Freddie Mac-No Politics (FMCC)

[BennySlots]

You keep using that term, pump and dump, but I don't think you understand how those really work. So let me explain.

A pump and dump is when some small group of people find a stock that's barely traded and load up a bunch of shares first. Then they send out emails, and post on blogs, etc. and drive up interest. Then over a few days as interest grows they sell off their cheap shares, bail, and move onto their next target.

Freddie and Fannie aren't like that. They're not some business with a terrible idea and no money, or a "development stage" shell company, etc. They pull in billions of dollars. The only reason they're down in the dumps here with stocks like that is because of their situation with the govt.

Moreover, this stock wasn't preloaded by some group to dump on rubes for a few days. Millions of dollars trade every day and it's been steadily growing in price for several months now. That's not how pump and dumps work.

Why the big spike in price? And why the crash you may ask? Simple. The market makers that run this stock trade using a computer algorithm. In case you weren't aware, the market makers buy and sell these stocks too. That's how they make the market. So, just like us average people, they want to make money too. Anyway, the algorithm running this seems to have a pattern:

1. Let the price spike way up (They stop selling and buy too)
2. Spike the price back down (They stop buying and sell/short)
3. Shake people out up and down until it settle back into a flat line
4. Repeat

You can see this pattern over and over with this stock. But now that it's getting more attention and money, the movements are larger. But you can see the smaller spikes, drops, and flat lines if you look back at the chart over the past years.

Well, I hope that helped clear things up