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NEW YORK (AP) -- 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
Asian stocks edged up, the dollar gained and government bonds fell on Monday after Washington proposed an emergency plan to rescue the top U.S. mortgage finance companies, offering to buy shares if necessary. The plan was hatched in an attempt to calm investors after Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) stock both plummeted more than 40 percent last week on spiralling fears that both companies, which are pillars of the housing market, were under capitalised and the credit crisis toppled a fifth U.S. bank.