Fannie Mae…The Magic Act

  • Posted by
  • on August 15th, 2007

As homebuilders implode, mortgage companies lock their doors and banks write down assets they have no idea how to value, Fannie Mae stands tall.

For those that don’t believe in financial magic, you have never shorted this stock.

The freaking beast is a miracle. The problem is, this time it does not matter. Countrywide, Beazer Homes, Thorburg, New Century, Goldman and Lehman matter.

I think the Fed is holding up the wrong stock and looking at the wrong ‘tells’. While they are busy holding up Fannie Mae, everything else collapses. They are plunge protecting the wrong goddamn stock.

Idiots.

Don’t get me wrong, they were idiots on the way up and it’s why I trend follow. How can you make money gaming idiots. You become Cramer trying to game them. Good for ratings, bad for your investment portfolio.

I believe the markets should be pretty much left alone and that as Doug Kass so perfectly wote today:

Our financial system is like an alcoholic who has had too much to drink — the solution is not to serve up another round of drinks but rather to close the bar.

Time for the grown-ups to take some lumps if you ask me. Freaking 95 percent of stockbrokers, mortgage brokers and real estate agents are as useful as a turd. I know, I was one (stockbroker) :) . Time to be let go and work for a living.

By the way, Fannie is going to implode big time. I am not trading it, just watching it and thinking that we are not nearing a bottom until we see Fannie down 10 plus points on the open.

Hope I am wrong for those that have no clue.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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