Until about 10am on Monday morning, everyone thought they had read this script before, many times, during the credit crisis.

First there is a run in the stock market on an institution in trouble, like Bear Stearns (NYSE: BSC - News) or Countrywide Financial. The government intervenes, often over the weekend, with easier money. Then everyone pretends the worst is over. Cue a rally.

Why has the script deviated this time? On Sunday, the US government took steps to make more explicit its implicit guarantee for Fannie Mae (NYSE: FNM - News) and Freddie Mac, and virtually declared war on short-sellers by seeking the right to buy back their stock. Short Fannie and Freddie, they said, and you'll be fighting the US Treasury.

But Monday morning, Fannie and Freddie's stocks began to settle barely changed from their levels at Friday's close - a remarkable outcome given last week's huge sell-off.

Meanwhile, commercial banks suffered a sell-off. The KBW banking index fell 5 per cent at one point. This was the unforeseen consequence of the move to bolster Fannie and Freddie. Fannie and Freddie are too big to be allowed to fail. They are central to the US mortgage market. Their debt is a more popular investment with non-Americans than the whole US stock market.

But many other large banks are not too big to fail. The government's newly tangible support for the agencies aroused the fear that such action could only be needed if the situation were truly dire - and that only intensified fears for institutions that are not so crucial.

Markets may yet return to the script. The Monday after the Bear Stearns fire sale saw a deep swoon that became the precursor for a big bear market rally.

But traders do seem to be coming to the realisation that there can be no quick or easy fix for the US credit problems.

john.authers@ft.com

www.ft.com/freddieandfannie

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