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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (42661)	9/29/2005 11:28:40 PM
From: ild	Respond to of 110194

"Several firms are commenting on the Dow Jones report that new accounting issues have surfaced at Fannie Mae. JP Morgan says the new issues are likely to be very small ... Maintains Overweight ... Bear Stearns views Wednesday's selling as yet another wave of capitulation by frustrated investors. The question is: could this be the last significant decline ... Maintains Outperform." ---(Briefing.com - September 29, 2005) Schaeffer's addendum: This is what I refer to as "death spiral talk" from Wall Street. It occurred most of the way down for such illustrious names as Enron and WorldCom and also for names such as AOL Time Warner and Lucent Technologies, which did not disappear off the face of the earth, but suffered devastating declines from their peaks. Death spiral talk occurs because of an extreme reluctance on the part of Wall Street to recognize its high-profile mistakes until it is way too late, due in major part to the "value trap" of fundamental analysis by which the more a stock declines in price the better its perceived "value." In Fannie Mae (FNM: sentiment, chart, options), we have a stock that is down by more than 50 percent from its peak of six years ago, yet the majority of Wall Street analysts still rate it a "buy." I have no idea if Fannie is near a major bottom or if it will totally implode. But I do know that it is rarely a good idea to buy weakness on the slippery "slope of hope." Bernie Schaeffer