Fannie's Cut-Off Shorts - Stop Trading! (5/7/08)

Recap of Jim Cramer’s comments on Stop Trading! Wednesday May 7. Click on a stock ticker for more analysis.

Fannie Mae (FNM): Cramer blamed a 140 point drop in the Dow at 2 o’clock Wednesday on “an existential crisis among short-sellers.” When Fannie Mae rose in spite of terrible earnings, cutting its dividend, and lowering guidance, the shorts “covered, and now you're seeing there's no bid underneath.” Cramer doesn’t think the time is right to get into financials, because the short covering has inflated the entire sector.

Centex (CTX), Beazer Homes (BZH), D.R. Horton (DHI): Cramer says homebuilders “have no earnings power whatsoever,” and he doesn’t think it is time to buy. “It's not like mortgage rates are coming down,” he said.

Quanta Services (PWR), Trinity (TRN): Rising oil prices will be good for wind power, and Cramer would buy PWR and TRN.

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Comments

[Richard Schweitzer]

I would like to see S A provide, by link or otherwise, and preferably with some commentary (factual as usual), daily information on the "short positions," particul;arly the changes in specific sectors.