actually not so bad news: http://www.bloomberg.com/apps/news?pid=20601087&sid=a17G1.vWMkuU&refer=home
Their increased spreads profits are a drop of water in a swimming pool. $100b in negative networth and some people exicted they can pick a few basis points in new business... Btw, it looks like fnm is a better short than fre, if you consider that fre has more concerns priced on it and that fnm portfolio is highly correlated to fre that same fate should be the result. even in the case fre gets capitalized first the market will immedially discount that as a major probability on fnm stock. that stock is also less volatile. fre portfolio does seem worse but they are both undercapitalized so whether the final shareholder deficit is bigger on fre than fnm shouldn't be a big deal since the capital raising should look the same in terms of discounts