Fannie Mae and Freddie Mac have recorded stock gains of 44% and 49% since March 10, respectively, as the cost of insuring against a debt default by the government-sponsored mortgage companies has fallen by more than 60%. The rebound comes after a government-brokered bailout of Bear Stearns by JPMorgan Chase, which signaled to investors that the government was committed to making good on its backing. Morgan Stanley analysts say calmer credit markets could allow the companies to "write up" assets that had previously been written down.

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