By Jennifer Yousfi Managing Editor Investor worry over the solvency of U.S. mortgage-giants Freddie Mac (FRE) and Fannie Mae (FNM) have gutted the stocks over the last few days more than halving their market capitalizations. News of a possible government-sponsored bailout sent Freddie Mac and Fannie Mae shares plunging yesterday (Thursday) dangerously close to new 52-week lows. Freddie Mac shares sank $2.15 yesterday, a 20% decline to close at $8.11. Freddie Mac is down 76% year-to-date as of Thursday’s close. Fannie Mae stock had a similar fate, shedding $1.95, an almost 13% to decline to close at $13.36. Fannie Mae shares are down nearly 67% year-to-date. Sign up below… and we’ll send you a new investment report for free:...

I find myself in the Swiss Alps this weekend, spending a few days with my family in the picturesque village of Veysonnaz. While tranquillity reigns and the family delights in having my attention for a change, the bad news for readers is that “Words from the Wise” is taking a break this Sunday.

As a substitute for the weekly review, I have obtained the necessary permission to republish a fascinating discussion of Kate Welling (Weeden & co) with Albert Edwards and James Montier of Société Générale. They are, in a word, skeptics, and at this juncture most deeply skeptical of any and all notions that “the worst is over”. The article will be up on

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Just a few days ago, OPEC President Chakib Khelil told a French television station the awful truth that U.S. consumers don't want to hear. "I foresee prices probably between $150 and $170 this summer," Khelil said. At the same time, Libya announced it may cut production because the market is "oversupplied." Oil Minister Shokri Ghanem said: "We don't see any need for more oil. There is plenty of oil in the market." Libya pumps about 1.71 million barrels per day (bpd) of oil, out of total OPEC output of 32.12 million bpd. That means Libya could easily take away the 300,000 barrels in new production that the Saudis promised just a week ago. The Libyans, along with the rest of OPEC, want prices where they are now ... or higher. Why? Because they want ...

Again, I cannot short individual names but I would of liked to short Apple (AAPL) for the near term as I wrote a few days ago [Jun 9: Apple Buy the Rumor, Sell the News?]Don't look now but this chart has all the makings of a double top. I can't short individual names, but this might be a short term short, at least until the $160-$170 range.... in lieu of that I have just cut back the long position, awaiting lower entry points to rebuy. We'll see if I get one.We are down to the first support, 50 day moving average ($172) so I am beginning to rebuy, but only a bit here since this is definitely a double top we have formed. I'd much prefer the 200 day moving average of $161 (or lower - maybe low to mid $150s would be ...

I happen to spend my summers in Norway. I was quite amazed at the amount of negative response received from European posters on the ECB post. I still believe the ECB is making a mistake. Granted, the ECB is dealing with a host of issues the FED does not have, such as, semi-rigid labor markets. I still believe the ECB’s target and potential slavish adherence with keeping to an inflation target will cause a lot of unnecessary pain to the Euro zone. Yes, I am in the “this inflation is transitory” camp. However, the last few days have seen an orchestrated move in several central bank policies. Most notably, the ECB is telegraphing the potential to raise its rates. The Bank of Canada did not cut rates. India has raised rates. China is making moves to drain liquidity from its system. ...

Lehman Brothers (LEH:NYSE) is one of the nation’s major investment banks. Lehman was founded in 1850 and has a rich history on Wall Street. However, Lehman’s stock price has been taking a beating this year as they have been painted with the same brush as Bear Stearns. There are rumors floating around Wall Street nearly every day about how Lehman is rapidly running out of liquidity and Lehman’s need to go to the Federal Reserve’s discount borrowing window on a regular basis.

All investment banks, including Lehman, are built on two items - liquidity and trust. When either of these items is lost, investment banks cease to exist and the best that be hoped for is similar to what happened to Bear Stearns-an arranged takeover by a stronger firm. Lehman’s efforts to raise fresh capital have caused the markets to fear that Lehman is going down the same path Bear Stearns

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Solar has been on fire the past few days due to some positive earnings reports out of the Chinese names. With Yingli Green Energy (YGE) approaching a 20% gain in 3 days, I am going to sell off another 200 of my remaining 500 shares. Earnings are tomorrow and clearly with the "right" numbers the stock could be up 30% tomorrow for all I know, but if so I will probably sell the last of my position into that spike. When this group gets hot and heavy as it is beginning to, I begin to get nervous. Either way, I can lock in some gains here so I am choosing to, with the stock near $26.20. This takes the position down from 1% of fund to 0.6%.Again as I stated with some sales of late, on a technical basis, many traders would actually ...

I am doing about 2 weeks worth of transactions in 1 day... exhausting. Just to avoid being a pig I am taking down my Cummins Engine (CMI) by 1/3rd. I restarted this position April 18 as a weak dollar, undervalued US multinational [Apr 18: Restarting Cummins Engine as the Rest of the World Moves on Without USA] in the $53s. I am now looking back at old holdings that are industrial in nature and am going back to Cummins Engine (CMI) - which has great exposure to India and China. This was a previous fund position, that I closed in November [Nov 13: Closing Cummins Engine] correctly anticipating a selloff and weak period for these type of names. Since then, on April 30th it reported excellent earnings [Apr 30: Cummins Engine Excellent Report on Strong International Sales] at which point I sold 200 of my 500 shares in ...

Very busy day today! I am cutting all 3 solar positions today but with a caveat - all 3 are under a resistance level; if the stocks show enough strength to break above this resistance, I'll buy back. They have been mostly range bound (strangely) with energy prices ballooning but there is a lot of strength today as the speculators run from 1 sector to another in their rotation. Looks like today is solar's turn. Let me explain each one Yingli Green Energy (YGE) is in the $22.70s. If it breaks north of $23 (200 day moving average) than it's in far better technical condition and I'd buy back my stake I sold... right now it's still range bound but at the top end of the range Trina Solar (TSL) is in the $43.10s; it could still work all the ...

The individual names do not matter at this point so I am going to just consider this mini basket to be "1 position". Last Thursday as the chickens were running around with their heads cut off about the "strong dollar", I was incrementally adding to my coal stakes [May 1: Incrementally Beginning to Add to Coal] so today I am simply reversing those purchases plus taking out some Alpha Natural Resources (ANR). Let's look at them as a group since that is how I look at these 4 names - I had a 10% weighting going into day with Arch Coal (ACI), Massey Energy (MEE), ANR, and Consol Energy (CNX) They have come a long way in just a few days ACI from $53s to $62s (+17%) MEE from $48s to $57s (+19%) ANR from $46s to $58s (+26%) CNX from $75s to $89s (+19%) Please note I did not buy at the lows Thursday, ...