Welcome to the mother of all takeovers …

They really have done it … the FED and its friends will virtually take over Fannie Mae and Freddie Mac … this is HALF the U.S. mortgage market … WOW … we talk here about 8 TRILLION DOLLARS …

What will happen now???

First: ALL TRUST in the U.S. Government and the FED should be lost by now …

Second: This should really put the breaks on ANY ECONOMIC STIMULUS … They sold their future to the housing market

Third: Watch out for the ripple effects now …

- Equities should see a short lived rally and then sell off hard as economy suffers …

- Bonds should sell off as the U.S. needs now a lot more money …

- US$ should sell off as this is like printing them …

- Commodities should initially rally, but then lose as well as economy suffers big time …

BUT … BE AWARE … in today’s world it depends more on the capital flows than on fundamentals … so be EXTREMELY CAREFUL on MONDAY!!!

It will be the kind of day you shold try rather to preserve your capital than going for the big winner …

I want to see Monday’s action and then I look at the charts … it could be pretty volatile …

Tags: Fannie Mae, FED, financials, Freddie Mac, housing, manipulation

This entry was posted on Sonntag, September 7th, 2008 at 19:15 and is filed under FDAX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.