested in blessing America much longer.

Sent by Tom Marsh | 2:58 AM ET | 09-08-2008

Viewed from afar (Australia) the comparisons between finance industry regulations here and in the US are stark. Our five major banks are underwritten by the Fed (Reserve Bank of Australia) and reporting, compliance, share market requirements and company law are far stricter. The effect that the seemingly un-regulated, free-wheeling, profit-driven FanMac affair has had and is having, not only to US homeowners but also here in Australia and throughout Europe should be cause for reflection by law-makers, financial regulators, customers and the media alike. US citizens and free market economies through-out the world must demand financial law reform in the US. Aussie families are losing their homes as we also suffer from exposure to the credit crisis caused by low-doc loans written by FanMac and co.

Sent by Brett | 5:59 AM ET | 09-08-2008

How exactly will the bailout be passed on to taxpayers?

Sent by D Allen | 11:04 AM ET | 09-08-2008

The whole "system" is corrupt. Overhaul is unlikely, if even possible, and so the sooner the house of cards known as the US/global economy is allowed to collapse, the sooner people might sober-up and start over. The only thing that will likely effect real change is to let F & F go and suffer the consequences.

Real estate prices were/are way too high (or compensations are way too out of balance) as evidenced by mortgage defaults in enough numbers to destroy the US/global economy. When all parties involved (banks, real estate industry, government regulators and beguiled home-buyers and investors) collude to inflate prices, the only check on this greed and stupidity lies in the overall economy and the only outcome is breakdown.

Lets not hear any more about capitalism vs socialism: where is the conservative's outrage now?

Sent by Johngoal | 11:53 AM ET | 09-08-2008

Since I (taxpayer) have to pay for another fix (already paid for the S&L debacle, along with my parents), I offer 3 things that would make it slightly more palatable:

1. For those of us that already manage our mortgages - give us a tax credit for how ever many dollars for how ever many years it takes to float the however many billions. Basically don't tax the payments we make on our homes.

2. For those of us that do not have their first homes, but do have good jobs with steady incomes - they need availability. Financing is so tight right now; even the good customers that can pay can't get in the door. This trend will only deepen the problem.

3. Property Values, all local governments like higher property values, pretty obvious. It is time to get real about values, trust me; I can't get 50% of what my home value (last reassessment in 2006). Local governments should be required to annually adjust property values until the mortgage crisis has flattened back out. This would help everyone.

This has not been a "surprise"; I have heard discussions about this looming "crash" for the last 3 years, from builders, lenders, developers, etc. It would be really hard to figure that the industry somehow missed the warning signs.

Fan / Mac Investors are partners, they are "Investing" - sort of like us taxpayers, welcome aboard.

I don't understand a lot about the financial complexities of businesses. I do know that if I do a really good job, I get recoginition and compensation. Like the person before me, I would get fired for doing a really bad job. If I did a really good job, so good that it plunged the company into insolvency, I would get hung - along with my manager.

Sent by Fred | 12:29 PM ET | 09-08-2008

Hovv come the Government let these tvvo CEO have so much money VVhen they Have Bankrupcies on their "Hands" ? ? ?

Sent by Florent L"Esperance | 2:24 PM ET | 09-08-2008

Why the goverment can nationalize a company that has not collapsed? Why not to nationalize ExxonMobil because the gasoline prices are too high? Are we in a national socialist regime? I thought the goverment could not steal from rightfull owner (shareholders) of the company. I don't think this is more legal than taking over Exxon Mobil. Is the rule of law, the back bone of our of the legal system in which private property can be taken away at will, gone in the US? What can we do about this. The precedent is scarry. Hugo Chavez can give us a few lesson in nationalization. Can we do anything?

Sent by Maria Schneider | 2:27 PM ET | 09-08-2008