I was talking to my friend who bought shares of Freddie Mac (FRE) at around 4 dollars. He told me he made 30% in around 4 trading days. I told him to take profits but he didn’t and how Freddie is 1 dollar after the government released plans to put it in a conservatorship essentially making its shares worthless.

Now look back a good couple of months with Bear Stearns and Indy Mac. Bear was bought out by JP Morgan making its shares bounce from 2 to 10 dollars immediately. The government didn’t step in this time most likely because JP Morgan said they would buy it out.

Onto IndyMac. IndyMac had a good old fashion bank run that saw its customers withdrawing money to put the company in a liquidation crisis. The shares plunged all the way to 1 cent before anyone could do anything about it and then the government took it over and the shares spiked to about 15 cents at one point.

3 different situations where one could have made or lost serious money because of the govt. So why is IndyMac placed under the govt and the company’s shares soar while Freddie and Fannie are placed in a conservatorship and the shares are worthless? This is the first time I’ve experienced bank failure in my short life and this is what I would have done. I would have shorted BSC after its 1 day free fall to about 10-15 (est), watched that short go to 2 and then back up to 10. I wouldn’t have touched IndyMac because it was way too fast. I would have shorted Freddie and Fannie but not until it ran up another couple of bucks.

But I’ve never seen something like this happen so I didn’t do anything. Maybe I should have

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