I would take the money your thinking of using to buy Fannie and Freddie and hit the blackjack tables.

Your odds will be better and at least you'll get some entertainment out of it.

Gut reactions from a relative newbie:

don't do it because: It's tanking, it will probably tank more, it's a very risky play partly because it's very volatile percent wise, so you can lose a lot of money quickly going either long or short... on other hand if you have money to WASTE and you do some research and feel there is some possibility that within a few years or will recover, then buy away.

 Speaking of the last thing, does anyone see any possibility now that some news of the so-called bailout is out that FRE common stock could be worth something a few years down the road?

 I also would be interested in thoughts on this: why is it that when news of a possible 'bailout' of FRE came out in July or so, the stock doubled or so? But when the talke renewed of a bailout a few weeks ago, the stock began its last wave of declines. Is it because people were more optimistic in July on what the terms of a bailout might be, whereas in the last few weeks it because increasingly likely that the gov't takeover would do basically nothing for common stockholders?

Three simple questions:

1) Why would you want to buy a company which has been bankrupted by crooks commiting accounting fraud?  http://www.washingtonpost.com/wp-dyn/content/article/2006/05/23/AR2006052300184_pf.html

2) Are the assets (homes) going up or down in price?

3) Is the average pay of the homeowner going up or down?

On the plus side the fed is bailing them out so IF you want to risk your money in the stock it carries a low risk. On the neg side the fed doesn't care about the price of the stock their main concern is to save the company, with that said you do have some risk included. I believe that that there are better stocks out there to make money in the market. This would deff be if you wanted to buy a stock with a low a low risk (cost) and would involve time.