The Fannie and Freddie Apocalypse Trade

Let's say that last Tuesday you were looking for a safe port in the storm as markets imploded. Where would you most profitably have gone? Oil? Gold? Cash? Swiss Francs?

How about Fannie Mae (FNM) and Freddie Mac (FRE)? As the following table shows, busted and semi-nationalized Fannie and Freddie were the best investments going over the period, stomping the rest of the financials -- not to mention every supposed safe haven in sight. What a strange, strange world we live in.

Comments

[Ishortyou:]

I kind of wander how come Freddie went up from 25 cents to more than a dollar stock in approx. a week? is it something that the public is missing? does anyone know anything about it? Please some comments will be appreciated

2008 Sep 24 01:53 PM

[bigmoneygrip:]

Read FREForm 8-K, you are looking at a $10 stock, ansd it under $2 right now, crazy

2008 Sep 24 02:24 PM

[Ishortyou:]

Well I was interested like what book of business changes explain this, liabilities, etc. so far they are buying more mortgages to free up lending but not so sure how this explain an upside, unless of course this is all about hedge fund going wild.

2008 Sep 24 02:27 PM

[bigmoneygrip:]

Again,
Read Freddies 8-K, you are looking at a $10 stock, and it under $2 right now

2008 Sep 24 02:38 PM

[User 268932:]

AMEN!!! bought 10K shares @.29, wish I'd bought 250K shares. And of course my "expert" broker advised against it.

2008 Sep 24 03:10 PM

[richard_nog...:]

I lost my shirt when fannie lost money. I made it all back yesterday and today. Now I'm gonna sit on the sidelines a wait a while.

2008 Sep 24 03:12 PM

[richard_nog...:]

I lost my shirt on Fannie and Freddies demise. I got it all back between yesterday and today.

2008 Sep 24 03:13 PM

[Ishortyou:]

hmm...weird to me, with the 200 billion coming in and 80% common stock takeover looks fishy to me it went up to more than a dollar doesnt make sense unless I am missing something.

2008 Sep 24 06:00 PM

[tombuyit:]

I bought I bought FRE at 1.10 and a ton at .32 and I love it- Sold half position today and I am FRE ROLLIN

2008 Sep 24 07:54 PM

[MiguelP:]

Bigmoneygrip: sorry man, I'm not from the US. What does it mean "Freddies 8-K"? Is that a article or form? Where can I see it?
Thanks

2008 Sep 24 10:24 PM

[MiguelP:]

ok, I know now what a 8 k is, searched it in google:)

2008 Sep 24 10:34 PM

[Andy May:]

Pretty simple. The lack of regulation on banks makes me ill. The fact that the U.S. govt. is the largest owner of assets in the U.S. and the largest mortgage player and the largest everything is sad. We teach our kids that we're capitalists. We're not. We're really politicos looking for ways to make $200 million a year like Angelo. Way to go Angelo. I hope you're able to take the money with you. 1987 was way worse. Let's not forget that the market was down 35% in 2 days. The market is only have 12% thus far. Bush needs to resign. His speach was pathetic.

2008 Sep 24 11:02 PM

[Poor me:]

Bought at $1.00, just waiting now. Anyone remember when the Fed's bailed out Chrysler. Went from about $4 something, to $34 something within a year, if I remember right. The same will happen here. Buy while you can. I was told by a rep. it might not be safe also. I couldn't get in on Chrysler, but I have got in on Fannie. Can't wait.

2008 Sep 25 03:04 AM

[zebra zebra:]

Freddie Mac will be increasing 50 cents a day for the next 6. The stock should be around 5 based on the 100 billion bailout plan.

2008 Sep 26 12:43 PM

[zebra zebra:]

Complete restructuring was expected...

2008 Sep 26 12:45 PM