The government is basically doing this because if these company's fail, we're done for. I read somewhere that Fannie Mae holds the mortgage for 1 in every 5 houses in the United States - thats alot of people. Another reason for the bail out is because of the fact that so many mutual funds own shares of these two companies. So many people would be affected by the loss of these giants that its not something the government is worth risking. And chances are, the government won't bail out individuals failing to meet their mortgage payments.
As for the part about ending "short selling" i have not heard of this and i doubt that it will end. Investing in these two stocks may be a good idea in the long run, but im not sure about right now
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