Curious Spectator

Paulson Tops Gross, Greenspan and Ackman in the Mortgage Battle

Please kindly explain HOW "people like Ackman will simply bleed it back out"? And how did Ackman and others managed to make huge profits by shorting FNM and FRE in the first place? Why did the big banks and funds that own FNM/FRE equity stand aside and let it happen? What is the mechanics involved?