Back in the summer of 2008, as the financial system teetered on the edge of collapse, no one knew what would happen to the debt-laden mortgage giants Fannie Mae and Freddie Mac—would they be allowed to go under, or would the government come to their rescue? What would become of the shareholders? Trillions rested on the answers to those questions. Oh wait, someone did know. Treasury Secretary Hank Paulson. And he told his hedge fund pals and former Goldman Sachs colleagues. He just didn't tell you. Because, really—who the fuck are you?

Remember when Bill O'Reilly and Barney Frank almost killed each other on national television? It was, without question, one of the greatest moments in world history, if only because it inspired this Lil' O'Reilly skit. Tonight they met again.

One of the oddest side effects of the credit crunch, which most recently brought about the nationalization of mortgage giants Fannie Mae and Freddie Mac: Salesforce.com shares are soaring. Fannie and Freddie's fall hasn't boosted Salesforce's business. But Freddie Mac has been taken off the S&P 500 stock index, which made room for Salesforce.com. Index-tracking funds which are required to match its makeup have been buying Salesforce.com as a result.

• A battered Lehman Brothers plans to spin off the majority of its real estate investments into a new company and sell more than half its interest in its investment management division. The bank also predicted a third-quarter loss of $3.9 billion. [WSJ, Dealbook]

• Investors generally reacted positively yesterday to the news of the Fannie Mae and Freddie Mac bailout. [WSJ]

Hey, can you even blame all the stupid people saying stupid things about today's Freddie Mac Fannie Mae bailout? This whole thing has been stupid ever since someone decided to call it the Federal National Mortgage Association. Who names something "Federal National?" Anyway, the good news is, no one understood any of this shit back in 1968 when they "privatized" it, and no one — us especially! — seems to really understand it now. We keep LOL-ing at stupid things people say about the biggest-ever government bailout only to reflect a while longer and start to the secret genius of all of it! Let us count the ways:1. "[Freddie Mac and Fannie Mae have] gotten too big and too expensive to the taxpayers." Thanks for sharing, Elle Woods Palin! But ha ha ha, Freddie Mac and Fannie Mae are supposed to be private companies that have nothing to do with the taxpayers who are only now going to find out how "big" and "expensive" their woeful mismanagement is! Of course, in seizing upon this "gaffe" as Democrats did today they kinda missed the whole supposed reason the bailout was "necessary" to begin with, which is to say, that the government exists to protect the plutocracy but also that taxpayers have essentially "implicitly" guaranteed Fannie Mae and Freddie Mac bonds throughout their entire 80-year existences. When the Federal government first announced plans to "privatize" Fannie Mae to help balance the budget in January 1968, an economics reporter at the New York Times named Edwin Dale wrote that the whole thing was a budget "gimmick." By September 1968, Lyndon Johnson aides had appropriated the "gimmick" term themselves, in an Edwin Dale story that employed more smug quotation marks than a Tao Lin prospectus:

• The seizure of Fannie Mae and Freddie Mac by the federal government over the weekend has sent global stocks up sharply this morning. [Bloomberg]
  

Freddie Mac and Fannie Mae, lenders created at the whim of evil government in the 1930s and 1970s respectively, have been brought back under national supervision in the wake of the country's mortgage crisis. The two institutions simply weren't "capitalized" enough to weather the sub-prime storm, and whatever government regulations were left failed like levees under a flow tide of bad debt. And while it will help stabilize the mortgage market, it won't necessarily help people who have sky-high payments and underwater equity. Ever resourceful, Americans in areas hard hit by foreclosure are playing home ownership musical chairs with the banks. All I understand about economics is that I feel poor. So does this mean Bay Area housing will get more affordable?No. While exurban exiles will feel the pinch on payments and at the pump, denser inner-urban communities will probably see rents increase as desperate homeowners look to cut costs and find job opportunities. And it's not like you can expect affordable housing in the likes of Belmont and Saddle River, Ross or Sag Harbor, Piedmont or Greenwich. As bad as renting is long-term for your retirement and rent control may be for their housing markets, apartment dwellers with fixed costs are the least likely to move back in with parents right now.

• Lehman Brothers' Dick Fuld was near a deal to raise $5 billion from South Korean investors, but negotiations broke down earlier this month. [NYP]

• The bill for the auction-rate securities mess is now adding up by the hour. Merrill Lynch, Citigroup, UBS, and Morgan Stanley have all contributed to to the tally. [Dealbook]

• Dan Och's Och-Ziff reported a net loss during the second quarter; the stock has been cut in half since its IPO last year. [Reuters, NYP]

• House and Senate leaders have sorted out an arrangement to prop up Fannie Mae and Freddie Mac. [WSJ]

• Did Goldman Sachs have a hand in the downfall of Bear Stearns? London-based traders at the firm are now under investigation for spreading negative rumors [WSJ]

• The Federal Reserve and U.S. Treasury will inject billions of dollars into Fannie Mae and Freddie Mac to shore up the mortgage financing giants. [WSJ]

• Lehman's stock price took a beating once again yesterday, this time amid chatter that Pimco and SAC Capital were pulling business from the bank. [WSJ, NYP]
  

• Allying itself with Carl Icahn, Microsoft says it's open to restarting talks with Yahoo if Yahoo's board is replaced. [WSJ]