FRE 7.40 -2.86 -27.88% FNM 12.63 -2.68 -17.50% ooooh baby lets see if i bottom ticked them with my post
The govt is not going let them fail, so just like people made a fortune buying bsc at 2. Just wait for a chance and boom 500% return in 1 or 2 days.
correct govt won't let them fail but they will likely have to be nationalized if it keeps going like this. in that case investing in fannie and freddie preferred stocks would be a smart thing to do. don't ask me where but just giving my opinion.
you would have to check to make sure it was senior debt and not subordinated if one took the preferred trade.
Breaking news with Fannie and Freddie! Spoiler <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/K6Ggb_Ozl4E&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/K6Ggb_Ozl4E&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>
A train crashing. If gov't lets FRE and FNM falter, then this country is screwed. Who is going to give out loans?
White House not budging so far on the GSEs. I tend to agree with them. There's no question that they're in trouble in my opinion, but I don't think they're as insolvent as everyone thinks they are. Today's drop was a pleasant jolt for my hurting pockets though. The worst is probably not over for FNM and FRE but I very highly doubt a bailout is going to happen (or even will be necessary).
I think they will need a bailout. We are still just at the beginning of the credit crunch/ housing crisis, so things will get worse. Remember this crisis has been barely going on for a year while the bubble was created over a decade. The whole "government- backed entity" idea was a bad idea since the beginning. The government wasn't supposed to be on the hook for them, but people thought they were- which gave them an advantage and allowed them to grow very large. Now they are just "too big to fail." Their portfolio is 5 trillion, which is scary. I am still sticking to buying commodities, about 30% of my portfolio is in them.
See ... I disagree. We haven't reached bottom yet, certainly not. But the truth is that the current hysteria going down on Wall Street has very little to do with facts. This has more to do with people being jittery over fears that FNM and FRE are basically BSC part deux. I'm not discounting the possibility of a bailout completely, but I believe it's a lot less likely than people think. Frankly I'm wary of even some commodities at this point. With oil spiking to near $150 just because Imadinnerjacket decided to let out a sneeze, there's just too much of a speculative bubble going on for me to put my trust in anything out there. Gold is probably the safest thing, but who knows, it might even be best to just stick your cash in a money market account or something and let it simmer.
Well if the FED didn't allow the investment banks to borrow directly from it, LEH would already be toast. I certainly HOPE things don't get that bad, but the way homeprices skyrocketed so high, I just think they have a LONG way to fall. Add in $150 oil and homeowners are really in a bind. Commodities are a bit scary, but one of my funds is up 7% this year, so I have room for a little correction. Not bad when stocks are down 20% or more. And remember the commodities boom has just started- the cycle shouldn't end so quickly. The more the clueless talking heads on CNBC talk down commodities, the better I feel. I do have a good amount in bonds, TIPS, and cash though.
BSC was not a GSE or former government entity like FNM. FRE was created by the govt to compete with FNM. If we don't bail them out then things will get much worse. Yes, a bailout will be costly and it will hurt the dollar even more but I don't even want to think how bad it would get if the govt just let them hang. The govt can't save everything but these 2 need to be backed. Also, not too sure why you think the hysteria isn't fact based. If you look at the facts then you will realize things are potentially much worse than people understand. I've been posting about it on here for awhile now but no one seems to care.
I think people know the facts, but honestly unless people think there is recovery it will just get worse.
I think the bad idea was bringing them public and forgetting the entire principle of creating huge GSEs like it in the first place. Nationalizing is very risky, but I'm optimistic that it could be profitable to the government in 5 or 6 years (assuming everything holds together by that time).
