Investment: Wall Street's Favorite Girl

Fannie Mae leads two lives.

At its Washington headquarters, Fannie Mae—whose real name is the Federal National Mortgage Association —operates with the opulent dignity of a well-heeled bank. Its job is to provide mortgage money for Government-backed housing loans when funds are hard to get from private lenders. This year the association will finance about a quarter of the nation's new housing.

On Wall Street, Fannie Mae is a volatile stock that has suddenly become enormously popular. Logically, a Government-sponsored enterprise ought to be about the last source of frenzied speculation. Yet in the three months since Fannie Mae common began...

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