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.

Remember, Wall Street the home of 'free market capitalism' usually rallies when socialism shows up in the form of your tax dollars. Because we socialize losses onto the taxpayers back and give the benefits to the elite few. Why wouldn't we rally off of that if we were Wall Streeters? Showcasing once more it's not safe to maintain any position in this market since in none of my models can I put "government intervention" in and get a quantitative stock price target.

In case you missed it, Bill Gross from PIMCO which is the king of bond investing, has a plantive call for bailouts... err assistance... in this month's letter.

Mish's take on our "Bailout Nation" mentality.

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.

I wonder if this is all connected to this new era of child rearing where everyone gets a medal, there is no second place and no one is allowed to go home a loser? Could it be that has already pervaded up to the upper reaches of society? I thought it would take a generation or so.

Don't forget, its' Friday night and that means the FDIC has a better than 50% chance of closing a bank down ;)

As I say: historic times.