Dow Jones recovered over 500pts in 20 min. Fannie Mae responsible?

[Roland99]

Fannie Mae to stop collecting on mortgage-backed securities
http://www.marketwatch.com/news/story/fannie-mae-stop-collecting-mortgage-backed/story.aspx?guid=%7BB9ACBB03%2D9607%2D44FA%2D8EA4%2D110138703CA6%7D&dist=hplatest

SAN FRANCISCO (MarketWatch) -- Fannie Mae said Friday it will stop collecting the principal and interest payments on loans from institutions servicing its mortgage-backed securities in a bid to free up additional liquidity for these institutions. The move comes in line with the Federal Deposit Insurance Corporation's new policy which effectively safeguards these principal and interest payments. End of Story

[hedgehog]

1. Gee, do you suppose Sallie Mae will give me the same deal?

[jayfish]

6. No Doubt.

I could really use some liquidity right about now. :shrug:

Jay

[ixion]

2. monkeys still trying to game the system, apparently unaware

than each time they do it, they make it worse, ultimately.

[PM Martin]

3. The marke is ups 3.4 points as of 3:29 pm edt.

I guess Fox News will call this a huge rally and a "success" for Bush.

[Roland99]

5. +57

[FreakinDJ]

4. A couple large buys

[lib2DaBone]

7. The Presidents Working Group On Markets

The Plunge Protection Team Working Overtime today.

[dbt]

8. For real!

Wouldn't do at ALL to have another -500 day while Important Guests are meeting at the White Haus, would it?

Heave, laddies! Put yer BACKS into it!

[Roland99]

9. between 3-4pm was always a good time for them to screw the short sellers

Even read a mention of a blurb from someone on the PPT a few months back that one of their new goals was to screw short sellers.

[JDPriestly]

10. Rumor that the G-7 will guarantee overnight transactions.

This could turn around very quickly -- or not.

But, based on my very limited understanding of these things, I think that usually when the Dow goes above a previous high on the charts, it is read as a signal to buy. So the bulls could come out from the shadows. Don't take my word for it. I'm an amateur at this.

[HamdenRice]

12. You could be right on both counts

Guaranteeing overnight loans between banks is a very low cost, low risk tactic that could have very dramatic effects. That could be the cause of the turnaround, and could bring out the bulls.

[Roland99]

14. Russell2K is up 5.5%...biggest gainer.

Guess that bodes well for the smaller caps.

[HamdenRice]

11. This is interesting. This is the kind of thing you can do when you nationalize your financial system

It's important to understand exactly what Fannie is doing. It's not forgiving mortgages or anything like that. All its doing is leaving the billions of interest and principal that is paid on mbs it owns in accounts at banks that collect from homeowners.

In effect, Fannie is "depositing" money in these banks to make them stronger.

[Igel]

17. At the same time, it allows banks to

postpone foreclosure: If the principal/interest isn't due to be paid by them, then they have less of a reason to insist that it be paid to them.

We've had enough DUers post that banks/mortgage companies they work for would rather work something out, if possible, then guarantee a loss by foreclosing.

I wouldn't be surprised if there weren't some pressure behind the scenes for this. (Keep in mind that pressure and threat of regulation, not law or regulations, "encouraged" various companies to up the number of subprime loans early in the game, just as pressure and threat of regulation, not law or regulations, "encouraged" various universities with large endowments to spend more of them on tuition/fee reduction or buy-outs.)

[Roland99]

19. That was my advice over a year ago.

Have banks redo mortgages and convert people to fixed-rate on the teaser rate and adjust principal down to match house price.

Better to have steady mortgage payments (albeit lower than they would have been) than trying to sell a house in a glutted market. Besides, prior anticipated income was shot to hell when prices kept falling nationwide. Time to adjust.

[Roland99]

13. +241!!!!

My original guess on a floor of 8,300 - 8,800 still stands.

[Roland99]

15. Jesus! -149 now!!

:wtf:

[Roland99]

18. A Pump and Dump? And another Pump? +44 again.

Pump and Dumps usually occur over a two-day span.


This is just madness.

[AndyTiedye]

16. Fizzled -104 now

[dbt]

20. And now +27.79

Man, if my transmitter plate current was swinging like this, I'd be taking cover!

[Roland99]

21. U.S. stocks surge higher into the close on hopes for G7 move

U.S. stocks surge higher into the close on hopes for G7 move
http://www.marketwatch.com/news/story/us-stocks-surge-higher-close/story.aspx?guid=%7B2F91E538%2D905A%2D40FC%2D8F8F%2D7A0086C79CEA%7D&dist=hplatest

NEW YORK (MarketWatch) -- U.S. stock indexes on Friday rallied sharply on expectations that the G7 meeting now under way in Washington would result in measures to bring the intra-bank spending rate back down.

[Roland99]

22. 4:00pm - At the bell. Russell2K is ecstatic over something.

DJIA 8,503.12 -76.07 -0.89%
Nasdaq 1,642.82 -2.30 -0.14%
S&P 500 902.85 -7.07 -0.78%
Dow Util 326.53 -17.78 -5.16%
NYSE 5,715.52 -94.46 -1.63%
AMEX 1,285.44 -85.38 -6.23%
Russell 2000 521.79 +22.59 +4.53%
Semcond 246.18 -1.19 -0.48%
Gold future 859.00 -27.50 -3.10%
30-Year Bond 4.14% +0.02 +0.41%
10-Year Bond 3.86% +0.02 +0.60%


Just awaiting final settling numbers.