Freddie & Fannie: Double Trouble

Jul 14, 2008: 11:48 AM CST

Adam Hewison of Market Club recently released a brief educational video that details the fall in these stocks and what it might mean for the larger picture in his video released today entitled, “Freddie Mac and Fannie Mae:  Twin Disasters.”

Hewison states in a post accompanying the video:

“Even after Treasury Secretary Henry Paulson made a statement ensuring that Fannie Mae and Freddie Mac would remain as presently constituted to carry out their mission it was not enough to satisfy most investors.

Both Fannie Mae and Freddie Mac hold about $5 trillion worth of mortgage guarantees in this country, roughly about half of the $9.5 trillion mortgage debt. Their survival is paramount.

The trouble with these two companies is the latest depressing factor in the current credit and confidence crisis that the United States is going through at the present time. This type of negative information is depressing for stocks and weighs on the minds of investors. This type of mindset is similar to the
early seventies when we witnessed the last prolonged bear market.

There are no quick fixes to our current set of problems, only trading opportunities.

We live in a capitalist society and these are the cycles that we go through every 30 to 40 years. This is the price we pay for living in a free society.

My new eight minute video shows in detail how easy it is to avoid disaster stocks like Freddie and Fannie. I also show you in very clear terms how to fortress your portfolio to withstand any type of financial tornado that blows through the world economy.”

Freddie Mac and Fannie Mae:  Twin Disasters

Enjoy the video,
Adam Hewison

Hewison reminds us that it’s our job to understand what’s happening and attempt to profit from it in a risk-controlled environment.  Recall that stocks fall (sometimes plunge) faster than they rise, meaning those who employ short-selling or put buying strategies can profit relatively quickly from early identification of stock or company break-downs.

Such strategies themselves are not without risk, as news of salvation or other reports could trigger an instant wave of ‘short-covering,’ leaving such positions vulnerable.  Be safe on both sides of the market and adhere to your risk-control parameters.

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