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"substantive action appears to be many years off." 10 years, 20 years a 100 years ???
That is an excellent post from BadCuda I've already plastered it all over Henserling's Facebook Page and on mine. All longs should copy and paste this as a warning to how destructive to middle class wealth eliminating the GSE's can be...
http://finance.yahoo.com/blogs/talking-numbers/bove-government-destroy-american-mortgages-permanently-181249759.html
"It is no longer the goal of the United States government that every household should have its own home," say Bove. "In my view, that's a call for a return of public housing and all of the ills that went with public housing."
Gray soulless socialist high rise structures with solar panels and wind mills?
Imagine Obama-Caring the housing and mortgages market with whole new entities.
Proponents have described a full transition from the GSE to the proposed replacements "as the most complex process in government history".
There's 2 movement bumps on the stock graph line how the heck did they get there ?!? Maybe a caterpillars walking through?
Like "shorts" you'd think the feds have a vested interest in tamping down a run. If this moves up too much let alone is re-listed on the big board their is no stopping its recovery.
I get the difference, even more dramatic then the "implied guarantee" for Fannie, Freddie.
What gets me is how the detractors talk about the GSE's "subsidizing" home ownership like their getting money from the feds outside of the bail out which is turning out to be a net gain for the treasury.
You'd think that would constitute a reason to celebrate!
The capital FnF can raise to create so much liquidity in the mortgage market (and stability) on their own is awesome.
The more I study it the more nonsensical is the wind down talk.
As we've seen in previous financial crisis anything can be bailed out by the feds, Chrysler in the 1980's, New York in the 70's and recently GM and the various investments banks.
The GSE's have a "government guarantee" just as the banks do with FDIC both are designed for stability in the financial markets.
All I can discern is the implied fed backing for the FnF's means they are a preferred class of security investment which helps keep intrest on their products lower than open market and mortgage credit a the best rates.
It seems the bail out to Fannie and Freddie was way better than if the feds found themselves bailing out all the major mortgage banks and a lot less of a freak out to the market and the public.
I assume the 186- B went to paying the bills and keeping the system in operation while everything else was in potential free fall.
Seems like it worked IMO...
"Fannie and Freddie are the largest consumers of mortgage loans, mortgage servicing, foreclosure law firms, and a host of other housing-related services. They have power. If they want to stop abusive practices, they can easily become the most powerful mortgage activists in the country.
“It will be a hell of a lot easier for Fannie and Freddie to police the mortgages they buy than for whatever oversight agency exists to police mortgage-backed securities created by third parties,” Dean Baker says."
I've been thinking the GSE's are a "layer of protection" between the hubris of the government and the driving motivation for profit of the Banks. Taking it away leaves both culprits with less accountability.
Watching http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.LiveStream&hearing_id=6d5a0150-3df0-4a8d-8151-47ffb84a7580 should only be done by those in good health and after consulting with your physician. Excessive viewing may cause heart palpitations and potential brain damage.
"If you like your Fannie Mae, Freddie Mac, you can keep your Fannie Mae, Freddie Mac!"
The FnF's are worth billions in market share how do they get off the OTC and back on the big boards?
I suppose anything is possible with a gargantuan government and yes without major changes in policy the feds could hang onto the FnF and continue to print money Weimar Republic style There are in the end only two ways forward: limiting the scope of government and accelerating economic activity are the only ways out of this mess for ourselves and our children.
There's a point of diminishing returns under this scenario as the overall economy falters. The feds have to lop off big sections of administrative State. Holding onto the FnF would be transparently desperate.
Its always interesting when a stock gets good news and then tanks. You got to think that the limited shares and presence of hedge funds might just be a factor. There are always going to be us retail investors to scare off and fleece. Nothing has changed about the upside for the FnF other than a way forward is taking shape. Got to wonder if a court ruling supporting the lawsuits is going to create a major sell off!
Checkmate
Basically correct accept the caveat about the lawsuits. Once revenue start to exceed (in the Billions) the bailout the pressure will become explosive for a judicial if not political resolution.
It doesn't have that far to move up to hit a "blue sky" breakout.
This stock is like superman crawling away from kriptonite. Every day puts more distance and positive reports separating it from the original economic collapse mean it gains in market stability and staying power.
Hello, hello, is anyone out there? Help I'm a rock!
Hammer Friday?
If we see anything like a hammer form on Friday or a decent candle it may well be history repeating itself...
A spinning top would have a smaller body, is it a dark cloud?
"Senator Bob Corker, a Tennessee Republican, was diplomatic yesterday when asked about Cruz and the Senate colleagues who were part of his fight, including Senator Mike Lee of Utah.
“I can only monitor my own conduct, if you will. I came here as a fiscal conservative,” Corker said in an interview. “I’m a substance guy. I’m a policy guy. I’m not the kind of guy to try to capture flashy objects.”
Bloomberg Oct. 16, 2013 I doubt these guys are going to be bosom buddies all of a sudden...
Maybe running over students in Tiananmen Square after starving their relatives in the Great Leap Forward will prove our worth.
I want to buy ten gazillion shares at.000000000001. Here is my penny.
Those deals totaled just $15.3 billion in private-label originations—a drop in the bucket compared to the $6.7 trillion in total mortgage securitizations by Fannie and Freddie.
Wow, another confirmation on Fannie and Freddie going no where but UP...
What?? A bit dated...
There's about 3.5 trillion in mortgages and 200+ years of legal precedent "guaranteeing" the survival of this stock. I like those odds for a common trading under $2.00.
The government borrows about 30-35% of what it spends. To default means the Treasury "chooses" to not pay monies owed on previous debt. The choice is not depended on raising or not raising the debt ceiling its strictly an allocation question.
Excellent presentation, conservatorship is legally doomed. I doubt things will wait for a court to rule as such.
Just takes an "event" and then panic buying.
Hopefully that spinning top from last week turns into Green and Growing Candles!
"Anything less than 100 percent government backstop is going to raise questions about whether fixed income investors are really going to be there to pick up the slack and to buy those securities."
http://www.cnbc.com/id/101018586
"The positive side of renting" Please, renting is what you do when your part time job or student loans are keeping you out of the housing market or you get rent stipend from the military. The majority of people logically want to (own) their own homes. That is a very good thing to keep around and a good argument for maintaining the FnF's.
The lack of attention to housing finance reform by Congress reinforces the belief that the Protecting American Taxpayers and Homeowners Act faces a steep climb to floor consideration and any sort of mortgage finance reform efforts will take a backseat for the remainder of the year.
http://www.housingwire.com/articles/26732-gse-reform-unlikely-until-2014
68% increase in revenues, 1800 more people on payroll, and what 38-B in annual income and there are doubts about the matrix of this business model?
Strong home ownership is the linchpin of the middle class. Lincoln supported this with the Homestead Act. FDR and subsequent leadership reinforced it with the Home Mortgage Deduction and entities like Fannie and Freddie. There needs to be a third wave based on access to ownership of the driving forces of economic prosperity but that's for another board.
"There is little information available about who holds GSE stock, bonds, and MBSs. The Fed
reports statistics for combined ownership of government agency and GSE debt and GSE MBSs.
At the end of the first quarter of 2013, non-U.S. investors held $1.1 trillion of $7.6 trillion agency
and GSE securities.70 Other large investors were U.S.-chartered depository institutions ($1.7
trillion), the Fed ($1.1 trillion), mutual funds ($1.0 trillion), and the GSEs themselves ($348
billion)."
Its always interesting to read this sort of stuff when things look funky. So there is 7.6 trillion in GSE (agency and security?!) that's 1/2 the US annual GDP. There seems to be trillions of reasons for this stock to recover and the feds to tread lightly on the GSE model.
4 Million shares traded on a stock of what (600 Million commons?)
The reality is no one is buying or selling but penny pushers.
Classic Hold pattern.