HEINDRICK SO

America’s famous couple Mr. Mac and Mrs. Mae have made headlines again today after their stock plunged to their lowest price since seventeen years ago – not to mention the whispers of a government bailout.

Fannie Mae slid 14 percent today to close at $13.20 in New York, down 67 percent so far this year. Freddie Mac declined 22 percent to close at $8, bringing its slump since the end of December to 77 percent.

To ease concerns of a bailout or failure, here is what Treasury Secretary Henry Paulson Jr and Fed Chairman Bernanke had to say,

“Fannie Mae and Freddie Mac are also working through this challenging period,” Mr. Paulson said early in his testimony before the House Financial Services Committee. “They play an important role in our housing markets today and need to continue to play an important role in the future. Their regulator has made clear that they are adequately capitalized.”

Mr. Bernanke said that Fannie and Freddie “are well capitalized in the regulatory sense” but added that they, along with other major financial institutions, need to raise their capital levels further.

Stockholders of the companies will already know, but for those who have not been eyeing the stock, here are the bottom lines from NYT

In the last week alone, Freddie has lost 47 percent of its value, and Fannie is off 28 percent. Expectations of default at the companies has also risen; it costs three times as much today to guarantee a two-year Fannie bond as it did three years ago.

Another crisis pressing both companies is their continued ability to raise money from investors. Freddie Mac had previously announced that it intended to raise $5.5 billion later this year. Both Freddie and Fannie are widely expected to post additional losses later this year that would require them to raise more money from investors. But with their stock prices plummeting, such fund-raising may be made difficult.

It’s tough to speculate what may happen to Freddie and Fannie. Paulson is meanwhile trying to downplay fears and front-page headlines of their government contingencies. He says that they plan these contingencies all the time, and thus are nothing to specualte about. However, with the recent demise of big name banks like Countrywide and Indymac – there really is no bank that is to “big” to fail.

[Full story @ NYT]

[Additional Coverage @ Bloomberg]