The market got a one-two punch from Fannie Mae (FNM, $10.25, down $2.95) and Freddie Mac (FRE, $7.75, down $0.25) as the embattled mortgage giants took Wall Street for a wild ride last week. Fannie fell from $19 to $10 for the week and on Friday hit to a low of $6.68. Freddie tanked from $15 to $7 and change and hit a low of $3.89. Wow. Oil played second fiddle in helping weigh the market down as Fannie and Freddie were the first “fiddlers”.

Damage control was in full force as speculation ran wild that both companies might be receiving a government bailout. In an attempt to ease their slumping share prices and to calm the market, a host of government officials went on record and said that both were “adequately capitalized.”

I didn’t put a lot of faith in those statements (until this morning) and it’s hard to say what will happen with Fannie, Freddie and the Financial stocks in general although a rescue has been put in place. More on this later today.

For the week, the Dow lost 188 points, or 1.7%, to finish at 11,100. The S&P 500 fell 23 points, or 1.9%, to close at 1,239. The Nasdaq actually performed rather well considering the circumstances and slipped 6 points to end at 2,339, a 0.3% decline.

Futures are trading much higher this morning on news that the government has granted the Federal Reserve Bank permission to lend the two companies money “should such lending prove necessary.” Fannie and Freddie would only have to pay 2.25% for any borrowed funds. That’s great and all but shouldn’t we also get the same thing?

Rick Rouse