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I'll invite those friends next time, then. Thanks!
I have 100% faith gvt screws it up, whatever they do with their housing reform efforts. I see the benefits of liquidity that FnF bring to the market and how they make homes affordable to the middle class. But I'm here bc I think there's no way the gvt will do the right thing, which in my mind means that they will continue to keep FnF as part of our system. Not that I'd eliminate it if it were up to me. I wouldn't, but i think the argument for getting rid of them has a lor of merit. Think about it: free markets allocate a society's resources more efficiently than any other system. $ and goods go where they are needed, etc., not where they will be wasted. But in whIch truly free market is there a promise that once you buy something, you'll always have a buyer waiting to take it off your hands if you want to sell it? That is not natural. Without an entity like FnF that is always there to purchase mortgages, buyers and sellers would have to be more careful about what they buy and sell! Sure, the GSEs are entrenched, and have done what they were designed to do until the 2008 fiasco. But the prices of homes have far exceeded the growth in wages over the last few decades. Maybe that wouldn't have happened in a free market. I'm long fnma, but I think one could argue that we'd be better off without this system. I don't know if I'd fully agree, but gvt is excellent at distorting prices and misallocating resources, and I think it's fair to wonder whether the GSEs have ended up doing a great job of those negative things over the last few decades. I don't think gvt will change that system too significantly, bc it serves them and the bankers and our debt-based monetary and economic system too well to mess with it. Hence I'm holding long fnma and some fmcc. I don't see very many free market proponents in DC these days. And it'd be too much of an adjustment to get rid of the GSEs after so long. But it's fair and interesting to consider their role in inflating housing prices. Just being objective about it. Middle class homeownership is wonderful. It'd be difficult without a guaranteed buyer of mortgages, though. And some objectively question what good middle class homeownership is if every so often those same middle class people end up holding the bag (in the form of a mortgage they can't pay and a house they can't afford) etc. Without a guaranteed buyer, that middle class $ that went towards a home might have been allocated more efficiently and effectively. Keep in mind, I'm just throwing ideas out there. i'm not saying we should eliminate the GSEs!
Short attack or leaked news?
Obit, I think CSP could not adequately replace FnF. But I'm not an expert on such detailed matters, and it's interesting that, as you pointed out a week ago or so, that so far there appears to be no solid legal reason that the CSP could not be chosen to replace FnF.
If reason prevails in the final legislation, I imagine that the CSP will be a separate entity that improves efficiency, and FnF will survive in some reduced capacity, which would still be great for current common shareholders (unless I'm failing to account for some crazy possibilities). If reason gives way to extreme cronyism (a legit concern these days, I think), then a range of possibilities could result, including perhaps the CSP replacing FnF. But I doubt DC will go that far. However, the banks' (huge donors to politicians) will, and the surface political appearance that slaying the "evil" demon named FnF would grant some undeserved hero status upon politicians are two reasons to be a little cautious here. If only FnF could unleash their own lobbying efforts, we'd have another thing on our side. It's clear that they and the entire private mortgage / housing industry wants to keep FnF in place even after reform. Thanks again for all of your extremely helpful info, insight, digging, and sharing. I wish I could bring more than this relatively "soft" analysis to the board. Hopefully it at least helps some to think through all of this.
Seems his language does nothing to make us think it's impossible that the common securitization platform could not serve as the replacement for FnF.
But the GSEs' leaders these last 2 weeks have really been saying they have the experience and knowledge to remain in place at the core of housing finance system.
The building's for the CSS right?
Wow- algo chart central here!
Agree completely. Fed gvt even recently spent something like $2mil on a study that examined the drinking habits of chinese prostitutes. No joke, that actually happened. Look it up. When they shut down the gvt they always close the most visible, helpful parts of gvt services first, so we think that we are in pain without gvt, and they never cut or shut down their crony-feeding pork projects that contribute nothing to the general well-being.
Thanks crawford for that. Fascinating and i don't think you're crazy. There's too much we don't know to say such stories are impossible or crazy. Keep em coming if you feel like sharing more!
If taxpayers own GSEs why are they traded? That will probably be one of the bigger and better arguments made by lawyers seeking an end to the 3rd amendment. I cannot think of any reasonably justifiable defense of the gvt's / Demarco's stance that the taxpayers own the GSEs. They could say they are part owners, but unless they had already shut down the public trading of shares, then shareholders still own the GSEs too. In conservatorship, there's even still a fiduciary duty to shareholders, if i understand correctly. So the fact that Demarco believes taxpayers own the GSEs is itself evidence of violation of that fiduciary duty.
Letting shares trade after the great theft happened was a clever but revealing part of Paulson's scheme. When considered along with the whole receivership vs conservatorship debate back then, the fact that this was indeed a kind of theft becomes all that much clearer. Hopefully judges will see through the supposedly all-powerful Fed gvt's arguments, smoke, and mirrors when this gets to court.
Gvt has no interest in protecting free market, at least not as much as most people would like to think. You wonder why they manipulated supply / demand. Well if you think about it, the very existence of the GSEs is an example of distorting supply / demand. i'm long fnma bc I don't think gvt will get rid of em ultimately. But in a truly free market, there would be no guarantee that any entity will buy loans from banks. And the prices of houses would probably be very different, and likely lower after an adjustment period. Any similar such subsidy has similar effects on price. Because there's a guaranteed liquidity of loans in our system, with GSEs buying them, the "true price" of loans and of homes cannot be discovered, and we don't have an actual "free market". It's a distorted market, and for political reasons. Gvt does same thing in many other areas, not just housing.
"Security reasons" is the catch-all, get out of jail free card that the ruling class gives to its own members whenever they appear to have been caught conducting the kind of robbery that is essentially their routine function.
So ben might end up testifying as a private citizen, but what good will that do anyone if, for "security reasons" he will claim he can't give the information Perry's lawyers are asking for? Or he pleads the 5th and the "records you're looking for are sealed" or some such nonsense?
If the DC / banking complex actually gets away with a) the wreckage of 2008 and b) the cover up and c) eliminating the GSEs without compensating shareholders, then would I be surprised? No. The constitution has been shredded hundreds of times in the past 15 yrs or so. But I would be disappointed a plenty! Show me Ben testifying someday, and actually giving useful and truthful testimony, and I will be pleasantly surprised.
Strong, B!
I thought some judge recently decided ben doesn't have to testify at all in the AIG case. Please correct me if I'm wrong, anyone.
Seems like we longs want demarco to stay as long as it takes, until we have a congress / prez combo that is certain to not eliminate the GSEs. We don't have that right now. There's a bipartisan group that supports eliminating the GSEs and there are some dems who want to keep them. In light of that and demarco's adamant stance on allowing congress to decide the GSEs' fate, we might have to wait a long time before release from cship. As soon as he releases them, they're exposed to greater politically motivated risk. Better to keep them in cship and hope for political sentiment to change, and hope that a court decides in our favor in the meantime.
So gvt's saying: we placed fnma in conservatorship instead of receivership because it was still solvent. It is currently more than solvent, it's making record profits. But it can't build capital because we take that money. So this company that is solvent enough to avoid receivership is not sustainable because it can't build capital.
Yeah I'd say there's a lot in that nonsensical thief's defense for a lawyer to jump on!
Why not?
Nice. Do you know what source we'll find that in?
Millstein and DeMarco speaking in DC tomorrow! A conference on future of housing finance and GSE reform.
Great baboon! If you're willing / able, feel free to update us if / when DeMarco says any important phrase.
If not, maybe post it sometime after the meeting? I don't trust what I hear from news media, but I'd be interested to hear what one person who was actually there heard.
Do we have a man at DeMarco speech? Anyone here attending? Gonna be updating us via your smartphone Ihub app during his speech?
POTUS's puppetmasters might order him to speak November before earnings again, of course.
I saw that about her and thought DARPA? CFR? What the heck is the board going to be planning for fnma now with that kind of background in its meetings? Fnma taking over financing of european houses? Will fnma now be financing all the unmanned drones as well as houses?
In reality she's probably just a very smart DC functionary who's politically connected. If anyone knows more about her, maybe about her thoughts on whether it'd be best to "wind down" or not, please let us know here.
Whose algos do you think have been controlling fnma so obviously this year? I don't pretend to know it's jpm and boa specifically, but i'd bet they've each already made a killing just trading fnma this year. So fnma is like their ex girlfriend onto whom they first dumped their financial baggage and bad loans, then broke up with, then blamed for the world's troubles, and has since been hitting up for booty calls.
Amy Alving on fnma board, from DARPA & CFR!? Wow.
What does current L2 look like? Tia
Agree 100%. That has been exactly my main concern, though I remain long. It's the way the prez's party is these days. See GM for another reason to be afraid. I'm long with the law on my side, clearly. But that doesn't necessarily mean any particular judge or congressional bill or executive order can't bypass the constitution. They do it all the time.
SAR is a technical indicator that technical traders (those who rely heavily on chart formations and patterns) use. It is designed to show whether and when an uptrend or downtrend is occurring. Of course, in real time, no such indicator can predict with 100% accuracy what trend will start with the next transaction. But just look up - technical trading and Parabolic SAR. You'll learn more that way. You can see it in action by searching for it on youtube, for example.
SAR is a technical indicator that technical traders (those who rely heavily on chart formations and patterns) use. It is designed to show whether and when an uptrend or downtrend is occurring. Of course, in real time, no such indicator can predict with 100% accuracy what trend will start with the next transaction. But just look up - technical trading and Parabolic SAR. You'll learn more that way. You can see it in action by searching for it on youtube, for example.
SAR is a technical indicator that technical traders (those who rely heavily on chart formations and patterns) use. It is designed to show whether and when an uptrend or downtrend is occurring. Of course, in real time, no such indicator can predict with 100% accuracy what trend will start with the next transaction. But just look up - technical trading and Parabolic SAR. You'll learn more that way. You can see it in action by searching for it on youtube, for example.
What tips would you give anyone who's interested in trying scalping as a main approach?
I'm only referring to what I heard about the Senate debt ceiling agreement and how it includes vast powers for the treasury...i haven't had time to look into it. Maybe those powers already exist even before the senate deal they've got today. But I thought maybe traders might have considered the treasury as backstop against hitting another debt ceiling to mean that treasury might keep fnma in c-ship into summer and beyond, because that would keep putting fnma's profits into the treasury, and contribute to delaying hitting the next debt ceiling.
Deep in debt deal is treasury's "vast powers" or some language like that enabling Treasury / Fed complex to do whatever it wants to avoid hitting debt ceiling again. I have no idea if that's causing this dip but i just heard about it myself.
Glad you're back Blue!
Long here
The scam is: add debt for the Fed, and back it with nothing but our status as global reserve currency and military dominance.
Now you can go forth with an understanding of how this nation really runs. It's only reasonable to expect the powers that be to demand that their puppets continue to increase our debt. Why would they ever want their puppets to decrease their debts to their masters? Why would they ever demand that they cut spending in any serious way? It simply will not ever happen until we are actually near the brink of losing our reserve currency status, or until the Constitution is actually enforced and our currency goes back to being run by the treasury (i.e., by the people via their elected representatives). Until then, it'll be more and more printing of dollars (QE, just watch Yellen make Bernanke seem like an amateur Printer), and higher debt ceilings and more spending. Sad to say this but I've studied the situation in great depth and I simply cannot see any end to this (until we reach that brink). DC is so thoroughly corrupted and owned, that no "movement of the people" will disrupt their abuse unless some hypothetical movement reaches truly historic intensity and power. But lacking that, The abuse will only get worse, and the feeling that no one represents us in DC will become increasingly common, as will poverty.
Looks like final fnma status still years away. Yes, a judge could expedite it. But otherwise, this CSS / CSP is not itself going to trigger fnma's release from cship. Nor will it guarantee any fnma friendly legislation will be passed ultimately. It does, however, seem to be suggesting that until any legislation is passed or lawsuits decided, the market will perceive this evolving CSS to be temporarily bullish for fnma's future prospects, and somewhat blisj for its current pps. This current upswing could end up being a temporary bump built around CSS news and expected earnings. I'm in it for longer than that. CSS at least doesn't cast any negative shadow on us. If released and not messed with by bad legislation, or if the 3rd amendment is dissolved by a judge, then it sounds like CSS might actually expand fnma's and fmcc's revenues beyond what their current functions produce. Either that, or make MBS creation more efficient, thus potentially cutting costs for the GSEs. Either way it sounds like, long term, very good news, assuming fnma ultimately survives DC's lawmakers. But can we really expect this CSS news, and whatever inside developments are happening, to sustain this pps rise for, say, many months to come? I'd say we're still ultimately waiting for a judge's decision or some legislation that's passed before we know if we can expect anything more than some good flipping chances here.
If/when fmcc and fnma pps rises closer to valuation, say, $2, then 4,5, or even $10, do you think we will see FMCC surpass FNMA by that time? Will The lower o/s and lower float of FMCC be enough for its pps to surpass the attention-grabbing and better-known FNMA?
If so, at what point along the way will fmcc and fnma pps will be equal?
Same here. i'm no great flipper. I came to fnma as a macro play, and stayed in for the 2nd run, missing many good flipping chances. But i don't have day trader status anyway, so that prevented me from even trying to flip much. After 2nd run, pps action eventually became so predictable every morning 8:30-10:30ish that I wanted to flip a little but lacked enough powder. So i paper flipped, and was ok at it, not great. I flipped 1-5 cent moves easily. I'm currently up with a core holding, down in another account, and overall I'm just long until the big political decision is made. I'm hesitant to add right now but given some additional positive info appearing sometime soon I might add a little. The buzz, at least, has lately turned enough to tempt me into adding. If I add, I will probably take some profits on any subsequent run, but Probably not from my core position. If I get good enough at paper flipping without violating non-day-trader rules, I might flip more for real, but that won't happen for some months probably.
What did hensarling say on cnn tonight?