There was a story circulating that this bailout wasn't the preferred Fed/Treasury plan at all - that it was pushed on them by the central banks and SWF who hold so much of the Treasury and GSE paper. Basically, it was either make them whole on their holdings, or be forced overnight into a balanced budget situation by not buying anymore $-denominated government or agency debt.
It's an interesting story. Running deficits is like trading on heavy margin - it works until it doesn't - and then you're dead.
I guess Monday morning will have Fannie go to zero and the rest of the financials do a minor moon shot. How long any of it holds is beyond the capabilities of my crystal ball.
OT - Remind me again - what is the substantive difference between the two major parties running candidates for the presidency? BTW - I'm going to call it right here, right now - Obama will pull a Kerry and hand the GOP another term.
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