What the Fannie-Freddie rescue means to you?

Encouraged to take bigger risks, the 2 mortgage giants did just that, and now they're reeling. Fixing the mess will take billions -- and make getting new home loans much harder.

Investors, mortgage holders and policymakers are gawking at the New York Stock Exchange these days like drivers passing a 100-car pileup, mesmerized by the crash of two more financial giants and hoping the debris won't damage their own vehicles.

Yet unless you have all your money under the mattress, fat chance of avoiding a direct hit now, as the same sort of misguided government policies that brought us $145-per-barrel oil and a five-year Iraq war have now clearly taken the American financial system to the brink of ruin.

The problem in focus today is the implosion of the two largest U.S. financial institutions focused solely on residential mortgages, Fannie Mae (FNM, news, msgs) and Freddie Mac (FRE, news, msgs), and how the government hopes to rescue them.