friend

Fannie, Freddie Common Stock Is Now A Call Option

One can bury oneself under graphs and complicated models .

Why not deal with the obvious of limiting the unlawful naked shorting ?

The US economy and the average investor get hurt when stocks oversold by powerful naked shortings .

Why costs would be the stopper in eliminating an unlawful practice ?

The policing of the unlawful naked shorting is long overdue while the unlawful " artists " is taking illegally billions of dollars from the US economy and from the average investors every day .

Fannie & Freddie Are Here to Stay

I agree .

USA built their financing using the two GSEs as the nucleus .

The two GSEs are USA and they have been working successfully for many years .

There is no point to monsterize the two GSEs .

Every establishment has rooms for improvement .

Do things possitive that helps .

Yes , I buy their stocks .

They have the established know how and they are resourceful .

Their troubles are only temporary and they have survived more than two downturns or depressions by their own power , in the past .

The rescue plan legislation is analogical to " adding wings to a tiger " .

Investing in the two GSEs is like investing in USA while there will be a huge profit as a reward .

Bad News for Housing Stocks, Good News for Homeowners?

It seems logical that the covered bonds concept would not work especially when executed by banks which have no or little experience in this area ; ending up in a legal mess seems eminent .

Fannie / Freddie ( GSEs ) have been successful in carrying out their business for many years ; they should be fine in doing what they have been doing .

The US financings are structured using the two GSEs as the nucleus , for many years .

Any change to the established structure when the economy is fragile , would only intensify confusion , loss of public confidence and faltering of the economy .

Changes should be executed when economy is stabilized .

No Quick Recovery for Stock Markets

Manipulations in the stock market , feeding in expense of the US economy , are the fuel of the vicious cycle that spirals into an eventual financial destruction .

Naked shorting , an unlawful manipulation , where short sellers may borrow astronomic amounts of stock shares for selling while the lenders have only samll quantities of those .

The well capitalized short sellers may drive down any stock to any low point , for the fact that there are unlimited supply of stocks to borrow .

Drastic drops would naturally attract panic sales at a loss .

The average investors would lost heavily and some of my friends once well to do , consequently , fell behind in their mortgage payment .

Foreclosures jumped more than double since October , 2007 when the financials started to fall .

Should the financials be made to fall by naked shorting , while the rescue plan being legislated , the confidence of the average investors would be completely destroyed .

The financials and thereby the economy of USA would then be routed to destruction .

This is the crucial time to buy against the short sellers .

SEC made " emergency measures " to curb naked shorting but nullified its effect by exempting market makers to the measures .

Financials fell drastically while the Bush Administration stated that the rescue plan would be legislated .

The drastic drops strongly support that naked shortings are still very active .

Average investors invest in the future and thereby would not sell at the said announcement by the Administration .

The US economy cannot turn around unless the naked shorting can be eliminated .

SEC can simply require delivery of the borrowed stock shares within one or two days .

The lenders have to have the stock shares to be delivered .

Naked shorting would then be naturally be extinguished without any extra paper work or confusion .

Why does SEC not using such simple but effective measure to curb naked shorting ? We don't know .

Buy against short sellings until SEC put its acts togather .

The Facts Behind the Coming Congressional Mortgage Bailout Bill

Foreclosures have been rising at great speed since October , 2007 .

The timing is matching exactly the slumps at financial stock market .

These home owners who lost their homes might be the same victims who have suffered grave loss , over the slumps .

Those who stored their savings in bank stocks which had been stable for about 5 years , would lost most severely .

They are simple , hard working people but victimized by the naked shorters .

The immense power of naked short selling drove the bank stock pricings lower than lowest .

SEC allowed such unlawful manipulation , one article indicated that some published records have shown that some short sold shares were not delivered for over 200 days .

SEC announced emergency measures to police naked shorting on last Wednesday and somehow two days later , nullify the effect of their own measures by exempting the market makers .

The requirement of delivering the shares short sold by the next day seems reasonable under the computerized system .

Naked shortings in the now distressed economy intensify the vicious cycle that spirals towards economic destruction .

The government has a duty to serve the general public .

The bailout or whatever one names it , is a measure to reverse the cycle towards a better economy .

Why not ? I know , you short sellers , don't agree .

Mother of All Short Squeezes?

Yes , why does the unlawful naked short selling being allowed openly by SEC ?

Even at emergency , SEC offers policing to only 19 investment banks for 30 days .

How about the regional banks where they have already been hurt by naked short sellings .

The naked short sellers can short sell unlimited quantity of shares of any bank by not having to borrow the same .

Such short sellers then have the " privilege " to command an unlimited supply of shares .

Such short sellers are naturally invincible since they have been well fed financially in expense of the economy of USA .

Yet , SEC would only police for 19 investment banks .

Why does the lawmakers tolerate such notorious violation of the law ?

Further , banks are often required to shore up their balance sheet forcing them to sell newly issued stocks at depleted pricing .

An article indicated that the same short sellers who depleted the banks' pricing would buy the newly issued stocks for covering their position .

Magic ! short selling " nothing " at a high price and buying back the tremendous quantity of new issues at a dirt cheap price .

A small group of short sellers make huge profit on the misery of a very large number of innocent people .

Is this vicious cycle of selling phantom stocks at high prices while covering the position with cheap new issues , really happening under the eyes of lawmakers ?

Just in case , Banks should have a grace time to shore up their balance sheet until the naked short selling is limited .

U.S. Markets: Is it Time to Throw Caution to the Wind?

Yes , the investors are unconvinced .

The Administration , the Treasury and the Senates are making big plans in response to the rising foreclosures and depleting financial stocks .

It is notorious that " naked " short sellings intensify to a huge extent on the depletion of financial stocks especially that of the regaional banks .

SEC has revised the rules in policing " unlawful manipulation through naked short selling that threatens the stability of financial institutions " .

Such rules become effective tommorow , July 21 , 2008 and yet these rules don't protect regional banks .

Regional banks have very little exposure to the subprime and yet their equity were in general depleted about 60% in the last three months .

Such banks have originated a lot of mortgages for Americans when they establish their homes .

For instance , Regional Financial (RF) is a profitable local banking network , which has been dedicated in Charity and community works , in addition running their banking business .

The stock pricing for RF was depleted from $23 in April to $ 7 in July . The stock price came back some last week and yet it is at a 56% discount from that of April , 2008 .

One invested in such banks on a long term basis and not for a quick profit , would find oneself losing so much that one could not even afford his mortgage payments .

No wonder , foreclosures are on the rise .

SEC would help to stablize the financials in a meaningful way by protecting all banks from the " unlawful manipulation " .

I trust that SEC would extend this protection rule to all banks at the soonest .

Otherwise , it would be a disgrace and a snap in face of USA .

Historic Financial Collapse Underway?

The " learned " author suggested that Fannie / Freddie due to worth zero dollar while the US dollar should slide .

The author , impressed me that salvaging Fannie / Freddie , the two government sponsored entities ( GSEs ) is like a " crime " .

I heard one said that the recent foreclosures stem from two sources :

1 ) the subprimes alleged to be fraud related ; someone organized to inflat property values by fraudulent appraisals and then mortgaged same to banks under the names of individuals with poor credit ratings ; the walking away would reap good profits for the organized criminals while leaving the banks with huge expenses and over valued properties .

2 ) the severe drop in price of the financials since October , 2007 have left traditional investors broke and unable to make mortgage payments . Foreclosures thus extended to the real people .

The " naked " short sellers intensified the damages on the economy .

Judging from the history of loss incurred by Citigroup (C) , the subprime issue can be speculated as over or almost over ; loss from over 10B in the 4th Q , 2007 to the 2.5B in the 2nd Q , 2008 .

The main hurdle now is the foreclures inflicted with the traditional investors or the good guys who lost all by confronting the unreasonably sharp drops in bank prices since October , 2007 .

Say , Regional Finance (RF) , a profitable regional banking network which has little or no exposure to the subprime , went down from $ 23 to $ 7 from April to July or in just three months .

Oh , RF has about 1.5% non performing assets (NFA) which are lands good for home construction purposes .

The real estate maxim tells us that land by nature , appreciates in value . Such NFA is in fact valuable asset to the bank and the same leaps when the real estate market becomes normal .

Investing into the future and thereby invest in financials .

When financials go back up to a reasonable level , the good guys would have their savings back to update their mortgage payments .

As a result , foreclosures would be reduced and the real estate market would be back to its normal functioning .

Some article indicated that Fennie / Freddie were told by the US government to loosen up their policy in accepting mortgages at the time when the subprime problem had surfaced while banks then generally raised their standards .

Such " startegy " was an attempt by the US government to boost up the real estate market at the time .

That attempt failed for the loose rules would naturally , invite more fraudulent subprimes .

Fannie / Freddie ended up with mortgages that they would not accept under their own policy .

On viewing the year 2001 / 2002 downturn , Fannie / Freddie flared better than or comparable to strong pretigeous banks like Bank of America .

Fannie / Freddie have proven themselves to be effective and profitable when being allowed to use their own standards in assessing mortgage applications .

Even being handicapped , the combined loss to date for the two GSEs is about 10B which is about the same as what Citigroup has lost in its 4th Q , 2007 .

Such quantity of loss is obviously manageable under today's standard .

Freddie's CEO has repeatedly told the media that their retained earnings are sufficient to finance the GSE through this crisis .

The shoring up by the US government is more for gaining back public confidence since half of the US mortgages are guarenteed or owned by the two GSEs .

Yes , substandard policy attracts frauds and eventual mortgage failures .

Published articles indicated that the substandards were used by subsidaries of investment banks and not regional banks .

The two GSEs straddled into these substandards reluctantly on a demand by the government to salvage the real estate market .

One would trust that the two GSEs would be more than happy when being allowed to go back to their own lending practice proven to be effective and profitable .

The " learned " author accepts that the economy would completely collapsed should the two GSEs fail .

The shoring up of the two GSEs would avoid such collapse .

The author however , suggested that a complete collapse in economy would best serve the US people as oppose to the backers' claim that the US people would benefit when the two GSEs or economy being uplifted .

People do have difference in opinions .

Protecting Your Wealth and Profit During the 2008 Crash

The " learned " author recommended readers to long oil and short financials .

The author confirmed his spculations by quoting historical data .

By the same token , history also tells us that what goes up must come down while what goes down must rebound .

I read another article 10 minutes ago saying that USA government should " crack down on Wall Street traders who are driving up oil prices by buying huge quantities of oil just to resell at a higher price " ( the " " is a direct quotation from the article ) .

Further , many recent articles indicated that some traders drove down the financials by " naked " short selling ; that is , driving down the price of a stock by heavy selling on the same stock without the possibility of having the same stock ; thereafter , buys back the same stock at lower prices to make profits ; confusing but magical ! Making profits out of selling nothing .

The author suggested to readers that they should long oil and short financials .

Is the author asking readers to support the manipulative oil " traders " who are likely to be cracked down soon as well as to support the " naked " shorters where their activities are to be limited by Monday or tommorow ?

The author indicated that the oil stock (SOL) recently went up three times from his recommended entry point of $ 9 and thereafter gave back a good portion of those gains ; using up 300% to a now up 70% as told by the author , the updated lose back is 230% !!?

Should the government take action to crack down like what they are doing on the " naked " short sellers , the oil bubble is destined to burst .

The author pointed out that the shorting index (SKF) for financials went up 133% from May to July .

Oh yeah , the " naked " short sellers did a great job in depleting the stock prices of financials ; many traditional investors who stored their hard earned savings in the otherwise stable financials must have lost almost all .

However , the author then show readers that the updated data recorded only a 50% increase since May 1 .

Using 133% - 50% as told by the author , the shortings have decreased by 83% !!?

Are we looking at the rebounding of financials as shown by the data given by the author ?

The " naked " short sellers are supposed to be illiminated by Monday or tommorow ; are we going to have a continuous rebound or going back to the lower than lowest for financials ? One would know this answer by the end of this coming week .

The traditional investors would naturally hope for a continuous rebound .

They of course , would like to recover their hard earned savings so that they would be able to update their mortgage payments .

The coming back of the financials would certainly reduce foreclosures by giving back the savings to the general investors .

The spiral can go up when we manage to overcome the " destroyers " .

Just How Terrible Is Housing as an Asset Class? Roubini Weighs In

For an ordinary citizen in any country , marriage - have kids - a home -financially sound , are the the package that one trying to achieve at all times .

Home is the essential and a must to any family .

My " learned " author here suggested that the Administration ought to give up on helping the public to acquire a home because such attempts are proven bad investments .

Firstly , we are talking about people's homes and not investments .

Secondly , houses and land properties are the best investments in any sound economy .

The author pointed out that such is not true in USA .

I can see why by my experience in the stock market since August , 2007 .

Any middle class investing his / her hard earned savings into the supposedly " safe " bank stocks ended up losing all or became heavily in debts .

The once well to do family would not be able to pay their mortgage any more ; foreclosure is inevitable .

The subprime crisis became visible in August , 2007 .

The crisis as some article unfolded , might have been related to fraudulent matters - inflating appraisal on a house and then had some one with bad credit rating , mortgage the same house to a bank at a " price " well over and above the true market value .

I can see those financials relating to the subprimes would have a downward run in their stock value .

However , the short sellers by their concerted effort extended the downturns to regional banks which have nothing to do with the subprimes .

Many middle class who invested " safely " in the regional banks got hurt.

The vicious cycle naturally , spiralled into more and more home foreclosures .

The Administration saves the economy by shoring up Fannie / Freddie .

Those opposing to it apparently , work to a complete destruction of the economy of USA .

The SEC Panics

The short sellers cut down every rise eminent in the financials .

Most obvious is what had happened in the morning of July 14 .

FNM / FRE traded over $ 11 before the bell in response to the Sunday's backing announcement .

After the bell , the two were short sell down to about $ 7 in about a 10 minutes time .

Not just the said two , all bank stock were short sell down drastically .

The short sellers are well fed in the expense of the banks' equity .

The concerted power released in such a short time can only be done by some conspired group of short sellers .

I do think that the Administration is doing the right thing in curbing short sellings , at least on a temporary basis .

USA is facing a financial war and not just a simply market of supply and demand .

Short sellers can take a vacation leave to spend their money easy earn in expense of the economy .

Give the banks a chance to survive , please .

Let the investors get back to their old habits of viewing that a significant rise would mean a sign of recovery from the rock bottom price rather than being a signal to a further major drop .

Dollar Falls to Record Low Over Fannie and Freddie

USA is losing severely in a financial attack .

It is true that there is the subprime problem .

Short sellers pull down financials would only fuel the vicious cycle that spiral the economy from bad to worst .

Sure , the short sellers are strong and concerted .

All financials could go down more than 5% or even 10% in one or two hours time .

The concerted strength can only be released by some conspired power .

Such conspiracy is a crime .

As well , it certainly would successfully push a panic button to the general investors who may only want a quiet life when retired from long years of work .

Cutting the equity of bank stock by pulling down their prices would of course put the bank in a credit crunch .

The short sellers are fed in expense of the bank's equity .

The only way to savage this economy is to buy against the short sellers so that the financial equity or pricing can be raised to a reasonable level .

Fannie / Freddie ( FNM / FRE ) are the stocks of most strategic importance .

Should a strong defender step in to buy against the short seller so that the pricing can be maintained at a reasonable level .

The whole financial market would be at the start to be stablized .

FNM / FRE would need the equity or reasonable pricing in order to facilitate the passing of the mortgage rescue law .

The mortgage rescue plan would effectively stablize the housing market on a permenant basis .

I knew for the fact that some government encountered a similar financial cresis with the short sellers .

The same government buy against the short seller to maintain a reasonable price level , by using a trust funds being set up with the taxpayers' money .

The trust funds then owned a pile of the stock purchased from the open market without diluting the corporation at issue .

The stock price then grow back to normal and the trust funds made huge money for the taxpayers .

The short sellers lost a huge chunk of money and disappeared .

The bad news used by the short sellers disappeared as well .

Can the bulk of people , general investors and public inclusive , win this financial war against a small group but organized short sellers ?

Financials: Don't Believe the Rumors

The short sellers are raging an attack at the financials to an extent of damage , worse than the 911 terrorist attack .

The only difference is that the short sellers are much stronger than the defenders .

Yes , it is a financial war and not just a market of supply and demand .

All bank stocks are commonly seen sliding over 5% in price in just about 2 hours time , regardless the financial strength of each individual bank .

Such strong concerted power can only be released by a conspired group of short sellers .

Conspiracy is criminal .

Panic catch on by the general public and the price went down further .

The defenders of price become weaker due to their loss of equity .

Lowering price or equity , credit crunch , weakening economy all come into a vicious cycle and domino effect .

Such huge depletion of pricing has nothing to do with the value of the bank stocks .

Some banks are paying dividend at a rate of more than 20% to the now depleted price .

Yes , they would cut dividend in the next quarter while their equity is cut tremendously by the invincible short sellers .

Strong defenders are needed to buy against the short sellers so that the badly depleted price can be pull back . The confidence of investors would be accordingly restored .

The Fannie / Freddie stocks are immensely important in strategy .

Should the Fannie / Freddie stock pricing be stablized , the pricing of the rest of the financials are less easy to be pull down further .

The equity values of the two are of immense importance to the passing of the mortgage rescue plan .

The mortgage rescue plan would then help to stablize the housing market .

I know for the fact that some government did encounter a similar financial war .

The same government stepped in to buy against the short sellers by setting up a trust funds using the taxpayers' money .

The same government won and made money for the trust funds as a result that the pricing grow back to normal .

The shortseller lost a huge chunk of money and disappeared .

All those bad news the shortsellers used disappeared as well .

Can the good guys win the war ?