What will you do with your Fannie Mae and Freddy Mac stock?

Exciting news for 300 million Americans. Soon your investment portfolio will include Fannie Mae and Freddy Mac stock:

U.S. Weighs Takeover of Two Mortgage Giants

WASHINGTON — Alarmed by the growing financial stress at the nation’s two largest mortgage finance companies, senior Bush administration officials are considering a plan to have the government take over one or both of the companies and place them in a conservatorship if their problems worsen, people briefed about the plan said on Thursday.

The companies, Fannie Mae and Freddie Mac, have been hit hard by the mortgage foreclosure crisis. Their shares are plummeting and their borrowing costs are rising as investors worry that the companies will suffer losses far larger than the $11 billion they have already lost in recent months. Now, as housing prices decline further and foreclosures grow, the markets are worried that Fannie and Freddie themselves may default on their debt.

Under a conservatorship, the shares of Fannie and Freddie would be worth little or nothing, and any losses on mortgages they own or guarantee — which could be staggering — would be paid by taxpayers.

What will you do with your shares? Sure, they’re worthless and pretend, but at very least you can have the pride of ownership. And what’s $11 billion, anyway? Aside from 20 percent of a plan that would give all Americans health care?

But that’s a bad comparison. After all, when the government gives individuals something for their tax money, it’s socialist. Like Denmark. When the government gives money individuals’ tax money to big businesses that have run themselves into the ground, why, that’s good ol’ American-style capitalism.

–WKW

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