Fannie Mae (NYSE: FNM) closed at $1.86. FNM option volume was active on August 25 with 173,103 contracts trading. FNM overall option implied volatility is at 151.

Freddie Mac (NYSE: FRE) closed at $2.06. FRE option volume was active on August 25 with 53,469 contracts trading. FRE overall option implied volatility of 139 is near its four-month average of 138, according to Track Data.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Options Update: Fannie Mae and Freddie Mac volume and volatility suggests movement originally appeared on BloggingStocks on Wed, 26 Aug 2009 08:00:00 EST. Please see our terms for use of feeds.

Did you hear? Mortgage rates are surging. That should be no surprise. All we had to do was look at the sharp sell off in US treasuries and you know that mortgage rates would follow suit. The 30 year fixed rate mortgage rate jumped to 5.29%, up from 4.91% just a week ago. On April 2nd the rate was 4.78%.

Just to give you an example in real dollar terms, let's take a $200,000 30 year fixed mortgage at 5.29%. Your monthly payment would be $1109.37 and your 30 payments would be $399,372.25. At 4.91% your monthly payment would be 1062.67 and your 30 payments would be $382,560. So in real dollar terms your cost has risen $16,812.00. In addition lenders are charging 0.7% in fees and points, unchanged from the previous week.

Continue reading US mortgage rates rise sharply

US mortgage rates rise sharply originally appeared on BloggingStocks on Thu, 04 Jun 2009 15:40:00 EST. Please see our terms for use of feeds.

Continue reading Freddie Mac's earnings fall as delinquencies increase

Freddie Mac's earnings fall as delinquencies increase originally appeared on BloggingStocks on Wed, 13 May 2009 10:40:00 EST. Please see our terms for use of feeds.

Continue reading Doomsday Scenario: 80% home default spike in CA, Freddie Mac CFO suicide

Doomsday Scenario: 80% home default spike in CA, Freddie Mac CFO suicide originally appeared on BloggingStocks on Wed, 22 Apr 2009 17:30:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Directionless market, but directed stocks (BA, CAL, COF, FRE, WFC, OSTK)

Closing Bell: Directionless market, but directed stocks (BA, CAL, COF, FRE, WFC, OSTK) originally appeared on BloggingStocks on Wed, 22 Apr 2009 16:15:00 EST. Please see our terms for use of feeds.

Continue reading Freddie Mac CFO found dead in apparent suicide

Freddie Mac CFO found dead in apparent suicide originally appeared on BloggingStocks on Wed, 22 Apr 2009 10:10:00 EST. Please see our terms for use of feeds.

According to a report today in The Wall Street Journal [subscription required], Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) -- those twin titans of mortgage mayhem -- are planning to dish out $210 million worth of retention bonuses over the next 18 months. James Lockhart, director of the Federal Housing Finance Agency, explained that $51 million in payouts were distributed in late 2008, with the rest of the bonuses to be disbursed through 2009 and into early 2010.

The news is already raising politicians' ire, since Fannie and Freddie are staying afloat only through the grace of government bailouts. The two lenders reported combined losses of roughly $108 billion in 2008, says the Journal, yet 80% of Freddie's employees and 61% of Fannie's payroll will score retention bonuses based on this bleak operating performance.

Continue reading Fannie Mae, Freddie Mac planning massive retention bonuses

Fannie Mae, Freddie Mac planning massive retention bonuses originally appeared on BloggingStocks on Fri, 03 Apr 2009 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Fannie Mae next in line to hand out questionable bonuses

Fannie Mae next in line to hand out questionable bonuses originally appeared on BloggingStocks on Thu, 19 Mar 2009 08:00:00 EST. Please see our terms for use of feeds.

There is an old saying: "never fight the Fed." If you had been short this bond market, you probably could be wiped out in one afternoon. When the Federal Reserve made its announcement a short time ago that they were buying long term securities the futures on the long bond jumped 4.25 basis points, or more that $4000.00 on just one contract. If you were long say 10 contracts you would be sitting on a $40,000 profit this afternoon.

Continue reading Federal Reserve buys bonds

Federal Reserve buys bonds originally appeared on BloggingStocks on Wed, 18 Mar 2009 17:40:00 EST. Please see our terms for use of feeds.

I lump these zombies -- our first zombies -- together because everyone else does.

You and I are now the proud owner of these lifeless monsters, which have hundreds of billions of dollars in obligations on mortgages of declining quality.

What's more, for political reasons, their future will not be resolved for several years.

True shareholder value: zero

Michael Shulman is a contributor to OptionsZone.com.

Portfolio Killer #4: Fannie Mae and Freddie Mac originally appeared on BloggingStocks on Sat, 14 Mar 2009 15:45:00 EST. Please see our terms for use of feeds.

Just change the names to Freddie and the US Treasury. Freddie is broke again. and wants another $30 billion from the US Treasury."Look I only lost $23 billion this time." From what has occurred in the past ,this is a sure bet.

Continue reading Freddie Mac wants another $30 billion from government

Freddie Mac wants another $30 billion from government originally appeared on BloggingStocks on Thu, 12 Mar 2009 14:51:00 EST. Please see our terms for use of feeds.

Continue reading Freddie Mac CEO calls it quits after a few months

Freddie Mac CEO calls it quits after a few months originally appeared on BloggingStocks on Mon, 02 Mar 2009 12:00:00 EST. Please see our terms for use of feeds.

This port was written by Minyanville contributor Minyan Peter.

Continue reading What will nationalization mean?

What will nationalization mean? originally appeared on BloggingStocks on Thu, 19 Feb 2009 14:51:00 EST. Please see our terms for use of feeds.

In 2008, the average stock on the S&P 500 lost 38.5%. John Paulson, no relation to the former Treasury Secretary who is famous for making billions shorting sub prime mortgages in 2007, made almost exactly the same percentage increase as the S&P 500 lost. So in some sense, if you're wondering what happened to your money, ask John. He's got it.

Exactly how well did Paulson do and how did he do it? Paulson Advantage Plus, his largest fund with $7 billion in assets, returned 37.6% net of fees for 2008 -- this means that his pre-fee returns probably topped 40%. Paulson again bet right about the collapse of financial institutions. In early 2008, Paulson shorted Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) -- betting that they'd become insolvent or need to raise additional capital that would dilute shareholders.

Continue reading Wonder where your money went last year? John Paulson took it

Wonder where your money went last year? John Paulson took it originally appeared on BloggingStocks on Fri, 30 Jan 2009 18:45:00 EST. Please see our terms for use of feeds.

Continue reading Picking the right bond fund to stash your cache and grow it safely

Picking the right bond fund to stash your cache and grow it safely originally appeared on BloggingStocks on Mon, 12 Jan 2009 13:01:00 EST. Please see our terms for use of feeds.

Last Friday the Fed announced a $200 billion dollar program for buying toxic assets from banks to help them stay afloat. Yesterday the New York Federal Reserve Bank started a new $500 billion dollar program for buying toxic securities from Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM)

Since Friday the yield on 30 year agency mortgage securities dropped from 208 basis points over Treasuries down to 190 basis points. This has had the effect of lowering mortgage rates. The rate on a 30 year fixed mortgage has dropped to 5.3% from 6% last November.

The Fed is using four firms to conduct these transactions. They are: BlackRock (NYSE: BLK), Goldman Sachs (NYSE: GS), Pimco and Wellington Management.

As was stated previously, the Fed has not disclosed the details of any of these repurchase programs. They are saying that they will be doing this "as the need arises."

A dramatic effect of this new Fed action is the sharp drop in US Treasuries, which today are down another 217 basis points on the 30 year March futures contract. Since last Wednesday the March 30 year bond futures contract has dropped from 141 down to 133 for a drop of about 800 basis points or $8,000.

I guess we can assume from all of this that Freddie Mac, Fannie Mae and the banks are in much deeper trouble than the Fed led us to believe last November. The Fed is not calling these bailouts any longer. They are just going ahead with these massive programs, programs that, by and large, investors and the public are not aware of.

What are your thoughts on these programs?

The devil in the details: Fed doesn't disclose repurchase facts originally appeared on BloggingStocks on Tue, 06 Jan 2009 17:00:00 EST. Please see our terms for use of feeds.

July 14 -- Dow 11,055 (down 45 points); trading range, 327 points

The third-largest bank failure in U.S. history made headlines after IndyMac Bancorp collapsed following a run on the bank.

An FDIC takeover of IndyMac attempted to keep operations as normal as possible, but doubts began to arise about other troubled regionals like Washington Mutual (later sold to JPMorgan Chase) and National City (now a part of PNC Financial after an October "take-under," where the company was purchased at a discount to its stock value).

But wait, there's more. After years of financial shenanigans and controversy, Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) were placed into conservatorship in a federal takeover of the government sponsored enterprises. This contributed to another slaughter in the financials, with 96% of the sector posting a loss for the session.

Oh, and if you wanted to drown your sorrows over an American-owned brew, scratch Budweiser off your list. Anheuser-Busch agreed to merge with Belgium's InBev for $70 a share, or $52 billion.

Greg Tucker is the executive editor of OptionsZone.com.

10 craziest days on Wall Street in 2008: #10 Saving our Fannie (and Freddie) originally appeared on BloggingStocks on Sat, 03 Jan 2009 10:00:00 EST. Please see our terms for use of feeds.

This shorting strategy defied all odds and pretty much defined the year for the stock market.

I don't know anyone who truly thought Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) would both be trading under a buck as 2008 came to close.

The idea of these once-in-a-class-by-themselves quasi-government entities that touch more than 85% of all mortgages in the United States going into full receivership by the government was considered foolish, almost ludicrous discussion that only invited serious sarcasm from professional Fannie and Freddie watchers.

The ultimate collapse of both stocks was devastating, not only to investors that continued to believe all the false headlines spewing from the front offices of FNM and FRE that said they were more than amply capitalized, but the whole financial sector as well.

The notion that Freddie and Fannie were too big to fail was a given, sucking in long-side investors at every 10-point interval on the way down to zero.

Continue reading Best Trades of 2008: #5 Shorting 'too big to fail' Fannie and Freddie

Best Trades of 2008: #5 Shorting 'too big to fail' Fannie and Freddie originally appeared on BloggingStocks on Wed, 31 Dec 2008 15:00:00 EST. Please see our terms for use of feeds.

For most investors and traders, 2008 was a tough year. But while many people saw their portfolio take a merciless beating and watched their retirement vanish into thin air, there were a select few who made a killing.

In fact, if you had been on the right side of any of these bets, you could have banked enough dough to make up for your losses and then some.

Here are five trades everyone wishes they had made in 2008:

#1 Shorting 'Chindia' the day after New Year's: The Chindia experience peaked in Beijing with Michael Phelps, and the market knew it would a year and a day before the Closing Ceremonies.

#2 Getting long and staying long the 30-year Treasury bond: This strategy went from being a modestly successful trade through October to a hero-sized trade in the past 45 days.

#3 Shorting oil on the Fourth of July: The drop in oil prices has been nothing short of unbelievable. Those that had the fortitude to short crude in early July (and had the stones to stay with that trade) made a killing.

#4 Buying DryShips (DRYS) at the November low: Following its meteoric rise to $116, the stock careened all the way down to $3. But if you went long then, you saw the share price quadruple in less than a month.

#5 Shorting 'too big to fail' Fannie and Freddie: This shorting strategy defied all odds and pretty much defined the year for the stock market.

Best Trades of 2008: 5 moves that could have made you rich originally appeared on BloggingStocks on Wed, 31 Dec 2008 09:00:00 EST. Please see our terms for use of feeds.

Freddie Mac (NYSE: FRE) said today that it received a notice from the New York Stock Exchange (NYSE), warning that the mortgage firm could be delisted due to its rock-bottom share price. FRE has been trading below $1 for more than 30 days now, and must notify the exchange by December 2 whether it intends to rectify the problem.

If Freddie does decide to meet the NYSE's listing requirements, it will have until mid-May to address the share-price issue; if not, its common stock and preferred stock are subject to suspension and delisting. In a statement, Freddie Mac said it's "currently working with its conservator, the Federal Housing Finance Agency, to explore options relating to this deficiency and has not yet determined its response."

Earlier this week, Freddie's sister Fannie Mae (NYSE: FNM) received an identical warning from the NYSE. The troubled siblings hit the headlines for somewhat more respectable reasons earlier this morning, when the pair announced they would temporarily halt foreclosures during the holiday season.

After opening broadly higher this morning, FRE has fallen to a 6% loss at 46 cents per share. Sibling Fannie is faring better today; that stock is up roughly 9% at last check -- though today's gain takes the per-share price only as high as 36 cents.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

Freddie Mac warned of possible delisting by NYSE originally appeared on BloggingStocks on Fri, 21 Nov 2008 12:40:00 EST. Please see our terms for use of feeds.