After trading at $4.40 last Friday, Fannie Mae (FNM) moved up to $6.45 yesterday. The markets had come to realize that the mortgage company might be able to raise enough money in the capital markets to make it through the current housing crisis. Even better, it might not have to raise any significant cash at all. By avoiding a total bail-out by the Federal government, FNM’s common shareholders would be saved instead of watching the value of their stock go to zero.

Lehman Bros. research pointed out today that Fannie Mae’s capital reserve position might be better that expected. According to Reuters, "Lehman’s Bruce Harting is the latest among Wall Street analysts to say that the government sponsored-enterprises (GSEs) have no immediate need for capital."

Yes, he is late. Thanks for nothing.

Douglas A. McIntyre