*SCALPSWINGSTRADDLE*

[mikeg]

Freddie Mac Reports Positive Income?
David Urani, Research Analyst

It seems impossible, but before preferred stock dividends, Freddie Mac in fact reported $768.0 million of profit versus a $9.9 billion loss last quarter; the stock is up more than 80.0% today as a result. Unfortunately, the result can't be taken at face value seeing as the gain was almost entirely the result of changes in mark-to-market accounting rules that drastically reduced credit expenses and increased asset values. Otherwise, delinquency rates on mortgages are still rising, albeit at a slower rate. Nevertheless, the good news is the that company will not have to ask the government for more money this quarter, taking away some probability that it will eventually be taken over by the government (although we still wouldn't rule it out due to political reasons).