Fannie/Freddie Chatter - Something Big Is Brewing

I am hearing chatter something is about to go down soon. Who knows if this will be a bailout, but rest assured the tax payer will likely be on the hook for something.

The options market is confirming something is brewing with the XLF put-call ratio out of control. There have been approx 500k at or near the money front-month calls and 250k for next month. Put volume is a paltry 110k front month and about 45k next month. Several other indicators of ‘news pending’ are flashing.

Being the contrarian I am, I would view this action as bearish for financials. We will see soon.

Earlier today I discussed why keeping them private will be bad for housing. But who the hell knows what the solons have up their sleeves.  Link here.

Posted in Categories: Contributor, External Research, Financial, Stocks.

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