I got some email asking me if it was time to cover shorts on Fannie and Freddie.
Disclaimer: I never told anybody to short them in the first place! I do not give specific advice or trading strategy in this forum. That said...
"Never underestimate the other guy's stupidity!!!"
These "guys", our federal politicians and regulators, operate in a framework of: React under pressure, compromise to get something done, then empower the incompetent appointee or mean spirited regulator to repair an intractable problem thereby creating an entire new set of problems to be "addressed" in the future, react under pressure, etc.... repeat ad nauseum.
You don't know if a bailout is coming or what the format is...
Of course, they could both plummet to ZERO at any time. However, it is all about the risk/reward ratio.
How's that for non committal, wishy-washy, mealy mouthed B.S.? Maybe I should go back to New York and work on Wall Street as a "Strategist"... whatever the hell that is.
Finally, if I write that I think something is going to blow up, don't take that as investment or trading advice. I have been known (just ask the Mad Scientist) to change my mind several times, going long and then short, sometimes several times per day. For example, I missed the trade on Freddie friday, but I might have gone long for a couple of ours when the squeeze showed up had I been paying attention.
And if you are not the kind of person that can admit a mistake QUICKLY, you have no business trading. It is easy to be on a winning trade. Anybody can take a quick profit. Can you take a quick loss? If not, Rambo, don't trade.
Good luck!
Mentatt (at) yahoo (d0t) com
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