Shares of Fannie Mae and Freddie Mac, the beleaguered mortgage finance companies, plummeted again on Friday as the Bush administration sought to allay market fears.If things are so bad that our leaders in Washington are willing to consider dismantling what's left of our free market economy, why not just nationalize all industry now and be done with it?
Following a report that the administration was considering a plan to take over one or both of the companies and place them in a conservatorship if their problems grow, Fannie Mae stock was down 25 percent in midday trading compared with Thursday's closing price; Freddie Mac stock was down 21 percent.
Investors, meanwhile, snapped up debt issued by those companies, and the insurance premiums on those securities dropped sharply on the view that they would be protected by a government takeover.
President Bush, after meeting with his team of economic advisers Friday morning, said he was briefed on the situation by Treasury Secretary Henry M. Paulson Jr.
"He assured me that he and Ben Bernanke will be working this issue very hard," Mr. Bush told reporters after the meeting.