FNM got a big bump today.  A rising tide lifts all boats.  Does the stock deserve it?

I don't think so.  It makes sense for this Fed liquidity program to boost the financials, because it will be easier for them to turn illiquid securities into extremely liquid Treasuries.  But how does it help FNM?  FNM doesn't hold any of these securities.

For the last few weeks Fannie Mae has been surfing a tidal wave of bad news.  There's still rumor that "the mother of all writedowns" is coming.  I was wrong, it turns out, to have closed all my short positions in this stock.  The current situation looks like a good opportunity to put some on again. 

That said, who knows where a rally will lead and if it will continue in the coming days.  Stop order in at $24.10.