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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.
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