Yes...Jim wears bowties often when on television interviews...I have not seen him lately...but I don't watch much financial tv anymore.
Yeah that is a key point super', about the earnings. NXTL comes to mind when it went from a PE of 70-80 to below 10 in one quarter. Hey, the other shorts you are looking at... any you might like to share? No prob if the answer is no.
FNM and to a lesser extent FRE are the two pillars of the ENTIRE derivatives market. That market is show cracks all over... If you thought LTCM was bad...wait until you get a load of FNM.
All these issues with FNM/FRE are very well known. The Treasury, Fed Reserve and Wall Street establishment will do whatever is necessary to protect these golden geese. Saying they are highly leveraged does not put them in the LTCM category. I seriuosly doubt they are exposed to Russian junk bonds, etc. Their problem is a simple one, namely hedging against prepayment risk for their huge mortgage portfolio. Their size and the dynamics of hedging create problems, but they have the best financial engineers in the business plus the backing of the government.
Do we have to go through this whole eBay deal again? Yes, it is over priced, yes it is overvalued, yes it is extended on the weekly. Although you didn't mention it, I do not like the management. The CEO is a big options hog and was implicated in the Goldman ipo spinning scandal. As a female CEO, she gets the same sort of free pass the media gives Carly, who demonstrated the old Lucent touch again last night. But this is a cult stock that also happens to have an incredible franchise that cannot be duplicated or challenged. Earnings are meaningless, value is meaningless. Unless the public decides to pull significant moeny from mutual funds, this one does not get hammered down to value land. Of course, just as with FNM, it will have pullbacks and they could make for a nice short. I just don't see a big disaster here.