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Friday, March 29, 2024

Another Sign Of A Bubble? The Trashiest Of The Trash Financial Stocks Are On Fire

Courtesy of Joe Weisenthal at Business Insider 

Essentially bankrupt entities like Fannie and Freddie have seen their stocks surge this week. Ambac, too, has been on a tear.

Is this yet another sign of a big bubble… punters taking a flyer on these penny stock irrelevancies.

Kind of. Essentially they’re trading like options on the putback issue becoming huge. If the major banks seriously have to buy back a ton of mortgages, that could (maybe, theoretically) pump some life into these companies. Most likely not, but for a few cents, why not take a gamble. (Thanks to Automatic Earth for the heads up).

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