Fnm Fre

I agree - I'd be surprised if the bailout wasn't finalised before Monday morning.

I think 2 cents is too generous for shareholders - zero is all they should get.


Quote from The Kin:

We may very well have a BSC situation where the Treasury takes over Fannie and Freddie over the weekend followed by the Fed making a .25% cut in the discount rate on Sunday to clam the markets.

$2 is far too generous though. Maybe 2 cents.
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If you can figure out what is going to happen you can make a killing. I think its likely the stock will go down but if it doesnt the squeeze will be huge, so I'm not sure if I add at this levels
 
Well the $3 FRE puts and the $2.50 FNM puts still provide an opportunity to make money on a stock price below $2


Quote from Daal:

If you can figure out what is going to happen you can make a killing. I think its likely the stock will go down but if it doesnt the squeeze will be huge, so I'm not sure if I add at this levels
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Quote from m22au:

Nothing that isn't already out there:

(1) FRE meeting with Treasury (WSJ)
(2) Bloomberg story about $200 billion in bonds to rollover before end of September.

The answer is probably quite simple: today it (finally) sunk in that common equity holders will get zero (or close to it) when FRE and FNM are nationalised.

For reasons I am unsure, that concept did not sink in as much on Monday or Tuesday.
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My gut feeling is that this will not be the case but rather the common share holders while losing a good bit if they bought and held, will, in the end, be at least partially bailed out by US tax payers. Frankly I take no stock in Barron's prognostications whatsoever, as of late it seems they have been used to manipulate and have little credibility in my mind. (Consider, as just one example, their truly idiotic, recent, front-page call on GM.) Think about the mutual funds and institutions that own fanny and freddy and i think it will be clear that these guys will be rescued in some form or other at, of course, the tax payers expense. All Treasury has to do is let the word on the action to be taken "leak" to favored funds and institutions ahead of the public, and they can position themselves appropriately to take advantage. I just don't see current equity being permanently wiped out as Barron's has predicted "may" happen. But, to be sure, it is a bad situation no matter what, and underscores the ultimate depth of the recession we are entering.
It will be quite a few years before the real estate/banking/building sectors recover! (Thank you Mr. Greenspan!)
 
I understand your point, however I think there have been sufficient leaks this week to give professional money managers time to dump the stocks.

Also, I don't think that Paulson can "sell" the idea that taxpayers should bailout shareholders.

Quote from piezoe:

My gut feeling is that this will not be the case but rather the common share holders while losing a good bit if they bought and held, will, in the end, be at least partially bailed out by US tax payers. Frankly I take no stock in Barron's prognostications whatsoever, as of late it seems they have been used to manipulate and have little credibility in my mind. (Consider, as just one example, their truly idiotic, recent, front-page call on GM.) Think about the mutual funds and institutions that own fanny and freddy and i think it will be clear that these guys will be rescued in some form or other at, of course, the tax payers expense. All Treasury has to do is let the word on the action to be taken "leak" to favored funds and institutions ahead of the public, and they can position themselves appropriately to take advantage. I just don't see current equity being permanently wiped out as Barron's has predicted "may" happen. But, to be sure, it is a bad situation no matter what, and underscores the ultimate depth of the recession we are entering.
It will be quite a few years before the real estate/banking/building sectors recover! (Thank you Mr. Greenspan!)
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There is no systemic risk to wiping out shareholders, and its virtually all upside since it decreses the amount of taxpayer money involved. dont a lot of ETs cry about the fed sticking to its mandate of full employment and all the easing it leads to?Well, expect paulson to try to save as much as money as possible, he knows its his duty
 
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