Fannie and Freddie news roundup:

1. Paulson Statement on U.S. Action on Fannie, Freddie

“Let me make clear that these two institutions are unique. They operate solely in the mortgage market and are therefore more exposed than other financial institutions to the housing correction. Their statutory capital requirements are thin and poorly defined as compared to other institutions. Nothing about our actions today in any way reflects a changed view of the housing correction or of the strength of other U.S. financial institutions.”

This is the meat… read this if you want to understand the plan.

2. Paulson Engineers U.S. Takeover of Fannie, Freddie

“The FHFA will take over Fannie and Freddie under a so- called conservatorship, replacing their chief executives and eliminating their dividends. The Treasury can purchase up to $100 billion of a special class of stock in each company as needed to maintain a positive net worth. It will also provide secured short-term funding to Fannie, Freddie and 12 federal home-loan banks, and purchase mortgage-backed debt in the open market.”

3. Fannie, Freddie Capital Concerns Prompt Paulson Plan

“Analysts have speculated that the Treasury would wipe out common shareholders, while seeking to shield preferred stockowners from total loss. Fannie and Freddie preferred shares are typically owned by banks and insurance companies. Their $5.2 trillion of debt outstanding is held by investors including Asian central banks, and would probably be guaranteed, analysts said.”

4. Regulators to Help Banks With Fannie, Freddie Shares

“Paulson urged banks to contact their primary federal regulator if they believe losses on holdings of common or preferred shares in Fannie Mae or Freddie Mac will cause them to fall below the government’s benchmark for ‘well-capitalized’ institutions.”

5. Treasury Extends Secured Credit Line to Federal Home Loan Banks

“The Federal Home Loan Bank system is the largest U.S. borrower after the federal government. The FHLBs, lend money to more than 8,000 thrifts, credit unions, insurers and commercial banks at below-market rates, mainly to finance their mortgage holdings. The banks also buy and hold mortgage-related assets.”

6. U.S. Losses on Fannie, Freddie May Be $300 Billion, Poole Says

“‘I would not be surprised if their total losses aggregate about 5 percent of their obligations. Their obligations are in the neighborhood of $6 trillion dollars. And 5 percent of that is about $300 billion. Five percent does not seem to me to be an outrageous guess at this point.’”

7. Yen Declines After U.S. Government Takes Over Fannie, Freddie

“‘A government bailout will certainly stabilize Freddie and Fannie and improve risk appetite for carry trades.”’

8. Asian Stocks, U.S. Futures Rally on Fannie, Freddie Takeover

“Asian stocks surged the most in eight months and S&P 500 futures expiring in September climbed 2.6 percent to 1,273.80, the steepest advance since Aug. 5.”

9. Treasuries Tumble After U.S. Takes Control of Fannie, Freddie

“The bailout gives investors less reason to favor the relative safety of government debt. Treasuries had gained for three straight months as writedowns and credit-market losses surpassed $500 billion.”

Give the last word to the bonds: