Freddie Mac-No Politics (FMCC)

[Ecomike]

Heads up folks! CIT just filed for bankruptcy. Good chance (IMHO) that FRE will take a hit in the morning and the rest of the market will open way down on this news as well, considering how jittery the market already is based on last week.

http://www.reuters.com/article/BANKSL/idUSN0140886320091101

Here is my thinking. TARP had put money into CIT earlier this year, but now the news says TARP will loose that money, and the government let CIT go under with out more help. CIT Common will be wiped out. So some FRE longs may get spooked tomorrow, like they have in recent weeks, and sell. And the market will most like take a huge hit down too, which will drag FRE down. I will be shopping for cheap calls tomorrow and looking to sell my $1 puts if we drop hard and fast tomorrow.

For now I will keep my longs position and play this with options.

Good luck tomorrow people!