Seeking Alpha (twice), Colin Barr, Stacy-Marie Ishmael, and many others have blamed today's price action in Fannie and Freddie -- they're down about 20% apiece, albeit from a very low level -- on an article which appeared over the weekend in Barrons. I saw the article too, it didn't seem to have anything new in it, and these are very dangerous levels at which to put on a short. So who's selling?
At this point if you're a long-term buy-and-hold investor you might as well stay in, you've lost the vast majority of your money anyway. And the bond markets didn't seem to care too much about the Barrons article: according to John Jansen the agencies' spreads widened out only about 5bp. So while I'm willing to believe in theory that it was the Barrons article which was responsible for the sell-off, I have to admit that the mechanism by which such price action happens defeats me.
A couple of things worth bearing in mind: This wasn't simply a case of dealers marking down their prices in the wake of the article appearing: volume was significantly heavier today than normal. Also interesting is that the stocks fell in price all day long. In any case, if someone can explain how exactly a Barrons story is meant to be able move a very liquid market like this, I'd be much obliged.