And Paulson is being clear as mud.Mounting doubts over the ability of the companies led Deutsche Bank analyst Mustafa Chowdhury, a former Freddie Mac executive, on a Wednesday conference call to float the possibility that share prices could go below $5.
For the debt, much depends on the continued support of foreign central banks that have been loading up on the companies' $1.6 trillion in outstanding debt, a Deutsche Bank trader said on the call.
"If you are going to bail out Bear Stearns, the Congress is going to support Fannie and Freddie," said Andrew Brenner, co-head of structured products at MF Global in New York.
Yields on 10-year bonds issued by Fannie Mae and Freddie Mac ballooned 10 basis points to more than 1 percentage point above government debt. They had been quoted as much as 12 basis points wider than late Wednesday.
And the market is crashing.