According to MarketWatch, the government will be stepping in on the troubled Fannie Mae and Freddie Mac. The two mortgage giants will fall under consevatorship by the Federal Housing Finance agency. What does this mean to satellite radio. In the short term likely nothing, but in the longer term, the move could be a boost to the markets as a whole.
In today's economy, stability is something that many people want to see. The financial sector has taken a beating, and the credit markets have dried up to a point that even with the ability of some consumers to pay their notes, there is simply no money to lend. With this, the market and economy are not stable, but rather stagnant.
Having the feds take over will not provide an instantaneous solution, but will give a bit of stability to the financial sector, which will in time, perhaps, let the credit markets begin to flow in a more normalized manner.
When investing in any stock, it is a good idea to have your finger on the pulse of the overall market as well as the overall economy. Fannie Mae and Freddie Mac becoming stabilized is one market worry that can now be set aside. No, there will not be a speedy recovery, but at this point any recovery is what the street is looking for.
Position Long SIRI