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Stay Away from Fannie Mae

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20% swings don't bode well for loan giant.

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I've gotta tell ya, Neal Page gots NOTHIN on me! In addition to the last minute cancel last night, less than thrilling overnight accommodations (yes, American Airlines (LCC) paid), further delays this morning ("Sorry folks, we gotta go back to the gate as they loaded the baggage in the wrong way."), circling Newark ten times before landing, two hours (count 'em) to get back to the city, dead batteries in both my phone and computer, five missed meetings (count 'em again!) and more ketchup than a Heinz factory as I settle in just in time to prep for tonight's FBN Happy Show and tomorrow morning's Yahoo! TechTicker, I'm left to ask... Are you serious?

Now that I've (sorta, kinda, not really) vented, here's my top-line vibes as I look at screens for the first time in two days:

  • That sudden slippage you're seeing is a function of stop losses on the other side of S&P 1405. Remember, in the absence of clarity, technical perception is reality. A lotta folks were using that as a bovine backstop.

  • My positions? Missionary, in The World According to Airlines.

  • In terms of tape? Consistent with what they were prior to my Texas two-step. I'm still long the papers (I pared Gannett (GCI) above $30 as a discipline and nibbled anew on McClatchey (MNI) as a hat size) against gamma, or puts, in select financials (Merrill (MER)) and drillers (Schlumberger (SLB)). It's not huge (I don't like blind risk) but that's the gist of the twist.

  • It's tough to view 20% swings in Fannie Mae (FNM) as a positive, and I'll say this: Without watching the stock the last two days, my conviction that it's a train wreck waiting to happen continues to mount. Alas, timing is everything (it's still on my personal restricted list).

  • Volatility. The VXO is up 11%! The VXO is up 11%! All the way to... 19? Yeesh, ewww, yuk.

  • Humility. There was a time when I couldn't go to the bathroom without having mas concern about content in the 'Ville. As I review the dew on the Buzz and the home page, I felt a profound sense of gratitude for all the good folks who have adopted this mission, as well as all of you who continue to support it. A dream, as they say, is only as powerful as those who believe in it.

  • As always, I hope this finds you well. Watch S&P 1405 on the close, yo. Everyone else is.

    R.P.
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Position in GCI, MNI, MER, SLB.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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