LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines to Launch New Website

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA


GoldSeek Web

Freddie Mac Plan Incredibly Stupid

By: Rick Ackerman, Rick's Picks

-- Posted Monday, 21 July 2008 | Digg This ArticleDigg It! | Source:

Rick’s Picks

Monday, July 21, 2008

“Phenomenally accurate forecasts” 

We did a double take on the following headline atop Friday’s edition of the Wall Street Journal: “Mortgage Giant Freddie Mac Considers Major Stock Sale”. This plan gets our vote for the dumbest idea we’ve ever heard from Wall Street. A cruel joke on shareholders, perhaps? After all, the stock has already fallen 75% -- and now the same geniuses who have practically run Freddie in to the ground  are proposing to further dilute shareholder equity down to the vanishing point. What might Freddie hope to achieve via this “hyperinflationary” tactic?  The issuance of new stock totaling as much as $10 billion supposedly is being considered, but how much could it help?  Fannie’s troubled portfolio is nominally valued in the trillions of dollars, and raising another $10 billion from shareholders would be like piling up a few more sandbags after a mighty river has inundated its levees and put half the U.S. under water.

The idea is so miserably stupid, in fact, that even Congress is balking at it, fearing that taxpayers will be on the hook for yet more billions when Freddie fails anyway. Freddie’s ostensible goal is to save itself rather than be regulated to death following a government bailout. But the firm would never even have floated this idea unless the Fed and the Treasury Department were on board. That means it is probably just a red herring intended to distract us from the fact that there are no palatable options for saving the GSEs. So why did the Wall Street Journal play this non-story story so prominently, stretching the headline across three columns above the fold? Our guess is that it was a slow news day, and the Journal’s editors couldn’t come up with another story to hold up the page.

There is almost no chance this idea will get off the ground, so Freddie Mac shareholders needn’t worry about further dilution. But they should be worried that the stock is going to zero anyway.  Clearly, neither the company’s directors, nor the Federal Reserve, nor the Treasury Department, nor the U.S. government has shareholder’s interests at heart. Is there some other reason to stick around?


Seminar Seats Filling Up

Seats are  filling up quickly for next week’s Hidden Pivot Seminar. Since it is the only class I plan to offer this summer, you should sign up now if you want to supercharge your technical chops in time to enjoy autumn on Wall Street. The package includes, for the first time, unlimited access to real-time tutorials held each and every Wednesday morning, as well as to recordings of these sessions if you cannot attend them in person. Only four seats remain for this session, which will be held this Thursday and Friday evening, July 23-24.  Click here, and then on the “Upcoming” tab to register;  or here if you would like more information as well as a detailed description of the Hidden Pivot Method and a free Hidden Pivot calculator (our latest model, perfect for beginners). 


Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. 

-- Posted Monday, 21 July 2008 | Digg This Article | Source:


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2019 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


The views contained here may not represent the views of, Gold Seek LLC, its affiliates or advertisers., Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, Gold Seek LLC, is strictly prohibited. In no event shall, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.