9 Responses to “FRE FNM Buying Opp”

1. Coryea Capital Says:
   

   WTF — FNM & FRE secure $5 trillion in loans approx. every 1% default is about $50 billion in capital they need to raise.

   Given the astronomical amount of dumbasses who took out a $300K mortgage while being a shift manager at McDonalds, I think the default rate in those loans will be pretty high. (I honestly think its fucking ridiculous that the gov’t has essentially rewarded the financially irresponsible to begin with and now might make taxpayers pick up the tab for the dumbasses who spent outside their means and are defaulting on their debt– un-f*ckin’ believeable)

   Bear with me on this, but the amount of capital they will need to raise is going to be absurd. If the fed steps in, they have to print more money (which Paulson, Mr. F*cktard claims he is “for a tougher dollar”) and then our imports will go up dramatically. If the default rate exceeds 5% I think the Fed would have to step in, but in the event of that the equity would go to $0, no? The mortgage sector is fucked and cannot be saved short of the Saudis literally buying the entire debt because printing more money is not the solution. America can’t save themselves by essentially loaning themselves more money. Eventually the rest of the world is going to be fed up with our bullshit and OPEC will switch the price of Oil tu Euros and China will call the entire portion of the national debt they hold and we’ll be even more fucked than we are currently.

   My point is, even if they back the GSEs, why do you think the stock price will go up?

   Prepare to bend over and grab your ankles.

   July 11th, 2008 at 11:19 am
2. IShortYouNot Says:
   

   http://www.bloomberg.com/apps/news?pid=20601087&sid=a1k.u7Jaj2ts&refer=home

   If we believe what’s being told, each company would need to lose over $30 billion pretax this quarter or next to reach the point where they’d begin takeover proceedings/whatever else.

   Not to mention, I believe I did say this was a trade, not an investment. There’s so much fear on these firms right now that I expect to see a short term bounce on any form of legitimate good news. Also, the short interest is absurd and covering on any positive news will be a hideous rally. But there’s a good chance I’m wrong so the risk I’m willing to take is a small one. By saying I’m a ‘big buyer’ it means I’m an enthusiastic buyer of the current risk/reward profile these two firms have set up, more preferably FRE.

   Entered into a Long position FRE @ 5.07
   Entered into a Long position FNM @ 8.91

   July 11th, 2008 at 11:26 am
3. boca Says:
   

   Thank you IShortYouNot, whew, now I don’t feel so alone with my FRE calls, for a trade of course. (Please see my post on Alphadawgg’s thread.)

   July 11th, 2008 at 12:00 pm
4. IShortYouNot Says:
   

   UPDATE

   Closed Long position in FNM @ 9.88

   July 11th, 2008 at 12:11 pm
5. alphadawgg Says:
   

   You’ve got some outstanding profits already! Excellent trade!

   July 11th, 2008 at 12:23 pm
6. Woodshedder Says:
   

   Nice trade shortyounot.

   July 11th, 2008 at 12:41 pm
7. IShortYouNot Says:
   

   Cmon FRE!!!! Keep on chuggin’!!!!
   6.61/6.62 at 1:48pm

   July 11th, 2008 at 1:49 pm
8. IShortYouNot Says:
   

   UPDATE

   Closed Long position in FRE @ 7.10

   July 11th, 2008 at 1:59 pm
9. boca Says:
   

   Yep, I got a profit working in my little FRE trade, turned out to be a good gamble. I had a hunch the government was working on some BS to shore them up today.

   I like your style IShortYouNot, hope you keep writing about your trades. (Also I’m wondering if I know you under another name.)

   July 11th, 2008 at 3:11 pm

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