Three Big Questions: FNM, China, S&P 1,300

There are three big questions floating around on the Street today:

1) Does the debt of Fannie/Freddie take a haircut? Most traders would say no prior to today, but Ben Bernanke's comments that debt haircuts might be in order for some (he did not specifically say for Fannie Mae or Freddie Mac ) has given many pause.

That debt--and much of the preferreds--are owned by many regional banks that hold them as part of their capital base; traders tell me many are afraid to do damage to that level of the capital structure.

2) How much will China stimulate its economy?

The government there is rumored to be looking at a stimulus plan of their own; many traders believe they are expecting a slowdown. How much stimulus some think they will provide -- and how much effect that will have on commodities like oil -- determines whether some are bullish or bearish on China.

3) What will it take to get S&P 500 over 1,300? 1,297 was the August high just a few short weeks ago. Most think the answer is to get oil prices below the nice round number of $110 -- we got as close as $111 last Friday.

CNBC's Financials in the News:

-Lehman Bros.
(Story: Hostile Takeover Coming?)

-American Express , Wells Fargo
(Buffett Says He's Buying AmEx -- OR Wells)


Questions? Comments?