On Fannie Mae (FNM) and Freddie Mac (FRE)...
JJC:    Okay, I've got it on a good authority in the last few hours of work that the President has changed his view... now, he had not been a friend of these organizations... His speech, if you parse his language, was very clear... Which is, we're done here, we don't need more capital... We're not going to pressure anybody, that Lockhart is on board, Paulson is on board... The stocks have gotten too low, they are not going to pressure these companies to raise capital...

Wall Street can say whatever it wants, but I believe that the turn in FRE was the turn in the President's position, very different from yesterday...  Someone got to the president from these organizations and explained to him he's got to change his tune... I think these situations, maybe for the moment, are done going down...

Now I do favor a situation where the federal government puts some warrants in here and kind of "tresuratizes" mortgages, right, right... The president... people have to go back over what the president said, he changed his position... That means that the insolvency stories that were put in The New York Times are no longer correct... That the Pool position was a renegade position yesterday, and you should begin to see a rally in these two stocks... That is a very big change because the president changed... I had always felt that the president wanted to wipe these out... He's always viewed them as democrat... big "d"... in weighting places... but he changed his view.  In the last 12 hours... this president, who has been completely hands off, laissez faire, letting these two institutions go out of the way, just disappear, he's changed his position... So FRE is going up because of the change in the president's position...

Dodd is a democrat... President Bush has changed his position... This is the first time he has begun to say these institutions must be preserved... That's been the difference... The president's been completely hands off until two hours ago... FNM should not be going down any more today... Government can take 50% more... The president changed his view, okay?... He had been the jackboot on these... He is saying basically what we saw in 1990... There was a particular moment in 1990 where the bank examiners, they were told, guys, listen, don't let the system go down... That's what President Bush did today... These stocks should no longer be going down... The big change... My trade on the preferreds is that I think they will come out okay... I believe that the president, who had been the enemy of these companies changed his tune in the last 10 hours... The speech he gave today was new and relevant and I think that that's because Fannie Mae and Freddie Mac made the case to him and he figured it out... He figured out that his presidency was on the precipice of being President Hoover, and he's ending it... These stocks should not be going down anymore... I just gave you a message of hope on FNM and FRE, which for the last 50 points I have not endorsed...

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On Fannie Mae (FNM) and Freddie Mac (FRE) eligible to borrow from the discount window if they need to...
(BREAKING NEWS WHILE THEY WERE TALKING)
JJC:    This stock should not be going down anymore... I'm telling you, the president changed his view, people just kind of said, yeah, that was just another boilerplate, he might as well been talking about the Texas Rangers... No... He changed his view today... That should stop the run on the equity... Do I like this situation?... I think the government should, you know, take warrants, and "tresuratize" mortgages that would end the house price depreciation in this country... That may be too bold for the president right now, but the president spoke, people just acted like it wasn't even said... That was a mistake... There should be a short squeeze, the president just engendered one... I don't think people of the president understand the notion of a short squeeze, but he is creating one... No, no... It's always an issue of capitol... I appreciate what Dennis just said, but its an issue of capital... And until the president said what he did, The New York Times controlled, which is that they didn't have enough capital... The president made it very clear... He changed his position... The president had been the enemy of these companies, today was a change... You got to parse his words... He went from having no reason to believe these companies could survive in equity to the president changed his view today... Parse his words, parse his words... The president, he got involved... It doesn't matter, the discount window it was an issue, do they really need capital?... The president finally spoke... The president said, you know what, they dont' need capital... That's what the president basically said...

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On today's drop in the Dow...
JJC:    But yesterday the president said we need legislation... What does that mean?... It means that we need to privatize... The president did not use these, he said they are essential today... He did not use the term "need legislation"... That's a major change... He meant to make a major change... I know a lot of people have now felt that the president is out of touch... This was the first sign of the president saying, listen, we're going to show for Baron's here... We're not going to make them raise equity... Whoever kept saying that, the president in the end, I know, stop trading, is still an important man when it comes to this debate... He changed his view... He took the New York Times position off the table... The bill pool position was eradicated with the president's speech... Why doesn't anyone care what the President of the United States says?... I actually care... I want the warrants, I want the warrants to change... But the president changed everything today.

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