Many including me have posted valid reasons for why the price rose in the first place.
The big WS guys obviously are at least as smart as the message posters here to know the same reasons to bid up the price with hundreds of millions of shares exchanged (mostly from some of their own accounts to the other).
The reason for why the price dropped from 1.47 on March 21 has to do with Bernanke hinting that day at the moment the drop started about his retirement from Fed and some Obama Administration official concurring that Ben is exhausted.
Bernanke's support for mortgage backed security and easy interest policies suddenly appeared to end soon on that news. This meant that F&F would no longer receive Fed support.
A big WS guy, who was heading the Treasury in the past Bush Administration, wanted to end both the Fed and F&F, but many members of the US Congress prevailed in supporting Ben to not take such a step.
After Bernanke is gone, the Big guys have one more shot at subduing the will of the Fed and Congress.
It was then natural for them to trade down F&F stocks as soon as the news of Ben exiting the Fed was out on March 21.
Honestly, I too was apprehensive at that time, but felt that the big guys will ultimately recognize that they will lose more than others, eventually, if they kept hurting F&F. JMHO
Much simpler then that, MM moved in on optimism of pocket housing market news started the wave moving and then got out while the getting was good. Same thing happened in 2011 with less optimism in the air. As one other poster noted the funnel is still full of foreclosures happening and delayed but going to happen. Its a trickle down tact at keeping the housing market from collapsing in free fall when things were much worse. As long as investors keep sponging up the foreclosure market things will hold. If investors slow down then who knows. FNMA FMCC are long holds and will every so often probably spike like this when players move in. Its like every other play. Its in the timing.
All positive earning stocks are all the ime shorted before earning and for 2-3 days after the move back up... it's a classic they are day trading the Bollinger bands and averge righ now so .... let's see in 15 days... where the pps will be would the price will be stuck til next quarter... Deferred or not it doesn't matter because no matter what huge profit that will go to paid back the taxpayer... so somewhere would be a great tool for next quarter if they kkep the tax deffered to next quarter... The question is right now if they allow it this quarter but it exists and it's amatter of time...