It seems that certain individuals are under the assumption that FRE/FNM are cheap value plays and expect the US Govt to provide a bailout and the "Value" investors will ride the bailout coattails. #1 This will not happen, FRE/FNM stock will be worthless under a government rescue. #2 A rescue will be, liquidation of FRE/FNM as a private entity followed by a gradual selloff of MBS instruments on the open market. A new entity will appear but shareholders will not be entitled to any ownership stake. Sorry folks but you need to take due diligence before you squander your hard earned money on an uneducated and foolish gamble.
^ That's the market. Let people do whatever they want with their money, so smart money can swoop in and take it. I agree with you 100% btw though about FRE/FNM shares bring worthless and not being bailed out. It will be... interesting... to see how it trades Monday.
That Reuters crank call must have made someone a shit load of money friday. Imagine picking up the phone and having all your orders laid out. talk about printing cash. but monday 100point drop, dow 11000 close. FRE/FNM will gap down.
FNM july 15 calls opened at 0.05 and traded as high as 1.30 at the open, Scottrade would not let accounts go long FRE common without talking to a broker on the phone. apparently their system was so swamped that e-fills were way late although options were filled promptly
Why should sharehlders get bailedout? Then dotcom bubblers (and similar bagholders) should also get bailed out.
Paulson bailout. #1 increase the line of credit #2 take an equity stake. IF you shorted and did not cover friday, it could be a real painful monday. Rule #1 for shorts, cover all positions at the end of the day or a nasty surprise could wait.
Yeah, that sure was a nasty surprise the overnight shorts got Friday morning. Oops, wait a minute.....
That is indeed a bold call my friend, a whole nickel. Especially when the ES is almost up a percent already tonight.