John Hussman has written a conspiracy theory, a seven step process, that describes a sketchy process on how the Fed and Treasury, working in concert, will refinance the low quality loans held by Fannie and Freddie. As a result, the two end up getting cleared of their low quality debt and holders of US Treasury bonds will collect the interest from this refinancing. The rest of us will simply pay the interest (higher taxes). The good news in this scenario is there will not be a collapse of the two giants. The bad news is... it's just more of the same. Taxpayer's without representation.
His conspiracy theory of monetary manipulation without Congressional approval is similar to what has already occurred with TARP funds, and recently in HERA funds. His conspiracy story may soon be another reality story.