Mr. Market liked beaten-down stocks in July

This chart divides the universe of the 3000 largest cap U.S. stocks (minus a few that haven't been around for two years) into deciles by their two year total return from July 2007 through June 2009. Stocks that did poorly are to the left, stocks that did well are to the right. The stocks that did best during July are those that did worst during the prior two years.

The relationship is so smooth it's almost hard to believe. But then, if we drill down to the individual stocks, as the scatterplot below shows, the underlying reality is somewhat less orderly.

What stocks are those way to the left that lost 99% of their value over the last two years but still have enough market cap to be in the top 3000? Fannie Mae (FNM), Freddie Mac (FRE) and Ambac Financial Group (ABK).