Treasury promises to buy Fannie and Freddie equity

I talked about the possibility of a reflation attempt in the near future, and we just might see it. Despite the 250bp rate cuts and "innovative" credit facilities by the Fed, we have yet to see a full blown monetization effort by the government. Fannie and Freddie own over $5 trillion of US mortgages, and the government will do anything to maintain market confidence; this is just the beginning of the end. Bear Stearns is nothing compared to the current problem, because the potential systemic risk goes beyond the financial markets; the full faith and credit of the US government is on the line. At times like these, I'm amazed at how schizophrenic the market can be. Just last month, Bernanke was mouthing that downside risk had diminished, and that he was considering rate hikes to support a strong dollar. HA! Indeed this whole situation is very sad, and a lot of people's lives are going to be ruined because of it. But seriously, Wall St and Main St should have seen this coming.