6 of 7
BACK NEXT
Wall Street
Wall Street
Freddie and Fannie are likely to remain public companies, despite calls to take them private.
Paulson indicates he wants Fannie and Freddie to continue as government-sponsored enterprises and public companies. Critics counter that that structure is fundamentally flawed: executives and shareholders reap the benefits of the government's backing during good times, while taxpayers are stuck with the tab in bad times.

"The GSE concept was a sham," says Roger Ehrenberg, a former Deutsche Bank executive. He believes shareholders in the companies will eventually be "largely wiped out" as mortgage losses overwhelm their thin capital cushions. Still Paulson's comments - and the unusual SEC action this week to limit short-selling in the stock of the companies and some other big financial firms - suggest that forcing a change won't be easy.

NEXT: Investors
Last updated July 18 2008: 4:35 PM ET
More Galleries