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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Real Man who wrote (373208)8/22/2008 12:01:40 PM
From: NucTrader  Read Replies (2) of 436258
 
My sister-in-law has her entire IRA in FRE and FNM bonds (she entered them in 2003). Paid 100.0 basis points for the FNM which were trading at 94.06 or so yesterday. Paid 95.98 for the FRE which were quoted yesterday at 96.04. One was yielding 5.30%, the other 5.91% at yesterday's prices. Her broker said she'd be OK in the bonds. My advice? Beat the panic sale on FNM and FRE debt, sell 'em and move the funds to an FDIC insured CD. Currently the Fed has no plan in place to deal with FNM and FRE going bust. They're asking MS to do one, although they're unwilling to let MS look at the full books of FNM and FRE. If the Fed jawbones a little when FNM and FRE stockholders get taken out entirely and injects a little "unknown" into the debt rescue plan, OR just drags their feet, which will have the same effect, guess what happen? There's a panic bond sale, which enables the Fed to "rescue" the debt holders on the cheap.
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