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Should I buy or sell Fannie or Freddie stock today? It is an interesting puzzle. On the positive side, the US government is now backing the debt of these companies. On the negative side, Paulson's track record with Bear Sterns shareholders will give a pause to punters in Fannie and Freddie. This is what Paulson is saying in his news release: Their support for the housing market is particularly important as we work through the current housing correction. So far in the news release, it seems shareholder survival of the troubled entity is crucial - this is not Bear Sterns.

They want the stock to go higher and see if these two can raise money through public markets. My guess is there are - at least for one more round. After that, if there is further need, US govt will be forced to step in and nationalize.

Why Fannie Mae (FNMA) Stock & Freddie Mac (FMCC) Stock Are Worth Buying After 35% Collapse

The point is - if Paulson wants to prevent shareholders from enjoying should i sell my freddie mac stock benefits of his largesse, he needs to nationalize Fannie should i sell my freddie mac stock Freddie today. From the opening of his press release, it appears he wants these two to remain public entities owned by shareholders. I think this is like Lehman on March I dont know about the long-term future of these companies.

But the chances they double or triple in next 24 hours is high. There is a huge short interest in them, and short covering itself will propel them higher. It is a very confusing situation.

If Paulson wants to avoid moral hazard, he kontakta forex bank to extinguish current shareholders. He has done that once to Bear Sterns shareholders. Will he do the same with Fannie and Freddie shareholders?

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If these stocks stay where they are, there is no way these companies can raise the requisite equity. So the Treasury will step in, which will involve wiping out existing shareholders. Now, logic might not work and Paulson might change tracks. But I will go with logic.

The survival of existing shareholders is contingent on the stock going up.

The stock price is driving the fundamentals. I don't think I will, can or should punt. Should I Buy Fannie or Freddie Stock Today? Want to share your opinion on this article?

FMCC Stock Price - Freddie Mac Stock Quote (U.S.: OTC) - MarketWatch

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