Via the New York Times:
Senior officials from the Bush administration and the Federal Reserve on Friday called in top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, and told them that the government was preparing to place the two companies under federal control, officials and company executives briefed on the discussions said
The plan, which would place the companies into a conservatorship, was outlined in separate meetings with the chief executives at the office of the companies’ new regulator. The executives were told that, under the plan, they and their boards would be replaced and shareholders would be virtually wiped out, but that the companies would be able to continue functioning with the government generally standing behind their debt
So, maybe this explains the mystery Wall Street Drop yesterday?
What is more interesting is this doesn't actually appear to be a bailout. It's a plain takeover, so the grand privatization, agenda, the ones who believe free markets take care of eveything.... is going to have the government seize two major financial institutions?
Update: It appears the Wall Street Journal is saying the stock will be diluted and the executives who made this mess will leave their posts....eventually and an injection of cash.
So, obviously with major newspapers reporting quite different seize details the truth will probably be repressed to not rock the markets, which it all will anyway.
Devils of course live in Details.
Seekingalpha has a mix of the two terms reported above. The executives are immediately out, the stock will be diluted not worthless and capital will be injected slowly in order to not show the enormous cost immediately.
One thing I think all will say is true: This is the largest financial intervention in the United States history.