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NEW YORK - The U.S. government is signaling it won’t throw a lifeline to struggling financial companies — except for mortgage linchpins Fannie Mae and Freddie Mac — marking a shift to a new and potentially more volatile phase of the credit crisis.

Such an approach could mean beaten-down investment banks like Lehman Brothers Holdings Inc. and regional banks must now fend for themselves as they try to recover from billions of dollars in mortgage-related losses. That is bound to unnerve an already turbulent Wall Street and make investors even more anxious as they await financial companies’ earnings reports that are expected to be down a stunning 69 percent from a year ago when all the numbers are in.

And, for consumers already squeezed by tightening credit standards, it could mean getting a mortgage will become even harder.The short-term uncertainty about Freddie Mac and Fannie Mae — which together hold or guarantee half the nation’s mortgage debt — was to an extent relieved on Sunday. Federal officials again threw their support behind the government-sponsored enterprises; the Treasury pledged to expand its current line of credit to the two companies and the Federal Reserve said it will provide additional loans if needed.

Treasury Secretary Henry Paulson also said the government could, if needed, buy equity capital in the companies, whose stocks lost half their value last week. The Treasury’s moves would require congressional approval.

But, some of Wall Street’s biggest investors believe there was another message in the government’s announcement — the rest of the financial sector seems unlikely to get a helping hand. Global banks and brokerages have already written down nearly $300 billion in soured mortgage investments — a number projected to ultimately reach $1 trillion.

“The credit crisis has obviously entered into a new phase — the government has one bailout left in them, and this is it,” said Jeffrey Gundlach, chief investment officer of TCW Group in Los Angeles, which invests $160 billion.

“One consequence of Freddie and Fannie is that other firms are allowed to go under,” he said. “If you couldn’t get your act together after four months of unprecedented financing terms, maybe you don’t deserve to be thrown yet another lifeline.”

Worries about financial companies failing intensified after a run on IndyMac Bancorp Inc. led to the bank’s takeover by the government on Friday. It wasn’t the Treasury or Fed helping to keep IndyMac in business, but a transfer of control to the Federal Deposit Insurance Corp. — which backs deposits on all the nation’s banks.

Analysts said these kind of failures will curtail competition among financial institutions, which might in turn make it even harder for some borrowers to get mortgages, personal or auto loans or credit cards.

Treasury, Fed to help prop up mortgage giants
Fed to take action on shady mortgage practices
Feds take over mortgage lender IndyMac 

On Wall Street, Monday could be a critical day, with investors quite nervous amid the uncertainty in the financial sector. Friday saw the Dow Jones industrial average dropping below 11,000 for the first time in nearly two years, and the overall market was down for the fourth week in a row. The government’s support of Fannie and Freddie in part was meant to assuage investors ahead of the opening, and also to reassure markets in Asia and Europe that will begin trading hours before the U.S.

Wall Street will get a better sense of how concerned investors are with Fannie Mae and Freddie Mac’s future immediately Monday morning. Freddie Mac is scheduled to hold its weekly debt auction beginning at 8 a.m. EDT. The auction closes at 9:45 a.m., shortly after U.S. markets open.

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