Credit risk spreading

Now that Fannie and Freddie are on the brink of a massive gov. bailout, what will this do to the hundreds of financial institutions that own the shares? What will this do to the exposure of the already debt instruments issued by the feds?

With the uncertainty of which financial institution is going to survive, why risk it? Why not invest in gold since it is at a very good low right now. If you want the conservative way of holding the bullion, you can now buy GLD without the storage problems that used to be associated with gold investing. If you want to ramp up the leverage, buy stocks in gold companies. The theory is that as gold runs up, the companies are more profitable and the stocks move more than the gold itself. Or buy L.E.A.P.S. (long term anticipation securities) an acronym for options that trade 1 year or more out.

Things like oil and gold can not go to zero. They have a value. But as we are watching many stocks can and do go to zero.

The fall out is just starting to move into gear. As more institutions have no choice but to show the losses on the books it will get more ugly. Try to make sure your retirements are not involved in this toxic mess. I know many have no choice but what they are allowed to place into, but try to find the safest place. If you are in a retirement plan that offers nothing against this onslaught, try opening up a brokerage account elsewhere and buy ultra shorts as a hedge.