According to Bloomberg, the Fed just came out (after the close of trading of course) and denied that they had talks with Fannie and Freddie regarding opening the discount window for their use.
Reuters had a story in the afternoon to that effect, which sparked a sharp short-covering rally in Fannie and Freddie.
Personally we thought that they already had access to the Discount Window, considering who is bellying up to that bar already. If investment banks and Countrywide Financial, why not mortgage lenders?
But it just goes to show how these markets are. Today was some vicious trading, strictly a double black diamond slope. We loved it, but its really not a fruitful activity for the real economy.
"All the world marveled at this, and gave their allegiance to the Beast. And they worshiped the serpent, for giving such power to him, as they also worshiped the Beast. 'Who is as great as the Beast?' they exclaimed. 'And who is able to resist him?' And the Beast was allowed to commit great blasphemies against God."
Revelation 13:3-5