GO
Loading...

Trading Fannie and Freddie

In a strange twist, Fannie Mae and Freddie Mac are up Monday, Cramer said, while the Dow on the whole is down 236 points, largely due to pressure put on the market by those two government-sponsored enterprises.

Freddie Mac sold $2 billion in debt today, a sign that government takeover might not be necessary for the mortgage company or Fannie Mae . The stock stocks are up 76 cents and 64 cents, respectively with less than an hour left in trading.

Still, “I can’t touch this,” Cramer said of Freddie. While the bond offering may seem positive, there’s always the specter of another downgrade a la Credit Suisse’s lowered rating on American International Group.

The question for Cramer was whether or not the preferred stocks of Fannie and Freddie were worth buying because they’ve come down so much already. There have been reports, however, that government intervention, if it’s needed, would wipe out the value of those preferreds. That would hurt JPMorgan Chase, Sovereign and other banks with major holdings in Fannie and Freddie preferred shares.

Switching to a different part of the financial sector, Cramer said Lehman Brothers CEO Richard Fuld is “paralyzed” right now. Cramer said he doubted that Fuld’s leaving would signal the end of Lehman as an independent company. Also, if Citigroup and AIG are any indication, “"It doesn't seem to matter who is at the helm if the situation is bad," Cramer said. Wachovia’s Bob Steel is the exception.

Lastly, Cramer thinks that Nordson is taking undue punishment after missing an earnings report last Friday. Wall Street, he said, was expecting much more from a company traditionally thought of as a growth name.




Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

Symbol
Price
 
Change
%Change
AFF
---
C
---
FNMA
---
FMCC
---
JPM MLP ETN
---
NDSN
---
SSS
---

Featured

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.