Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Two Ways: Freddie Fumbles Four Decades of Profits


Strengthen your portfolio in good times and bad.

Shares of Freddie Mac (FRE) were halted after the close today, when the government-backed lender reported a loss of $23.9 billion for its fourth quarter. In addition, the company said it will need another $30.8 billion capital injection from the US Treasury.

According to the Wall Street Journal, Freddie lost a total of $50.1 billion in 2008, as compared to a loss of $3.1 billion last year. These 2 years of losses exceed earnings of the last 4 decades combined, from 1971 till now.

Rising defaults -- and the decline in the derivative instruments used to hedge against interest rates -- were largely to blame. This follows last month's Fannie Mae (FNM) loss of $25.2 billion. To date, Treasury has agreed to backstop the 2 companies with as much as $200 billion each.

For other trading ideas, see Professor Homes Osborne's Unbreakable China.

From the Bull Pen: As Professor Osborne mentioned, bulls can look to Freeport McMoRan (FCX) to the upside. We talked about the technical picture and it's breakout above $30. But passive investors can still consider playing this with a sell stop below that level.

From the Bear Cave: Bears can still consider the bearish dollar ETF (UDN). Take a look at the dollar index (DXY): It may have room to the low 80's.
< Previous
  • 1
Next >
No positions in stocks mentioned.

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.

Featured Videos