which can be created from 100% positively correlated asset classes, when LAG in time is involved.
Enjoy this simple but often confusing mathematical concept most economists/anal-ysts don't understand or purposely omit from their discussions.
The right enemy
12 years ago
5 comments:
My FRE guru, I read that you had another change of heart regarding this "eventually" dead company.
On TF, you are actually expounding going long this POS and calling it the "Trade of the Year"
Can you please give some details. Think this deserves of whole post of its own
Actually there are several 'bailout' plays here:
1.) New Fed regulatory structure formed (http://www.nakedcapitalism.com/2008/07/fed-agreement-is-very-bad-news-for.html)
2.) On-going disaster planning for FRE/FNM (http://www.nakedcapitalism.com/2008/07/disaster-planning-for-freddie-and.html)
3.) The 300B housing bill.
That's patriotic, all that red, white, and blue means we independently blow up...right?
:)
I am not a guru at all. Just an observer. An I missed the entire FRE drop this time (and probably for the LAST time, ever)
Historically, ABK proved that it could rally 200% in a matter of days back in January (?), so if FRE goes to $21-24 here it is not entirely unheard of.
Housing bailout can be the catalyst. Gov't money injection to common stock is another. Loosening capital requirement is in the works. And CNBC has been watching FRE and FNM and was slow to comprehend that to PUMP the market they need to first pump FRE and FNM. So the secret sauce is up, but I just don't see anybody lifting a finger yet.
On the negative side, please observe that as of lunch time, about 125 million FRE shares are exchanged today. NOT a good sign.
I do not think this is the end for FRE. The current move is like what CFC experienced around August bottom. After that CFC bounced, had all kind of capital injection from BAC and then finally went away many months later.
Also check the CFC volume around August 15th.
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