GSEs: Too Big to Survive

[Strom_IHB]

Interesting article on FRE and FNM.



<a href="http://www.financialsense.com/fsu/editorials/delta/2008/0828.html">http://www.financialsense.com/fsu/editorials/delta/2008/0828.html</a>

 

[Trooper_IHB]

For the life of me, I cannot understand why these two have popped this week. Or any financial for that matter.

 

[awgee_IHB]

[quote author="Trooper" date=1220026269]For the life of me, I cannot understand why these two have popped this week. Or any financial for that matter.</blockquote>


If the Treasury Dept. takes over the agencies, the stock becomes worthless, and the stock was reflecting people's attitude on that probability. Within the last couple days, Lehman and maybe some other organization has said they did not think a takeover was necessary and the stock is reflecting that sentiment.

 

[no_vaseline_IHB]

It's a call option on a worthless pseudoGSE that is preparing to become a full blown GSE.