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On Tuesday evening, the Securities and Exchange Commission extended its emergency rule limiting short selling of Fannie Mae, Freddie Mac and 17 brokerage firms to Aug. 12.

"The commission will continue exploring other remedies for the broader marketplace to further protect inventors from distort and short artists," said SEC Chairman Chris Cox in a statement following the announcement.

It has long since passed the point where the downgrade of a company's credit rating or an announcement of reduced earnings because of problems with mortgages or with mortgage-backed securities stuns anyone. However, on Monday there were particularly dire warnings about E-Trade, the on-line brokerage firm, which is apparently heavily invested in sub-prime mortgages in its own portfolio.

Maybe Fannie Mae's nightmare is over. Sort of.

According to independent and joint press releases from the Securities and Exchange Commission (SEC) and the Office of Federal Housing Enterprise Oversight (OFHEO) on May 22 the two agencies have reached agreement to settle long running investigations, litigation, and general unpleasantness resulting from the alleged misstatement of Fannie's financial statements dating back several years.

The cost of the settlement in pure dollars to Fannie Mae is...