The LONG and SHORT of IT

Fannie Mae's retained portfolio shrinks in August
Wed Sep 28, 2005 09:31 AM ET NEW YORK, Sept 28 (Reuters) - Fannie Mae (FNM.N: Quote, Profile, Research) , the largest U.S. home funding company, said on Wednesday its mortgage portfolio slumped by an annualized 27.1 percent in August, to $768.3 billion, its tenth consecutive monthly decline.
That followed a 25.3 percent decline in July.
The Washington-based company's average duration gap, a measure of its interest rate risk exposure, was at zero months in August versus plus one month in July. This gauges the difference between the duration of assets and liabilities in the company's mortgage portfolio.

**FNM close on the lows down near $4!!

Infrastructure in Gulf is worse off than reported, we are near an energy crisis with winter approaching.

Demand may wane as reported over supply of gasoline doesn't jive with lack of OIL, economy is slowing.

The market follows Consumer Sentiment more X than not, consumer sentiment has plummeted, market upside breadth has dissapeared, new lows AGAIN above 100, market tries to rally and fades in PM, not a bullish picture, IMHO

OK, no we havent seen a collapse, but when buying power is near non existant, sellers could easily swamp bids in right scenario.

What is catching a bid? XTO FDG XOM NEM energies and commodities.

All this happening going into weakest period for markets.

VIX shows little fear, and we wobble within trading range. It certainly feels to me we have seen the best it can be, and if you see the Dow go down to test 10K again? you might find what the other end of spectrum has in store.

Duratek