Stan Muse_

Investing in the Housing Crisis Aftermath: Stock Picks and Pans

I do not agree that HD and LOW are in bad shape. People have to really spruce up their homes in order to try to sell them in today's market. That's the busines they are in - home improvement and repair. It's a lot like the auto parts business. Look at AZO and AAP, they are doing great despite the bad economy because people have to keep their cars running due to scarce cash. I think HD and LOW are both great buys - if one likes to go long in a bear market. Personally, I am in cash until the housing crisis shows more sighns of an end.

What If Fannie and Freddie Could Go Private? [Housing Tracker]

As I understand it, FNM has a market cap of about $6.5B and is backing $5 Trillion in mortgages. They have about $40B in cash reserves. Doesn't this just seem way out of whack to everyone, given the state of the mortgage crisis? Their cash reserves can only cover 1% of defaults. The defaults are occuring at over 1% per month. How long can FNM possibly survive in their current state? Most of the experts say the mortgage crisis will continue for at least another year. I think we are in for a hell of a meltdown unless the government writes FNM a blank check for over $300B, without knowing if that will even cover until this is over. I just do not see that happening. FNM is a day trade at best, there is no way I would hold a common position over night.