Bloomberg News reports that Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are down significantly and their credit default swaps are up. What gives? Rumors abound that these two government-sponsored mortgage bundlers will need to raise $75 billion as they take write-downs.

Thanks to a new accounting rule -- FAS 140 that seeks to stop companies keeping assets in off-balance sheet entities -- Fannie and Freddie may need to bring mortgages back onto their books, requiring them to put up capital. Fannie has raised $6 billion in capital to offset writedowns and Freddie raised $13.5 billion since December and said last week that it plans to raise $5.5 billion more.

But these stocks have not done so well this year. Today's declines extend Fannie's 2007 drop to 62% and Freddie's to 66%. I am not surprised that those fears are out there. I posted that these two could be the subject of a $1 trillion government bailout. So a $75 billion capital infusion sounds like chump change compared to the bailout. I am a bit surprised that this comes as a surprise to investors. But I would not be trying to catch these falling knives either.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned