From Housing Wire:

Most analysts we spoke with suggested that the move to take over Fannie and Freddie would do little to ultimately help housing or restart the non-agency mortgage market, and would also do equally little to stanch a credit market crisis that has ripped apart balance sheets for well over four quarters now, despite strong investor optimism on Monday.

Merrill Lynch economist David Rosenberg told Housing Wire that the bailout amounts to proof of how broken the financial system really is. That’s not the spin presented with the bailout. The government was seen as acting aggressively to ease the credit crunch.

Don’t buy that line, and don’t put much faith in that stock market rally Monday. One thing that’s becoming clear in this mess is that no quick fix exists, and that the government is usually a step or two behind the problem. The bailout drew praise from many quarters, but it’s time for the government to stop patting itself on the back and acknowledge the tough times still ahead.