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[The following is excerpted from Bill Cara's Daily Report from Saturday, Sept. 6, 2008]

After the US Jobs data was published Friday at 8:30am ET, the DJIA futures sank and the market continued south for two hours. Suddenly – maybe it was a leak that Fannie (FNM) and Freddie (FRE) would be saved by this Administration – US equity prices firmed.

Whatever is happening with Fannie and Freddie seems to me to be a well-crafted maneuver by Washington insiders (Mr. Moral Hazard instantly comes to mind) to help Wall Street in the remaining days of this Administration. Oh sure there will be cries by panic-stricken investors that Fannie and Freddie are on the verge of collapse and that this single problem is the source of America’s economic and financial stress (i.e., simultaneous economic recession and credit crunch) at the moment. But, as I see it, the ‘Blame it on Fannie & Freddie’ story is being scripted by public relations propagandist of the first order, Hill & Knowlton. Let’s just say for the record that the Boards of Directors and CEOs of Fannie & Freddie have quite recently publicly announced that their enterprises have adequate capital to sustain operations until well past the coming change of Administration. Then, why the panic?

What is wrong with America – the greed and gluttony of Wall Street and Washington insiders – will look like smack-mouth football in the next month, and the central characters behind it won’t give a damn. This is wrong – they know it; you know it.

The fact there is nothing you can do about it – to the detriment of your children and their children – is a tragedy. The decisions made in September and October by your elected representatives – societal leeches of the highest order -- will steal the wealth created by a whole generation of Americans.

PIMCO, the Fed of NY, the Treasury Secretary – oh my! Mom & Pop, you have been set up for a fleecing.

Yes, these are interesting times.

Source: Why the Panic over Fannie and Freddie?