WSJ: Treasury is Close to Bailout Plan err Backstop for Fannie (FNM), Freddie (FRE)

Not that they need it because their business model is just fine thank you - but your tax dollars are on the way... this administration is infamous for doing their best bailout... err assistance ... plans on the weekend. I wonder if this was leaked to Goldman Sachs... err to someone, and that caused the reversal today.

• The Treasury Department is close to finalizing a plan to help shore up mortgage giants Fannie Mae and Freddie Mac, according to people familiar with the matter.
• Precise details of Treasury's plan couldn't be learned. The plan is expected to involve a creative use of Treasury's new authority to make a capital injection into the beleaguered giants. The plan includes changes to senior management at both companies, according to a person familiar with the plans.
• On Friday, a series of high-level meetings were planned between Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, the chief executives of Fannie Mae and Freddie Mac and the companies' new regulator, the Federal Housing Finance Agency.

It is preposterous to propose the government should bail out private investors. It has been tried many times and it has failed every time. The Greenspan Fed frequently bailed out banks and investors. We are now bearing the fruit of past misguided bailouts. The housing bubble we are in is a direct result of the Fed attempting to bail out banks in the wake of the dotcom bubble. The dotcom bubble was fueled by an imaginary threat called Y2K as well as a previous bailout of Long Term Capital Management. Banks do stupid things when they are constantly being bailed out of their mistakes.