MTG,FNM earnings are out. After reading the press release, the only word that comes to mind is horrendous.Will you be doing a post dissecting their earning seeing that it is your forte?Thankspenn
There may be later today. It is horrendous and you can see loss recognition lags behind FRE. Just put the earnings on top of each other and you can see the lag of 1 quarter. I am thinking it is not entirely wrong to speculate long FRE or long FRE/short FNM swap right here.
ok, thanks. I will wait for the post if there is one. As per your analysis, FNM earnings lag FRE by 1 quarter. I do not understand the Long FRE/Short FNM swap. Do you like the long FRE trade since you expect FRE to beat expectations? If yes, why short FNM now since if FRE beats expectations, then per the 1 quarter lag, FNM will beat next quarter
Because I like "neutral" trade more than directionality when things move +/- 10% like these two on any given news. I am thinking the spread is 28.09 - 24.60 = 3.50 may be worth my while. If that inverts -> decent $ for very manageable risk. (will it widen to RECORD $4?, if so just sit it out and wait for it to come back).
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