Atrios disagrees with the idea that thay are too large to fail, and says that they should fail, at least from the perspective of their shareholders, that these organizations can be reconstituted as fully government entities, as Fannie was until the late 1960s.
The support of (re)nationally is the general opinion of the blogosphere cognoscenti turns out to be pro-nationalization too, and, on the Marketplace radio today, I heard wingnut "economist" Amity Shlaes suggest the same thing, only she suggested that the "healthy" parts be re-privatized, leaving the taxpayers holding the bag for the bad parts.
It turns out that there is actually no disagreement, as Krugman endorses nationalization too in this blog post. It just did not make the cut in the limited space in his Times OP/ED.
He also notes that as the housing market inflated, the GSE's became a smaller part of the market (chart pr0n):
In any case, it's clear that the statements by the Fed and the Treasury Department have stabilized things, at least for now, as Freddie Mac, clearly the weaker of the two GSEs, just successfully sold $3 billion in short term debt, $2 billion for three-months at 2.309% and $1 billion six-monthsat 2.496%. the company said.
On the other hand, we have a number of investors saying that they are basically insolvent, including George Soros and Jim Rogers, and Goldman Sachs is predicting at least another 35% stock decline.
As a bit of interesting historical information, the Washington Post has a nice article about how the GSE's built, and used, their lobbying clout to prevent restrictions and capital requirements from being increased.
Well, they got what they wished for, much to their unhappiness.
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