I guess it looks like the end is near. Supposedly the bailout will be announced tomorrow.

"I think all shareholders will be disadvantaged," Rep. Barney Frank, chairman of the U.S. House of Representatives Financial Services Committee, told Reuters.

You have to love how the government breaks it to you. They never just come out and say "You're screwed.", they always have nice words for it like 'disadvantaged'.

This is a historic event..........for now it's hard to tell which direction the market will move with this news.  The financials may get a bounce but then again the dollar will be getting crushed, unemployment is growing and commodities (oil included) may spike as the dollar plunges.

There is also issues in how Fannie and Freddie have been fudging the numbers to overstate their capital.  The cost of the bailout may be much greater than anticipated.

Hmmmm, wonder if all them rooster tails from yesterday are going to make a difference Monday?

 

 

I’m just playin with ya Horse.       ;-)

After hours isn't always indicative, but hopefully, those who follow the technical indicators I use in my Bottom Fishing group respected the Down Tells flashed on FRE & FNM Wednesday 9-3.

I don't have much fundamental know-how, but based on what I've read, while the common stock holders may get creamed, what's being said about the preferred and others suggests they intend to guard against what might cause the dollar to tank.

Likewise, while a market drop Monday would not surpise me because of Friday's action, neither would an up surprise me.  After all, this takeover might be viewed as that which will solve what ails the housing mess, which I see as a major factor in the economy.  Furthermore, the indicators on a lot of stocks in my watch list flashed positive signs on Friday.  It's not unusal to see a down following (which may be a buy), but sometimes they just take off.

 

Well, its going to depend on exactly how they do the takeover. If they do it in a manner similar to a great big student loan (government backed against default, resulting in lenders lending to somebody with a 300 FICO) I guess it might not be all that bad. I confess I am ignorant as to the ins and outs of this kind of thing, I honestly have no idea how the government goes about taking over something like this and how the process works exactly to screw the shareholders. I suppose if I lived in Cuba or Iran I'd understand the process, since they nationalize something new there every day it seems.

I guess I am glad I didn't buy in when they were at 52Ls, I sure contemplated it because honestly, I did not think it would come to this. I figured they'd print money, sell a massive amount of bonds or something that while bad in the short term, holders 10 years from now could have had a good deal on some stock. But as was pointed out early, who knows what the reaction will be. This is one time I would not want to be trading news, could go either way for sure.

One thing I am sure of is that we cannot allow them to fail. No matter how much it hurts, the country has to do something to fix it. If they collapsed, I'd give it better than 50% odds that it would trigger a worldwide economic collapse which could get very ugly. I am usually against any kind of bailouts, I have never been a fan of the "mixing a little socialism with capitalism" ideal that folks seem to be favoring these days. I would have let the US airline industry collapse, I would not have given them a dime.

Does anyone disagree with this ideal (about bailing out Fannie and Freddie - not my opinion of the US Airline industry) in any way? Isn't this something we have to do at this point?

Gonna be an interesting Monday...

trader_sal:

Hmmmm, wonder if all them rooster tails from yesterday are going to make a difference Monday?

 

 

I’m just playin with ya Horse.       ;-)

Yeppers, I saw all those tails.  As the news was breaking Friday afternoon, there was a lot of speculation on a rally.  If there was every a need for a confirmation on which way the market will move I would say this ranks very high on the "need confirmation" scale.

Just about every banking institution owns a substantial amount of FRE/FNM preferred shares.  If these shares take a hit it will filter down to the rest of the financial institutions.  This makes for a very nervous weekend.  LOL     The devil will be in the details of this plan.

Thank God I don't own any FRE/FNM common shares......these are most likely toast.

It's done! FNM and FRE are officially off the list.

They are gone taken over... . I feel sorry for the common shareholders of FNM/FRE.

http://www.msnbc.msn.com/



sti,
http://stock-trading-ideas.com

No dividend means the preferred shareholders will also take a beating.

Treasury seizes Fannie Mae, Freddie Mac

Webster Defines:
Seize
1 ausually seise \ˈsēz\ : to vest ownership of a freehold estate in boften seise : to put in possession of something <the biographer will be seized of all pertinent papers>
2 a: to take possession of : confiscate b: to take possession of by legal process
3 a: to possess or take by force : capture b: to take prisoner : arrest
4 a: to take hold of : clutch b: to possess oneself of : grasp c: to understand fully and distinctly : apprehend
5 a: to attack or overwhelm physically : afflict <seized with chest pains> b: to possess (as one's mind) completely or overwhelmingly <seized the popular imagination — Basil Davenport>
6: to bind or fasten together with a lashing of small stuff (as yarn, marline, or fine wire)intransitive verb1: to take or lay hold suddenly or forcibly2 a: to cohere to a relatively moving part through excessive pressure, temperature, or friction —used especially of machine parts (as bearings, brakes, or pistons) b: to fail to operate due to the seizing of a part —used of an engine

When all this started up the main people at fanny said in a sec report they where better shape
than ever.....
Who is kidding who....
This should not be accepted as the norm and the private sector should have access to all documents.
The long term effect on the markets is not good imho.
what think ye?



brwtrpilot

trader_sal:

Hmmmm, wonder if all them rooster tails from yesterday are going to make a difference Monday?

 

 

I’m just playin with ya Horse.       ;-)

 

News trumps technicals every time!

My god what a mess. This one is going to hurt.

But it looks like folks still have their heads in the sand. Real Estate, like any other investment, should go up and down if its price is not being manipulated. For the longest time, Real Estate has continued to go up, up, up. Its unnatural. Nothing defies the laws of gravity: what goes up eventually must come back down. But right now we are pulling out all the stops to make sure that the price keeps going higher and higher. In essence, we are going to make sure the scam does not fall apart. The guys in charge still see "falling home prices" as the problem, instead of the real problem: giving loans to people who are not financially stable enough to have them.

I think we'll be revisiting this issue sometime again in the next few years. We have solved nothing here today because we have failed to learn from the mistakes of the past and are therefore condemned to repeat them, but we sure have cost alot of investors alot of money.

This is one big event, It looks like right now Asia sees this as a positive turn of events, as well as the dollar.  However, in the US we wont know until tomorrow morning - and im sure we will all be watch.  One thing I ask myself though, why would anyone want to have been a shareholder of either of these companies unless it was for pure speculation?  I was thinking about speculating in both companies, but didn't see it as a worthy investment. I feel bad for the shareholders, but