Both Fannie and Freddie finally made it to the big leagues. What is it that both of these companies have managed to do? They both have closed above the fabled $1 a share mark. as I mentioned in my February 21st article the threat of delisting was upon the companies and that something had to happen. Either the companies get delisted or the miraculously go above $1.
Regular reader Ron wondered aloud whether or not some sort of trickery would the explanation for the continued propping of these otherwise dead companies. As I said in my comments following in the article, this is "one of the biggest speculations in history." No sooner said than done, the stocks fell promptly by 40% and bottomed on March 6th. From that ridiculously low level the stocks rose at least 185%.
We finally got the answer that I suspected but only time could tell. The government, lacking the barest sense of fiscal responsibility, has triumphed again. It is well worth watching Fannie Mae and Freddie Mac for a sense of what is to come next. I find it interesting that both companies bottomed on March 6th while the Industrials and Transports bottomed on March 9th. Maybe, just maybe, these government entities are on the inside track. I'll be following them as you could imagine. Touc.
No comments:
Post a Comment