Fannie and Freddie stocks? Kiss them goodbye

— -- A: The government bailouts of mortgage giants Fannie Mae and Freddie Mac are stunning signs of how much pressure the economy and housing markets are under.

You can debate whether or not the government should be in the business of bailing out these enterprises. And you can also puzzle over what it means to have the federal government becoming one of the largest mortgage financiers in the nation. All these topics and others are discussed at length in USA TODAY's coverage in stories like this one.

But for investors, the damage is done. Shares of Fannie Mae and Freddie Mac are being quoted in pennies. And the government has made it pretty clear that the interests of the housing market, not shareholders, are its top concern.

In fact, some argue that the dual mandate of Fannie and Freddie, trying to serve both shareholders and the public good, is one reason the firms failed.

It's unclear what the future of these institutions are. The entire mortgage market, starting with Fannie and Freddie, are likely to be revamped under the leadership of the new president.

With so much uncertainly, it doesn't look great for the future of your holdings. If you still own the stocks, consider selling and taking a tax loss. If you have lost enough, you can offset all your other taxable capital gains plus $3,000 of ordinary income. And carry over what you can't use this year.

If you're tempted by Fannie and Freddie's low share prices and are thinking about buying more, do yourself a favor, and don't.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Click here to see previous Ask Matt columns.