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fair enough
The initial action may very well have been in good faith, by all parties. Given that fannie and freddie arguably were/ are the most important financial institutions in the world, any perceived instability in the companies could have had even more grave consequences. It has been brought to light that the russians had contacted the chinese with a plan to flood the market with fannie and freddie securities in an attempt to further destabilize the economy. Given that, and the quote regarding concerns about the chinese withdrawing from the market that i just provided, placing the companies into conservatorship as a signal to world markets was at the time in the best interest of our country for national security reasons. However, this is a different narrative than "Freddie and Fannie are evil private companies whose shareholders deserve to be wiped out because we don't like them, but will don't want to provide any documentation that would explain legally why they are not entitled to the normal protections or rules laid out in the laws of the united states. Please take our word for it we are the good guys."
i have faith in the justice system in our case for several reasons:
because the courts have recently and repeatedly ruled against questionable actions by this administration
all proceedings thus far have been positive with regards to our case
we have powerful legal and financial "allies" capable of exerting the necessary pressure. although the hedgie involvement is a double edged sword, without them "mom and pop" would have 0 chance bringing this to light given the concerns that you have cited.
An quote from H Rodgin Cohen, lead counsel of Sullivan and Cromwell for Fannie and almost every other major financial institution at the time of the bailouts:
He has also gone on record saying that the biggest mistake was not doing more to protect the junior securities at the time. But they were acting in haste to try to help stabilize the markets for the good of the country. Nobody in that room intended this to be permanent...
Take me to that weekend when they took over Fannie and Freddie. ...
I think it was a Friday morning when I received a call from Dan Mudd, the CEO of Fannie, saying he had been summoned to a meeting with Bernanke, Paulson, and the head of the regulatory agency for the GSEs, the government-sponsored entities, who was Jim Lockhart. ...
We pleaded that Fannie was deserving of better treatment then Freddie, because Fannie had gone out and raised a lot of capital. I'll never forget one of Secretary Paulson's lines; he said, "You may think that and we may even agree, but the Chinese don't know the difference between Fannie and Freddie," because they were both government-sponsored.
So they basically said: Get your board together, because we want you to be placed into conservatorship.
The reason why at that moment they made that decision?
It was principally that Fannie and Freddie were having enormous difficulty funding in the markets and the yield was starting to spike.
The short-term loans again were the problem.
Exactly right. …
http://www.pbs.org/wgbh/pages/frontline/oral-history/financial-crisis/rodgin-cohen/
1. wrong.
before the conservatorship the entities were gse's (government sponsored enterprises) and as such the government did have oversight (including capital requirements). they were at the time a curious public private hybrid. arguably this arrangement was "flawed", nevertheless the outline for their creation and function was quite specifically designated by the government as was forms of oversight within legislation regarding the gse's.
2. i am not claiming that hedge funds are morally superior. i do think that in this instance they are on the right side and are functioning how private sector entities are entitled/ encouraged to act under a system of capitalism.
3. yes, stealing. based on questionable arrangements to begin with, which were ultimately not followed for the financial gain of the US treasury. let's not forget that the need and form in which f and f were "saved" was carried out almost exclusively at the insistance of hank paulson who was the former ceo of goldman. geithner now works in private equity for warburg pincus. there is no moral difference between the individuals who run hedge funds and the individuals who were in charge of the bailouts.
the gov was charged with overseeing the entities prior to the bail out. any risk they bore was justifiable due to years of political tampering and poor oversight. f and f were required to stay in the market during the downturn and were used as a tool to save other private market actors. f and f bailed out the country not the other way around....
also, hedge funds have followed the law and the government has not. not following laws that you created and stealing from your own citizenry...
stupid is as stupid does.
so 50-80 mil. we will have to add that to the govs. disgorgement tab...
oh lord, don't give the treasury any ideas. a fnma/fmcc inversions could allow them to fire the accounting staff in the states and move the companies offshore so the treasury could save on the red tape involved in paying itself through income taxes and just sweep all the profits to the caymans were it can pay itself there ;)
i am all for efficiency, but what i don't like about this is that if they convert those assets to cash it will be subject to the sweep and the lease will become a company liability. we need the courts to step in on these mf'ers.
this thing has been getting supressed since the icahn announcement, but the progression politically and in the courts has been generally quite positive. the big boys are in total control of this now, they could be keeping the price in check and shaking out retail especially if there are plans to raise a large amount of additional funds to invest in the near future. retail gets impatient if it takes more than 4 months to realize their 10 bagger...
the pershing square ipo later this year could be be really interesting as well. will allow them to deploy much more capital without needing to keep cash on hand for fund redemptions. ackman seems to be comitted here for the longterm, with the legal action and the swap agreement with ubs. think we will see more of that capital deployed here...
exactly. and since they seem to be completely incapable of getting their fiscal house in order, they are not going to stop this until the courts step in. which they will. the us government is not a distressed asset hedge fund...
at a certain point the gov is going to have to stop supplementing its income through these suits. they have made a tidy profit on the "bailouts". i am all for accountability, but at a point the actions by the gov are detrimental to the country's economic stability. Mainstreet doesn't care about these settlements by banks primarily for the actions of other institutions that they absorbed. they want to see individuals prosecuted for their actions and thrown in jail. Show a few c-levels being walked out of their mansions in cuffs and we are getting somewhere...
of course i don't, that wasn't the point...
but i do know that every conclusion i have had about the story since this thing was trading sub 1 has since been confirmed by the smartest investing and legal minds in the world, so i'll stick with that.
Look at the 2 year chart with the 200 DMA. Looking pretty solid. Haven't been this close to the 200 since last August, if we do touch it... boing. If you think this is over then you aren't paying attention to the details of the story...
FNMA 2 YR Chart
right, but in this case the conservators use of power is dictated by the Treasury and the Executive branch who happens to be the beneficiary of the PSPAs. hence the lawsuits...
which is probably why berk and ackm have made specific attempts to reach out to the board to function in a normal capacity. more of an indication and evidence that the entire structure of this "conservatorship" is dubious...
aye, there's the rub. it would not be excessive if it were fully shareholder owned, but since executives at the companies seems to be essentially functioning as puppets of the government at this point it feels excessive to be making 7.5 times the POTUS annual salary...
Carneys...Circus folk. Nomads, you know. Smell like cabbage. Small hands.
3 in a week...
Nope it was Lehman Bros that set off the crash...I remember vividly watching my puts on the DIA etf that morning.
another carney hit piece. this guy has a bone to pick. did fannie mae f*ck his wife or something?!
when they are blasting the media with a steady stream of bs like this it is a good time to buy...
yep. going down hard. here comes the judge...
I agree. The hedgies are going to go to the mat if necessary. They should, the law is on their side.
The media hit pieces are interesting. John Carney in Seeking Alpha and WSJ this week. Interesting that he has the same name as Congressman John Carney who proposed Delaney Carney Himes.
yeah buddy. ack attack.
probably not...
that's a large balance sheet...
fair enough. are they really gonna take it over though? thats a lot of req. capital?...
but you seemed so sure a year ago?...
berk said a couple of days ago, justifying their 15% portfolio stake, that f and f were the most important financial institutions in the country if not the world...
It isn't that bad really. It pulled back from 4.60 to 4.04 less than 20%. GP*O pulled back from $48.00 to $38.85 in the time you jumped out and jumped back in here. Hopefully get a nice rebound. We will see...
Me too.
Congrats on retiring soon. Hopefully they will settle on Monday, and you can get a jumpstart and be sipping drinks on a beach by Friday ; )
the implications of this case are enormous, obviously. sweeney is goong to proceed with the utmost caution to make sure that everything is handled as gingerly and appropriately is possible. i would not want to be in her shoes. i cannot imagine the pressure to have to decide this case. but as a reasonably well informed observer, i think we all agree what the outcome is going to be. getting there takes time however...
see. ihub emails do make a difference
:)
yeah. that is a more fair characterization. cnbc had it on a sidebar, noting a 63% decline from Q2-13.
this has had trading volume as high as 250,000,000 shares trading from $4-6 during those runs. I think that money runners contribution to that would be fairly insignificant.
This is however the first post involving HotStockAce i have seen that is actually:
HUGE NEWS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
it is definitely misplaced on the otc. there is no valid reason at the pps is has been trading that it should not be uplisted to preserve and conserve the companies assets. political reasons are another story...
this time last year the question was will $1.00 hold and were hedgies accumulating, now it is will $4.00 hold and will hedgies add to or trim their positions. pretty good all in all here in fannieland. although the volatility did make for more interesting trading days and energetic discourse on the board.
or shut down the otc the day fmcc hit net 0. or have obama give a speech in between freddie and fannies release to kill momentum. they tried to supress it for so long...
they don't want this stock to rally. numbers should be better than last Q
patience. the big boys in this one didn't take a position to lose, and the law is on our side. smart money goes to the mat when they know they are holding a royal flush. elliott management just drove argentina to default in court, they are just a block or two away from perry capital. we will win. staying strapped to this rocket awaiting liftoff. wouldn't be surprised if icahn is jerking this around, shaking off the impatient. sometimes the greener grass isn't so green. gpr* and n*wl and s*y are recent examples....
except instead of pictures of putin shirtless on a horse we get pics obama playing b-ball or fist bumping, or George W clearing land on his ranch. All the same corrupt BS at the end of the day....