Fannie Mae-No Politics (FNMA)

[butoft]

I believe there will be a gap down tomorrow. People were questioning whether the statements were true about Obama supporting a winding down of FNMA/FMCC yesterday, and we found out today that it is true. On the other hand, what does "winding down" exactly mean? Will they be completed phased out? Will the investors get anything? Will a new entity be created, which I'm assuming the common shares would become worthless. Will they keep them and create a more limited roll? I think we still get a small run leading into and continue after earnings are released. It's so frustrating and I still think something is up considering it's way too coincidental that he brings this up in his speech today and has the speech the same week, FNMA and FMCC earnings are released. I still think it might have to do with the fear that when Q2 gets released, it's going to be more difficult to make a case for winding them down. So frustrating still though because you could tell another run was starting yesterday and he either killed it or delayed it by opening his mouth. Lets hope he just delayed it a few days and once Q2 gets released it, investors will forget the possibility of the GSE's getting wound down. I just don't see it happening anytime soon considering the impact it could have on the economy and the fact that who would support 30 year mortgages. Bottom line, if we go much below that $1.50 level it will fall hard and then bounce hard! At that point the Q2 earnings run begins. Just my opinion folks.