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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (29045)	11/20/2007 4:12:35 PM
From: Madharry	Respond to of 78753

i dont understand why freddie is losing money. i thought they had a franchise to print money if you will. can someone explain what happened to me? the sharp declines in freddie and fannie mae scared me into raising a little cash where i could. so this is probably a bottom. i sold the yahoo shares for a tiny profit and sold some more BPZ so for now i just have a small position remaining there.

To: Paul Senior who wrote (29045)	11/21/2007 1:19:56 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78753

FRE - not surprised they are having difficulties. FRE equity is 25B$ (17B$ in common and about 8B$ in preferred) and their mortgage portfolio is 790B$ plus they insured a total of 1600B$ in mortgages against default. Obviously with such a leverage, even a small change in fair value will wipe out a lot of equity. I am not exactly sure how large the losses are. The headline number is 2B$ for the last quarter but there is also mention of 8B$ change in fair value of the mortgage holding. Those are obviously non-realized losses but if they market to market they would have to show those also. However, how do you market to market when you are the market (together with FNM).

To: Paul Senior who wrote (29045)	11/21/2007 11:34:13 AM
From: Madharry	Read Replies (2) \| Respond to of 78753

cfc dropped below 9 today and is now trying to rally above it. In my mind there will be a federal bailout for the mortgage problem. there was too much leverage in the system and its bearing rotten fruit. I wonder how much more tax lossing and window dressing we will see as funds try to escape the cfc contagion. I expect to see a price of 6-8 on cfc before the end of the year. I also see the fed cutting rates in december. My portfolio keeps getting smacked around daily. In retrospect would have been way better off to liquidate my portfolio when someone suggested it.