If we let Fannie and Freddie fail, we are all up the creek without a paddle. Think money markets. U'd be hard pressed to find one that does not hold Fannie and Freddie's paper. IMO this is the scariest thing yet.
If THEY fail, it is over. I AM 100 PERCENT SERIOUS.
Also with reference to your VMC Motherboard post on FRE/FNM bailout, I would like to bring to the attention, another strategy that may have lost in translation; and that is shorting the Treasury bonds.