Although it seems unfathomable, it is quite possible that Fannie Mae and Freddie Mac will cease to exist in their current form.  The equity market is telling us that these guys are going away.  The debt market is telling us that Fannie and Freddie’s business model is broken.  Corporate spreads are widening for them and if they can’t obtain financing at a reasonable rate then they are useless.  Amazingly, the market is starting to come to this realization and is accepting this fact as today’s action indicates.  Freddie and Fannie both lost about 25% today yet the broad market was able to shake that off and produce some gains.  Even the financials were able to eek out some gains.