http://www.marketwatch.com/news/story/fitch-affirms-fannie-mae-/story.aspx?guid={B13017B7-ABC9-4B6D-A550-B200451AC98A}
Note that the rating agencies are affirming the debt status but the preferreds and the shareholders are getting skewered. I will say this. One thing to note is that many large financial institutions have Fannie and Freddie debt and the Treasury is most concerned with making these investors whole. So, the debt will be backed by the full faith and credit of the US government. The investors include PIMCO, the largest bond house and Sovereign Wealth funds and foreign central banks like the Bank of China.
In addition, several regional banks are absolutely stuffed to the gills with preferred stock in the companies. This preferred stock has been downgraded to junk status and may be worthless. Gateway Financial and Midwest Banc and Sovereign Bancorp are three that come to mind. JP Morgan has come out and said they have $600million of Fannie and Freddie preferreds so expect some major writedowns.
http://www.creditwritedowns.com/2008/09/gateway-financial-and-midwest-banc-have.htmlI wrote a fairly good synopsis on my blog about the details behind the conservatorship and have a bunch of links to good news sources from Bloomberg and others.
http://www.creditwritedowns.com/2008/09/freddie-and-fannie-taken-over-by-us.htmlSome other external sources that I saw that I think are good are:
1. Bloomberg (good overview and Paulson statement):
http://www.bloomberg.com/apps/news?pid=20601087&sid=auCiw0BP4Fyk&refer=homehttp://www.bloomberg.com/apps/news?pid=20601087&sid=aDipiKDdhfSI&refer=home2. NY Times (good synopsis of what's wrong with this bailout)
http://www.nytimes.com/2008/09/08/business/08scorecard.html3. Reuters (an article from a few weeks back about the preferred stock
http://www.reuters.com/article/businessNews/idUSN0737455320080907Let's see what the markets think of all this. Asia was up 4% overnight.
Edward