This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Fannie Mae and Freddie Mac below in the comments.

How did Federal National Mortgage Association and Federal Home Loan Mortgage Corp. (FHLMC) get their nicknames -- Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE)?

According to Fannie Mae's website, its formal name is no longer Federal National Mortgage Association. It appears that the nickname took over the formal name. The reason? To "eliminate confusion among investors and consumers alike regarding various names in use for Fannie Mae." As a result, on January 6, 1997, Fannie Mae's stock started being listed under the name Fannie Mae rather than Federal National Mortgage Association.

Slate gets the award for offering an explanation of the source of the nicknames. I cannot improve on its explanation, which is as follows: "FNMA got its moniker because of its acronym; when you try to pronounce it as a word, it comes out sounding something like 'Fannie Mae.' When it came time to nickname the competitor, however, FHLMC didn't naturally sound like a recognizable name. 'Freddie,' then, is a take on 'federal,' and 'Mac a reference to the terminal 'MC.'"

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Talk about an interesting day for E*Trade (NASDAQ: ETFC). The broker, a competitor of TD Ameritrade (NASDAQ: AMTD) and Charles Schwab (NASDAQ: SCHW), reported Q2 earnings on Tuesday after the market closed. E*Trade saw its stock close up on the day by almost 11% on better-than-average volume ahead of the press release. Then, after hours, the stock was down over 15% as investors digested the data. It was a wild ride indeed, and I'm glad I wasn't on it.

E*Trade saw its total net revenue decrease by 20% to around $532 million. The loss per share came in at 19 cents. According to this Reuters article, Wall Street was hoping the loss would only be 14 cents per share.

E*Trade isn't out of the woods yet, and I think it'll be a while before it fully turns itself around and recovers from the financial crisis it's been suffering. In fact, the release mentioned how the broker lost value on investments in preferred equities of Federal National Mortgage Association (NYSE: FNM) and Federal Home Loan Mortgage (NYSE: FRE) in July and that the liquidation of the investments will impact the third quarter. Yeah, I'm sure shareholders of E*Trade love to hear the names Fannie Mae and Freddie Mac thrown around in the earnings report. They're sure to warm the heart.

At one time, I thought E*Trade was worth entering, and it obviously might have been worth trading ahead of the earnings (if you were quick to get out before the after-hours, that is). Now, however, I'm reticent to put any new money to work in the financial sector. It's going to be a while before the financial malaise finally lifts. Since E*Trade is still losing a lot of money and missing estimates, I see no reason to allocate any investment funds here. The stock has become too speculative, and if you want to speculate, I'm sure you can find safer sectors to place some bets.

Disclosure: I don't own any company mentioned; positions can change at any time.