Fannie Mae Is More Dangerous Now Than It Used To Be

Shares of Fannie Mae have never been more active and it's not because the company is performing strongly writes the New York Times. The beleaguered mortgage lender routinely trades over 30 million shares a day, thanks in part to day traders who are in and out of the stock in a few hours looking to make a quick buck, or lose it. “The volumes are astonishing,” said Bose T. George, a financial analyst at Keefe Bruyette & Woods. “It’s like a casino.” The stock closed at 40 cents yesterday, after having gone for $85 back at the top of the housing bubble in 2007. George expects the shares will eventually trade to 0, but isn't sure exactly when that will happen. He rates shares at Underperform. “It’s not really a stock anymore — everyone knows this is going to zero,” George said. Despite the fact that Fannie Mae and sister Freddie Mac were effectively nationalized by the U.S. government, the volume in trading is astounding to many on Wall Street and Washington. No one knows what to do with them and answers may not come until the Obama administration holds a conference on the future of housing on August 17. It is set to give an answer to Congress by January of next year. In the meantime, Fannie Mae will continue to be the Wild West of Wall Street. See Some of the Top Moving Indexes Here.