Oil Prices Hit New High Friday, Stock Market Takes Beating

The economy took a one-two punch Friday.

Oil hit a new record and stocks for Freddie Mac and Fannie Mae tanked further amid fears the housing giants could run out of money.

The prospect of either of the nation's two largest mortgage holders failing is a huge concern, but experts say the bottom line is still all about oil.

Freddie Mac and Fannie Mae hold or guarantee half of the almost $10 trillion of debt in this country.

Washington is afraid foreclosures could drive one, or both, of them out of business.

The Senate's banking chair insists they are solid.

"These are sound, solid institutions with more capital than the law would require. They're in good shape," said Senator Christopher Dodd, who later added, "There's no reason to even be talking about failure here."

What's oil got to do with Freddie Mac and Fannie Mae?

"It's going to be very difficult if the government moves in to bail them out. It's going to put a lot of pressure on the bond market and the dollar, which in turn is going to keep oil at a very high level," said Addison Armstrong, market research director for Tradition Energy.

Oil hit another record Friday: $147 a barrel.

President Bush met with his economic team and urged Congress to do something before their August break.

"They have a responsibility to explain to their constituents why we should not be drilling for more oil here in America to take the pressure off of gasoline prices," said Bush.

Experts agree high gas prices are mostly about supply and demand, but some in Congress blame speculators, and introduced legislation today to reign them in.

"This is a factor we can do something about," said Senator Susan Collins.

Industry groups, from truckers and pilots to gas station owners agree there needs to be some balance put back into the act.

Gas is so high now, even Bobby Harron, the winner of Florida's lifetime gas lottery, with a $39,000 in-hand, is skeptical.

"This'll last me for a day or two," he joked.