Troubles at Fannie and Freddie: What It Means for Investors; Will shareholders lose out even if there is a government bailout?(Federal National Mortgage Association and Federal Home Loan Mortgage Corporation) From: U.S. News & World Report | Date: July 11, 2008| Author: Shinkle, Kirk | COPYRIGHT 2008 All rights reserved. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group.Copyright information

Byline: Kirk Shinkle

How big is too big to fail? We may be about to find out. This week's dizzying tumble in Fannie Mae and Freddie Mac, government-backed lenders who hold or guarantee more than $5 trillion in securities backed by American mortgages, is the latest ignominy to befall markets in the wake of the housing and credit crisis.

At one point on Friday, both had slumped 40 percent, though shares rebounded late in the day. The day's volatile swing follows...