Freddie Mac and Fannie Mae Plunge on UBS Downgrades

Unfortunately, the duo are vulnerable to further downgrades from brokerage firms. Between the pair, Zacks reports that 5 "strong buys" and 3 "buys" are still on the table, along with 9 "holds" and 3 "strong sells." Meanwhile, option traders are displaying a rather alarming lack of pessimism toward the underperforming siblings FRE's Schaeffer's put/call open interest ratio of 1.09 is near the middle of its annual range, as is FNM's ratio of 1.08.

While both stocks have plunged amid the recent credit-market morass, it may interest those of you with a morbid curiosity to know that Fannie Mae has outperformed Freddie Mac on a relative-strength basis since mid-2006... though, in light of recent developments, this probably falls under the category of "cold comfort" for Fannie Mae investors.