Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) shares are finding themselves under increased pressure as concerns about liquidity continue to mount. Many regulators are now calling for government intervention in order to save the government-subsidized entities and preserve the struggling housing market from a larger collapse. Unfortunately for shareholders, federal bailouts are only aimed at saving the company and not necessarily its shareholders.

A government takeover of both organizations is among several options being weighed by the Bush Administration. Officials may push for the firms, which own or guarantee almost half of the $12 trillion in home loans in the United States. Such a government takeover is likely to make the common stock of each company worthless, since paying off shareholders with taxpayer dollars may present a problem to perhaps everyone in the USA (minus those shareholders).

Fannie Mae has lost about 80 percent of its value during the past year while Freddie Mac has tumbled more than 85 percent during the same time. The reason is simply because many of these loans are going bad and requiring the companies to come up with capital that they are unable to raise. The government is expected to wait until these losses hit some $77 billion before it would be compelled to start a rescue.

Others insist that a government bailout would be unlikely because the two institutions have some $1.5 trillion in un-pledged assets and access to the debt market. Some insist that Fannie Mae would have to lose $40 billion immediately and Freddie Mac would have to lose $37 billion immediately in order to be considered insolvent. Housing prices would have to decline 40% nationally and delinquencies would have to rise as much as 10 fold to 12 percent to reach critical levels, according to these analysts.

In the end, there is still a lot of uncertainty as to whether or not the two housing market giants are in trouble. If they are, however, it is clear that shareholders will likely lose out in the event of a bailout. The only people that can hope to get their money back would be bond holders.

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Rohm and Haas Company (NYSE: ROH) shares surged over 65 percent today after rival Dow Chemical (NYSE: DOW) agreed to purchase the company for $15.3 billion. The $78 per share takeover deal includes funds from a Kuwaiti sovereign wealth fund and Warren Buffett's own Berkshire Hathaway. The 74 percent premium may seen hefty to some shareholders, but Dow Chemical executives insist that the strong brands and technologies make the premium worth paying.

The acquisition represents Dow Chemicals' efforts to expand higher-margin specialty chemical markets, which can help protect it from the ups and downs of basic chemical sales. Recently, the company has been struggling with the performance of its basic businesses due to increases in raw material costs that it has tried to pass on to consumers. This deal will make Dow the largest specialty chemical and advanced materials company in the world.

So, just how much will this magic deal help Dow in the future? Well, some analysts are expecting a big boost. Before the deal, analysts have been expecting Dow to earn around $3.50 per share in 2010 and 2011 during the industry trough, but now they are expecting around $4.50 per share. Meanwhile, in 2015 when dow forecasts the peak, EPS is expected to exceed $10 per share. Meanwhile, Dow expects to realize pretax annual cost synergies of at least $800 million per year.

In the end, many investors view this as a very positive move and do not believe that Dow overpaid. The company has entered into a higher-margin business, which should boost growth and earnings multiples. Meanwhile, the move also helps the company realize cost benefits through economies of scale.

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The car market may be hurting in the United States, but sales in Europe are booming for at least one U.S. company. General Motors (NYSE: GM) reported record sales of nearly 1.2 million vehicles in Europe for the first six months of the year. Sales grew 58% in Eastern Europe and 60% in Russia, which offset a weaker market in Spain and Italy.

General Motors has been struggling in the United States recently thanks to a slowdown in the housing market and consumer spending. The result has been an environment where consumers are pinching pennies and loans are difficult to obtain even for qualified buyers. As a result, GM has cut many jobs and taken other measures to reduce costs to salvage its earnings.

The Wall Street Journal also published an interesting piece today pointing out the only way for General Motors to emerge from this mess may be bankruptcy. The automaker is not only too large right now, but also employs too many people in too strong of a union. These are problems that aren't easy to circumvent, especially when it needs $15 billion just to make it to 2010.

General Motors shares are down more than 70% during the past 52-weeks and continue to struggle. European sales may be doing very well these days, but the market is simply too small to make a material difference. And a turnaround in the way it operates in the United States may be too costly to undertake and too difficult with unions.

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