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.
"Where such a shift in power is in favor of the governing elite, Power will achieve its murderous potential. It simply waits for an excuse, an event of some sort, an assassination, a massacre in a neighboring country, an attempted coup, a famine, or a natural disaster, to justify the beginning of murder en masse. Most state sponsored murder occurs under the cover of war, revolution, or guerrilla war, or in their aftermath."
R. J. Rummel