Financial markets believe that the game is up for Fannie Mae and Freddie Mac, the Government Sponsored Enterprises that provide or guarantee half of the mortgages in the United States. As our graph shows, there has been a sharp spike in the implied probability of GSE bankruptcy. Are we prepared for a GSE collapse? How will the mortgage market continue to function?

FT: The way forward for Fannie and Freddie
Barron’s: The Endgame Nears for Fannie and Freddie
U.S. Treasury: GSE Initiatives
WSJ: Truce Time in the Fan-Fred Wars
WSJ: Greenspan Sees Bottom in Housing, Criticizes Bailout