Einstein said, “The strongest force in the universe is compound interest.”
I wish I could ask him how strong Wall Street’s compound ignorance is. Today Wall Street thought Fannie Mae and Freddie Mac were going bust. On a statement from FED Sec. Hank Paulson essentially saying there will be no change to the GSE’s; Fannie and Freddie, the equity markets tumbled. If one is allowed to clarify Paulson’s comments it would look like this; “There is no change in GSE status”.
The laughing stock of the world also known as Wall Street or “No Talent Ass Clowns” did it again. Rumors running around the pits and through below average IQ’s and over-leveraged investment banks screamed to sell Freddie Mac and Fannie Mae like an over sized SUV during $5 gasoline in the US. Despite Paulson’s bullish comments equities tumbled even more before recovering.
To recap: Paulson’s comments are bullish because the FED is not injecting capital into the GSE’s which means they are adequately capitalized! I’m done ranting. My blood pressure is at dangerous levels.
Here is a good article explaining what is really going on. http://www.bloomberg.com/apps/news?pid=20601103&sid=aIePshn7LFOM&refer=news
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