those following fnm as a proxy for the economy (and who followed my suggdstions on it)
re-acuired a chunk of fnm when it broke back below $1.
one dollar is a magic marker for fnm. currently it is trading just under 1 3/16. (new readers are asked to note that i still run charts by the normative trasing currency, the “bit”: 1/8 of $1.)
currently the so-called press is caught up in looking at bernanke’s lack of interest on accepting responsibility for the failure of regulators to regulate. that is in fact a critical problem. fixing that problem is its own issue.
“fixing housing” is yet another problem. with 30% decline in pricing in some critical markets, with bottom only beginning to be in sight, let alone formed, there’s lots of need for right-offs, re-papering, and generic games that will leave fnm common as wall paper.
the difference here is that the mkt will eventuallly sort thru housing. it may take 5-20 years.
at some point, the us treasury will be acquiring fnm stock @ 1. and bleeding it into the mkt…or it will be forgiving the debt. if the mkt requires that forgiveness, things suck.
the treasury bet is that it will profit from the wts (unlike some other tickers, where warrants are used to game the mkt) and will be bleeding some stock into the mkt in slow intervals.
so..if fnm a buy @ 1 3/16??
or is it time to cash out on the recent buys @ 31/32?
those who bought at 31/32 have 40% apr for the year locked in now for that part of their risk capital sectiojned to real estate.
Posted under business
This post was written by admin on January 12, 2010
