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"Capitulation" In Progress: FNM & FRE To $12/share,
only the fools expect a selloff because they missed the boat! under the current economic indicators and new stimulus, the GSE's are set to move up the ladder to around $10 to $12 a share...now in the control of FHFA, GSE's are now stabilized and will only be traded to an exit point of an expected release from the "conservatorship".
shortage of shares and a massive short cover will rock these companies next few weeks guaranteed and Wall Street already knows it!
If you don't know what the new stimulus is going to do, and if you don't realize that the GSE's were originally ordained by the Democrats to begin with, then there is no way to convince you other than to just let you watch and learn, that Fannie and Freddie are going to be the biggest benchmark "Capitulation" Stocks ever!
another thing that is going to cause a major move up in Freddie and Fannie both is that they only lose money if the current loan payers do not pay for 90 days. With the new order to "stop Foreclosures on currently occupied homes" then they will have no Payouts and will thus post earnings to their balance sheets. couple that with the fact that Treasury is buying their direct debt, and not issuing Warrants, will cause a very big upside potential to fall in around $12 a share.
We may wake up one morning next week and see the trading gap up to well over $5 above where it was currently trading the day before just because people start to realize that both of the GSE or GOO companies are only on the UPSIDE of potential prosperity
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