Market uptick not worth price of Fannie & Freddie bailout

The Fannie Mae and Freddie Mac bailout by the U.S. government feels like a trade with the devil.

That’s why I held-off posting a message yesterday on news of the U.S. government takeover of these two giants, as I didn’t want to be a downer on what I knew would surely be a rally in both foreign and domestic markets.

For the record, with futures up this morning, I won’t be a bit surprised if the rally continues into today.

However, I am standing back and taking a look instead at Bank of America and even Wells Fargo.

I’m not saying I’ll definitely be pulling the trigger on either of those names, but I’ll definitely be doing further due diligence.

While I realize many homeowners and Wall Streeters may momentarily be pleased with the bailout of these two giants, I caution everyone that the jobs numbers haven’t been good and the economy is still weak — and I’m not sure if the current regime pushing us further towards a socialistic society was worth a momentary up-tick in the markets.

While this takeover was likely done to keep mortgage rates low, the government should break-up these giants into a dozen pieces and spin them off into the private sector.

Right now, it just doesn’t feel good to me — and when it doesn’t feel good — I trade around it.

Just remember, don’t base any investment decisions on anything you read here; do your own due diligence, or at least enough research to hire the right professional to do it for you.

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2 Responses

  1. It really isn’t as casual as you believe.
    The USA has been destroyed from within financially.
    The movement to the “new world order” mandates that.

  2. I disagree. While anyone who reads this blog — or any of my former business blogs — is aware, my motto has always been that “this ain’t your daddy’s market anymore, baby,” based on the 24-hour news cycle and world economy that’s filled with all different kinds of traders from longs to shorts, with day traders, option traders, forex traders and varying degrees of other kinds of traders all in the game. My goal is to cut through the convolution each day and share my thoughts on where I feel the market is trending — not to provide an extensive breakdown each day — that’s part of my personal due diligence that I caution everyone to do for themselves. When you do cut through all the crap — it really is fairly simple. But just a tip to you and others — don’t expect me to take your responses too seriously when you make a quick remark with no substantiation of facts.

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