Fannie Mae's stock has dropped about 16 percent in two weeks. And even before the abrupt slide, it's been three years since the stock made any big gains for its investors.

The company's books are being questioned. It will be years before we know if Fannie's financial reports really have reflected how the business is doing.

Top Fannie Mae executives are in danger of losing not only their jobs, but also their political careers. Odds are some of them will be gone long before the accounting snarl is untangled.

And yet, most investment analysts continue to tell their clients to buy Fannie Mae stock.

Two weeks into an accounting scandal that is sure to transform the Washington region's biggest, richest business, Wall Street is humming, "Stand by your Fan."

A few analysts have downgraded Fannie's stock, but the shares still get better ratings than the average stock in the Standard & Poor's 500-stock index. As of Friday, 11 analysts were rating it "buy," eight "hold," and just two "sell," according to Bloomberg News.

Since the scandal broke, the stock has plunged to $65.25 a share from $77, but the analysts telling their clients to buy it are predicting Fannie stock will go as high as $115 within the next year or two.

Fannie will be one heck of an investment if that happens . . . but will it?

It's way too soon to predict how the scandal will evolve, let alone how Fannie's business and stock price will be affected. Predicting, however, is what investment analysts get paid to do, so for the past few days they have been serving up instant analysis. Their comments should be taken with more than a grain of salt -- they ought to be served like margaritas in a glass crusted with the stuff.

Without waiting to see what the ongoing federal investigations will turn up, analysts are choosing sides, dividing themselves into Fannie whackers and Fannie kissers.

The "buy" recommendations by and large are coming from big Wall Streets firms that have continued to push the stock even though it has underperformed the market for the past three years. Some of these same firms earn big fees from underwriting the sale of billions of dollars of Fannie's mortgage-backed securities.

Firms listed by Bloomberg as rating Fannie "buy" or its equivalent are Argus Research Co.; A.G. Edwards and Sons Inc.; Bank of America Corp.; Bear, Stearns & Co.; Credit Suisse First Boston LLC; Merrill Lynch & Co.; Piper Jaffray Cos.; Smith Barney; Sanford C. Bernstein & Co.; Susquehanna Financial Group and UBS Securities.

Only one new "sell" rating has been issued since the scandal broke -- by Fox-Pitt, Kelton Inc., a New York affiliate of Swiss Re, the giant European insurance company. The stock has been downgraded to a "hold" or neutral ratings by analysts at Morgan Stanley; Prudential; Wachovia; and Friedman, Billings, Ramsey Group Inc.

Interestingly, analysts on both sides are predicting Fannie Mae's growth will slow and its profits will shrink as the result of changes in operations and accounting that will be required to answer the criticism of regulators. What divides the analysts is whether Fannie will remain a good investment -- especially in the next few months.

The cautious view is expressed by Sandler O'Neill & Partners, a small New York investment firm: "We believe there is still more negative information to come from the ongoing investigation, which could take a substantial time to play out.

"Overall we think there is substantially more downside risk than upside potential in the share price. We have a very negative outlook on FNM and strongly advise against accumulating share on perceived weakness." Needless to say, that advice comes with a "sell" rating.

In contrast, recommendations to buy the stock are based on the premise that when all the turmoil over accounting has calmed, in a couple of years, Fannie will be fine.

"Don't worry, Wall Street," is the message written between the lines of the "buy" recommendations: Fannie will remain the King Kong of the mortgage business -- America's No. 1 source of mortgage money -- and Wall Street's favorite golden-egg-laying goose. Fannie will continue to feed investment banking firms hundreds of million of dollars in fees for arranging fundraising mortgage-financing deals every year. There is no threat to the billions of dollars that mutual funds and other professional money managers have invested in Fannie's stock, they soothe.

Distilled from the thinking of analysts at several firms, the case for buying Fannie stock goes like this:

The stock has retreated far more than warranted by what's known so far about Fannie's accounting problems. The basic charge by the Office of Federal Housing Enterprise Oversight is that Fannie used "cookie jar" reserves in its accounting. In good times, it stashed away profits in the "cookie jar;" in bad times, it dipped into the stash to bolster earnings.

The result was that Fannie reported steady growth to investors, even though its actual results included quarterly ups and downs.

The accounting rules that Fannie is accused of breaking are so technical and obscure that they will produce "a protracted debate about their merits even among accounting experts" predicts A.G. Edwards & Sons, the St. Louis investment firm that is one of the biggest in the Midwest.

These analysts are betting that accounting questions will take so long to resolve that by the time the issue is settled, investors will have forgotten what all the fuss is about. That's what happened at Freddie Mac, where similar issues came up two years ago.

Freddie Mac shares were trading at about $60 when its accounting scandal broke in June 2003. In less than a week, the shares had plunged to about $47.

This Friday, Freddie's shares closed at $67.22. Even though investigations into Freddie's financial foibles continue today, the stock is more than 40 percent above its nadir and more than 10 percent higher than it was before the whole scandal began.

Wall Street analysts express little interest in what will probably be the biggest accounting question in Washington: Did Fannie Mae pump up its profits so top executives could qualify for big bonuses?

That's a sexy issue to politicians, the media and Washington investors. Many analysts agree that it could lead to the departure of Fannie's chairman and chief executive, Franklin D. Raines; its chief financial officer, J. Timothy Howard, and maybe others.

Top executives may well get the ax, acknowledged Susquehanna Financial Group of Philadelphia. But, "ultimately, we believe the long-term impact from management turnover would likely prove to be negligible, as the business model should remain intact."

That, too, follows the pattern of Freddie Mac, where half a dozen executives quit or were fired with no discernable damage to Freddie's business or its stock price.

Critics of Fannie and Freddie will argue that the recovery of Freddie's stock and the "buy" ratings for Fannie shares reflect one of the things that is fundamentally wrong with the two government-chartered mortgage companies.

Fannie and Freddie are "too big to fail," they argue. The government can't afford to let them go under because their collapse would disrupt the entire housing finance system. Home buyers would have trouble getting loans and would pay higher interest rates. Investors holding the billions of dollars worth of bonds and other securities backed by Fannie and Freddie mortgages would suffer losses that would strain the world financial markets.

For the very same reasons, Wall Street has decided Fannie and Freddie are too big to bail out of. Investors have lost a few billion dollars since Fannie's stock started to skid, but that is nothing compared with the losses that might occur if the majority of analysts turned against the stock.

A batch of "sell" recommendations could trigger a stampede that would trample not only Fannie's stock, but also Freddie's and very possibly the stocks of other big mortgage lenders, triggering a market crash. Telling investors to bail out of the stocks would also signal them to dump Fannie and Freddie's mortgage securities, causing a crisis that could disrupt world financial markets and drive up interest rates.

Wall Street can give plenty of good reasons for holding onto Fannie's stock, but investors also need to realize there's a bad reason for doing so: what might happen if Wall Street said, "sell."

Chief executive Franklin D. Raines's Fannie Mae is under intense scrutiny.