“Freddie Mac” — aka the Federal Home Loan Mortgage Corporation (FHLMC), a government-sponsored enterprise (GSE) that trades on the New York Stock Exchange — closed at $8 a share on Thursday. This morning, it opened at $4.26 a share and fell to an intra-day low of $3.89. Then Ben Bernanke made it known that the Fed would “lend” money to Freddie and its sister Fannie Mae, and the stock rebounded to close at $7.75.
Big deal, you say?
Consider this: The swing from $3.89 to $7.75 represents $2.5 billion in market capitalization (company value). All based on a few words from the Fed’s Fuhrer.
Oh, and Fannie Mae (the Federal National Mortgage Association)? Its one day swing from $6.68 to $10.25 represented even more money, nearly $3.5 billion.
Today, billions of dollars were lost by investors who finally gave in and sold these junk stocks. But they were suckers. They should have known the fascist Fed would offer to bail them out. The “smart guys” did, and they bought up the stocks and turned billions in profits.
Hmm… Do you think it’s impossible that some people knew in advance what Bernanke would say? No, the government would never do something like that for the benefit of private individuals, would it?
The system is crashing. Both Freddie and Fannie are down by more than 80% for the year.