FNMA common stock surged to $5.00 today. I point you to yesterday’s blog about the strength in this company’s stock and the possibility of eventual “privatization.”
This is a quick follow-up: David Faber mentioned today on CNBC that Bruce Berkowitz, hedge fund manager made famous by his huge investment in “brain dead” AIG before its ultimate 4,000% rebound, is “investing heavily in anything related to FNMA and Freddie Mac…common and preferred.”
This is usually not a stock investment blog, but the incredible moves in housing-related entities raises my attention. Jim Cramer may have the most logical opinion on this wildness (he can make sense once in awhile). Because of the capital structure of these companies, he avers, if you are going to be in them, the preferred has to be worth more than FNMA common stock. But that is an analysis of value, and now that so many people have caught hold of the FNMA common stock move, expect nothing but crazy volatility in this for the near future.