interpretation of FNM/FRE news

Discussion in 'Stocks' started by scriabinop23, Jul 13, 2008.

  1. Any ideas on the opening?

    Sounds like the fed is providing short term $$$ without hitting equity, thus destroying the FUD token the rumor-mongers have had. Sounds like nationalization (via share purchases) is not in the cards (since there is nothing about a forced nationalization in this).
     
  2. paden

    paden

    well, i watched eur/usd, nzd/usd, usd/chf, and usd/jpy, the dollar has performed well since the news.

    Of course, the index futures are up as well, but I was placing more trust in the currency market reaction

    it certainly is setting up for a short cover monday, but this market has been like a flea on crack, and could just bounce all over the place again.
     
  3. stockholders win, taxpayers lose
     
  4. Decel

    Decel

    I'm no expert.

    Imo it goes up, but does not beat Thursday's highs. If it does it will be a very green day.

    And will retrace downwards throughout the day.
     
  5. I'd presume the stocks open a lot higher, but from there I have no idea since I don't know what steps they are proposing with regard to the equity.

    I'm sceptical that they will transfer wealth from the taxpayer to equity holders. That would be pretty much tantamount to Grand Theft Taxpayer, to enrich a few extremely wealthy institutions and individuals - very hard to justify, far more so than the BSC bailout which already raised a lot of hackles. IMO they may do something like get a huge convertible or preferred stock, and that would be *death* for the current common.

    So I am gonna read up on the statements & commentary before the pre-open, then probably short FRE/FNM within a few mins of the open. If vol collapses I will probably play it with puts instead.
     
  6. Digs

    Digs

    If FNM and FRE issue more capital ( just like LEH with there $6bn funds raised at $28, then down to $15) then this dilutes the current shares. This means more shares available, then prices down for FRE and FNM

    USD down on printing money, so this means gold, oil, euro up.

    It could be the PPT buying futures this early in the pre market session, let see if it holds.

    If it was a real positive futures would be up 30 or 50 handles.
     
  7. sharp10

    sharp10

    Could anyone tell me how does this change the big picture?

    I thought the problem lies on the rate of default of loans that FNM and FRE guarantee.

    Am I wrong?
     
  8. Maverick74

    Maverick74

    You are on crack. Please cite the last day the futures were up 30 handles or 50 pre-market. I'll be waiting patiently.

    Just another ET poster that does not trade for a living spewing commentary. What a great site!
     
  9. So; last week; everything is fine except the price of stock dropping;

    And this week; they needs fed's help? after all; there were a big problem in them;

    No wondering their stock price falling like rock; SEC should investigate who leaked these inside info before fed been told. :D
     
  10. gwac

    gwac

    No I do think anything was wrong other than the market taking a run at them. Now the excuse for the run has been taken away.

    Rumours are killing financials.

     
    #10     Jul 13, 2008