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.
"It is rather for us to be here dedicated to the great task remaining before us — that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion — that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth.” Abraham Lincoln, November 19, 1863