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Fannie Mae: Big Guv Up to No Good?

September 1, 2006

The housing market is a total debacle right now. People with no-interest or ARM (adjustable rates) loans are falling by the wayside; foreclosures are at an all-time high; new housing starts are sinking, with many new construction projects being abandoned before finishing; houses (new or used) aren't selling so hot; and market values are plummeting nationwide. Yet Fannie Mae, a government-sponsored enterprise, is suspiciously gaining ground. It's stock price has consistently gone up throughout August, and in fact, the current price - at $52.76 - is 27% higher than its 52-week low. You do the math. How can that be? However, in spite of this significant rise, the analysts appear to be fairly quiet as regards recommendations. Perhaps there's a "consumer confidence" measure going on here.

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