So now we know that the Treasury is rescuing Fannie Mae and Freddie Mac by placing them into a conservatorship. The news that something was brewing had been bubbling up since Friday, when the Wall Street Journal first reported that Treasury officials and executives of the two companies were scrambling to put a plan together and planned to announce something over the weekend. Later on Friday the New York Times reported that the plan included placing both companies under a "conservatorship." Yesterday the Times filled in some more details, noting that the executives of Fannie and Freddie had reached an agreement with Treasury, and that under the rescue plan "the Treasury Department will buy billions of dollars in new mortgage securities issued by the companies and inject an unknown amount of capital into them in quarterly installments."

An important turning point in the Fannie and Freddie drama, which dragged on through the summer, seems to have come when government inspectors uncovered continuing accounting problems at Freddie Mac. The New York Times reported yesterday that "the Treasury Department concluded that Freddie's accounting methods had overstated its capital cushion."

At eight o'clock this morning the Treasury department announced that it would hold a press conference on Fannie and Freddie at 11 o'clock. A tired and noticeably thinner Treasury Secretary Hank Paulson explained the plan. "Paulson looked horrible when he made the announcement," a readers says. "He clearly has not slept in 72 hours."

The Wall Street Journal's Real Time Economics blog has a transcript of Treasury Secretary Hank Paulson's statement here. So far the exact details of the plans are vague. Here's Bloomberg's write up and here's the Wall Street Journal's. A "technical briefing" is now underway at the Treasury.