by Joel Bowman Congratulations! If you are an American taxpayer (like us), you now own a share of the risk held by two firms that own or guarantee around half the mortgages in the country. And this at a time when home prices are plummeting, inventories are swelling, foreclosures have reached an all time record and unemployment skipped along to a five-year high of 6.1 percent, further weighing on demand for new digs. But before we break out the champagne, let's take look at what went down... Yesterday Treasury Secretary Henry Paulson announced Fannie Mae and Freddie Mac, the two mortgage behemoths which own or guarantee around half of all home loans in America - some $5 trillion worth – will be placed under "conservatorship." To do so, the Treasury will acquire $1 billion of preferred stock in each of the companies and has earmarked another $200 billion to keep them solvent. In other words, it will exchange its rapidly diminishing supply of economic arsenal for the junk on Freddie and Fannie's books…yes, the very same junk nobody in the marketplace wanted to touch with a ten-foot pole. The news came after Fannie (NYSE:FNM ) and Freddie (NYSE:FRE ) fell over 20% each in after hours trading on Friday. A year ago the two stocks stood at around $60 a pop. Since then, however, they have gone up in smoke. In fact, if you hung around late Friday, you could've picked up a share in either of the nation's largest financial companies for about the price of a pack of cigarettes. Almost nobody bothered, of course...until Hank showed up with your retirement fund account. So, how much are we all in for? Former Federal Reserve Bank of St. Louis President William Poole, who described the burden on taxpayers as "an unacceptable situation," projected the Treasury may need to cover as much as $300 billion of losses. But wait...there's more! This from today's Wall Street Journal: "In addition to its initial acquisition of preferred shares, the government receives warrants giving it the right to a stake of 79.9% of each company for a nominal sum. The Treasury's preferred shares, which carry an annual dividend yield of 10%, will be senior to those earlier issued, meaning the government will have the first right to receive dividends." Common stock, meanwhile, will likely be reduced to zip. The Office of Thrift Supervision, a government agency that supervises savings and loans, estimates there are 17 banks that have a concentration in common or preferred shares of the twins above 10% of their Tier 1 capital. Good luck guys! Meanwhile, we noticed Daniel Mudd and Richard Syron, the respective CEOs of Fannie and Freddie were given the boot. But don't get the Kleenex out just yet. Including pension and other "deferred compensation," the two will receive about $15 million each for their troubles And so ends the great "kinda public, kinda private" experiment of Fannie Mae and Freddie Mac: with the death of mortgage lending in the U.S. as we know it and the taxpayer on the hook for the bill.