Rick Newman submits: John McCain and Barack Obama have been choosing their words carefully when it comes to the foundering mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE). No doubt they're starting to realize that whoever gets elected in November is likely to get saddled with this massive problem on Day 1. In July, when Treasury Secretary Hank Paulson secured the authority to bail out or even nationalize the two huge mortgage underwriters, the hope was that the government's explicit backing would be enough. If the government pledged to bail out the two agencies in an emergency, the theory went, that would reassure investors, who would keep buying Fannie and Freddie debt, since they wouldn't have to worry about a default. And the capital raised in the debt offerings was essential to keeping the two firms solvent so they would continue to buy mortgages and prevent the housing market from sliding even deeper into gloom. Complete Story » ...
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