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Editor's note: Our "On the Brink" series will provide daily insight into the financial firms facing capital shortfalls and the growing pressure from short sellers in the market.

A government shakeup of

Fannie Mae



Freddie Mac


could come as soon as this weekend,

The Wall Street Journal

reported late Friday.

High-level talks between

Federal Reserve

Chairman Ben Bernanke, Treasury Secretary Henry Paulson, Fannie Mae CEO Daniel Mudd, Freddie Mac CEO Richard Syron and the companies' new regulator, the Federal Housing Finance Agency, were planned for Friday, the



While the


did not disclose details of the plan in its report after the market's close, it said it would involve use of the Treasury's new powers to inject capital in the companies, approved by Congress earlier this year. It also would include changes to management at both companies.

Fannie Mae

last month shuffled three top executives, but not Mudd.

Shares of the two government-sponsored mortgage giants have been volatile in trading over the past few months, as traders reacted to rumors and speculation over whether a government bailout was imminent -- a development that would likely wipe out shareholders.

Fannie Mae shares closed up 9.7% to $7.04 Friday, while Freddie Mac shares finished up 3% to $5.10.

This article was written by a staff member of