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U.S. Could Profit From Fannie Mae Bailout, CEO Mayopoulos Says
http://www.bloomberg.com/news/2013-04-11/u-s-could-profit-from-fannie-mae-bailout-ceo-mayopoulos-says.html?cmpid=yhoo
Your right, it was too fast. Healthy stocks appreciating take two steps forward and one back. Here's your step back.
They all know and are vested, and so are their friends and family. Make no mistake about it...
Regardless of the scenario, I think the commons will have value. As the preferred appreciate, the common will eventually appreciate.
I have no clue what would be a reasonable valuation for the commons, though... Take a guess.
That is good to know the community banks are still holding.
Nice,...very nice.
Camero, just be sure to transfer the shares to the new account when the shares are at 100% RV of close to it. The new owner (if for example a cousin) will get the same basis, but they could get more if their tax bracket is lower than yours, if you just gave a gift of cash.
I'm thinking about doing this for a cousin as a gift, if and when we reach 100% RV.
I don't have Etrade, but that should not be a problem. It's just simple a transfer of ownership. There should be a form online to fill out. It probably takes 3-5 days to complete. This is also a good way to give, for example a cousin or some other extended family member in need, a gift of shares (when we are at RV).
BTW, for those folks with regular brokerage accounts, be sure to have on file a transfer on death (TOD) form on file for your beneficiaries. IRAs always ask for beneficiaries, but many taxable regular brokerage accounts don't list beneficiaries.
I think the common are just consolidating, and establishing a new base. I see some accumulation and think they will start to go up in the near future.
OMG, Wow, that is the entire float.
Please stay on FNF topic. Thanks Joe, I do completely agree with you here regarding the Lehman shares.
We are still far from the goal, but count me in too. This is a good group.
FMCCK rocking premarket, $7 on over 1.8M shares.
Earnings Greater than Walmart and GE
http://www.bloomberg.com/news/2013-04-02/fannie-mae-reports-record-profit-for-2012-on-housing-s-recovery.html
:)
It wouldn't surprise me if just about every other politician, especially on the financial services committee has been loading up shares. Politicians are corrupt...
All we can do is to be cautiously optimistic. All the fundamentals are good. The only wild card is the politics.
Let's hope not...
Not surprised they didn't activate the DTA, been waiting well over 2 years, can wait longer.
Awesome earnings. :)
Barney Speaks.
"Former Massachusetts Rep. Barney Frank says private shareholders in Fannie Mae and Freddie Mac "would be entitled to a pro-rated share" of the entities' profits if there is money left over after they repay the government."
http://finance.yahoo.com/news/barney-frank-addresses-fannie-freddie-124600570.html
I agree, the common are cheap. I think they will survive and have value. No doubt, the preferred are a safer bet. I have been for the most part, heavy weight in the preferred, but did recently pick up some common.
Yea, somebody put in $12M into that security today...
Friday is a holiday, it's Good Friday, market closed.
Indeed, it must me some code between the market makers as to where they plan on taking the PPS on the others.
I've wondered about this, haven't we've seen securities like FNMFM or FREJO go up in the past prior to the others advancing?
Senate Budget Targets Fannie, Freddie Fees
WSJ article, I can't see it is there anything significant in it?
Yea, really,,, and Barron's actually expect readers to pay to read poorly informed and educated news. We are going to see a lot of junk news going forward.
Barrons Article
It was a ballooning item on Fannie Mae's balance sheet called "deferred-tax assets" that was key in causing Barron's in early 2008 to state that the government-sponsored housing giant was busted and would have to be seized.
In a cover story entitled "Is Fannie Mae the Next Government Bailout?" (March 10, 2008), we reasoned that Fannie (trading over-the-counter with the ticker FNMA) couldn't really build net worth out of continuing huge losses and tax-loss carryforwards. The deferred-tax asset strategy was just accounting hocus-pocus, since the company was in no position to make a profit, given its parlous state.
Well, the seizure did occur that September, and one of the first things the government did was to write down some $62 billion in deferred-tax assets to zero. But now, after $116 billion of infusions by the U.S. Treasury, Fannie is again making money and announced last week that it might have to write up the value of this asset again, perhaps to its full value.
Fannie Mae, the nationalized mortgage agency, is returning money to U.S. coffers—but don't play the stock. Of course, the asset won't tarry on Fannie's balance sheet for long. By virtue of Fannie being fully nationalized, the Treasury now routinely sweeps any profits made by the agency over to the benefit of the U.S. taxpayer. This would include balance-sheet gains like that on the deferred-tax asset.
In fact Fannie, having already paid the government $31.4 billion in dividends, could come close to defraying the $84.7 billion it still owes the American taxpayer with payment of the full $62 billion.
Strangely, last week's disclosure sent the common and nongovernment-owned preferred stocks of both Fannie and its mortgage sibling, Freddie Mac (FMCC), zooming. Fannie's common, which had been languishing for months around 25 cents a share, soared to a high of $1.47 Thursday before settling back near 80 cents.
Expectations of eventual value are likely to be cruelly dashed, however. Both Fannie and Freddie are destined to be severely downsized. If the two are privatized, as many predict, there's no reason why private capital would offer any sop to the erstwhile common and preferred shareholders. And should the government continue to operate the two with all their government privileges of low-cost capital and the like, it will insist on continuing to rake in all the profits.
After all, both Fannie and Freddie abused their privileged status in the past when they were shareholder-owned. They won't be given a second bite at the apple; that's bad news for the old owners.
-- Jonathan R. Laing
Completely agree, the Street stinks. I don't recall them covering us any the last few years since delisting.
The Street After Hours news, I did not see this listed on the Yahoo news feed.
http://www.thestreet.com/story/11877868/1/fannie-mae-preferred-shares-financial-winners.html
Seems like these are the key notes to take away from the Street articles, at least it's on the record.
"The professional investor we interviewed said "there is starting to be a change in the tempo, attitude and behavior in the discussion," in Washington on the future role of Fannie Mae and Freddie Mac. "It was easy to bash them when they were not profitable. But they are set to be wildly profitable as home prices continue to rise," he says."
"The likelihood of the government's preferred shares in Fannie and Freddie being converted to common shares is next to nil. However, if it were to happen, the market value of the junior preferred shares would likely jump immediately to par value, according to the investor we interviewed. "
"Hempton believes the Aug. 17 move violated the Fifth Amendment, which requires that "just compensation" be given if the government seizes private property for public use."
"Kao argued the government needs Fannie and Freddie to sustain the housing market and the economy, and won't want to take the lenders onto its balance sheet, as it would increase the deficit by some $5 trillion. The least objectionable of several bad options, he argued, would be for the government to sell its stake back to the public markets. In such an event, the preferred shares would recover all of their original value, he reckoned."
Why is the Street pushing the preferred?
The SLM privatization and wind down lessons explain the rhetoric coming out of the politician's mouths. This is very interesting indeed, and and even more important than the current news regarding possibly activating the DTA. This may be the real reason for the stocks to appreciate.
I don't know about that,... back down, did somebody dump shares? I'm being cautiously optimistic.
Why is someone willing to pay this when they can buy any of the other preferred cheaper?
What new terms? Something to be announced?
What a day! Was it good for you guys too? Lol.
Freight train coming through, FNMA $1.
Well,...whatever, looks like the common may have a 100 M share volume day, and are breaking $1 , after which things could get interesting.
It must have been pure luck or intuition I bought some common in the forty cent range Monday. Something was bugging me this weekend to buy some common. How can I do any work today with this action today..