Freddie Tries to Pass the Buck

Thank goodness Thursday was only 24 hours long. Any more, and we wouldn't have been able to take all the fun. Freddie Mac (FRE - commentary - Cramer's Take) reported what the New York Times called "a gaping quarterly loss," and management predicted home prices would fall 20% nationwide.

Management might be right, but such a statement is blatantly self-serving. They want to point to the macro and say it ain't their fault. There have been a series of scathing articles about how senior management ignored their own risk officers' advice and kept writing bad business.

This is the same management that has pledged to raise $5.5 billion in new capital when "the time is right." That would be some neat trick seeing that the total equity market cap of the company is about $4 billion. Download Maria Bartiromo's interview with the CEO of FRE on CNBC.com and watch him lamely try to justify his actions.

AIG'S CEO, Robert Willumstad, is smarter than John Thain of Merrill Lynch and refused to say whether AIG will need more capital after another huge loss. They may or may not, "depending," according to Willumstad which is, of course, the correct answer. But the market hated it and trashed the stock. It was the worst day for AIG since it went public in 1969.

Wal-Mart (WMT - commentary - Cramer's Take) predicted weaker sales since the effect of the tax rebates has faded. Unemployment claims ticked up to a recessionary reading. The Wall Street Journal had an article detailing the rising default levels for prime (not subprime) mortgages. Consumers borrowed twice as much as forecast to keep body and soul alive since home-equity loans have been shut off, seeing that home equity is, in some cases, negative equity. And American Express' (AXP - commentary - Cramer's Take) debt might be downgraded by Moody's.

Even the price of oil went up a bit when Turkey announced a key pipeline will be closed for as much as two weeks.

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Vincent Farrell Jr. is chief investment officer for Soleil Securities Group and a regular guest on CNBC and other national print and broadcast media.

Prior to joining Soleil in August 2008, Farrell was a principal of Scotsman Capital Management. Before that, he was chairman of Victory Capital Management of Cleveland and chairman of Victory SBSF Capital Management in New York. He was a founding partner of Spears Benzak Salomon & Farrell, which was acquired by KeyCorp in 1995. Vince held a variety of positions in his 23 years at SBSF, including chief investment officer, and he served as the portfolio manager on a number of the firm's largest client relationships.

Prior to joining SBSF, Vince spent nine years at Smith Barney as a vice president, sales.

Vince graduated from Princeton University in 1969 and received his MBA from the Iona College Graduate School of Business in 1972.