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What a read. Btw even if Corker's bill were to pass or if the GSEs are privatized somehow, or unwound, wouldn't the common shareholders likely still eventually be paid something? And didn't someone here recently estimate that in such a scenario, the amount the commons would get would be equal to approx $10-18?
The banks write the legislation and then tell their paid advocates in congress to pass them.
The media, sadly, is often paid to push certain stories for a certain period, exactly like a PR firm would do. Every once in a while it comes out that some reporter was paid, etc. So intelligent people should know that that is often how the media works; as a paid advocate like a PR agent or even lawyer. Point is that the storylines they are being paid to cover are part of a campaign, and no such campaign goes on forever. Question is will it go on long enough to do permanent damage to shareholders' interests here or not?
Care to give us a hint?
What? Didn't you hear the Bernanke's speech yesterday? After celebrating 100 years of the Fed destroying 95% of the dollar's value, he clearly explained how the Fed provides sunshine and lollipops for everyone. The Fed would never do anything bad or greedy, as you suggested. Bernanke explained how the Fed has been expanding its oversight, regulatory control, and balance sheet for the good of all mankind and puppies. We should all face east and bow to the Fed to begin each day.
Many people have learned the answer to your question since 2008. With some good DD on our gvt, it'll become less blurry. I think at least it's safe to say the long term trend in this regard will be more towards the cccp than the U.S. If so, that's sad but knowing it and expecting it will make us all somewhat better at this game.
Thanks obit for taking the time to reply and for offering some very well-worded views on the various tangible and intangible market forces.
It's very helpful to continue learning more about the whole spectrum of different psychologies and tactics among the different players in the market. I'm way up on some of my shares and way down on others. Not much powder right now with which to flip but generally I'm long, with a willingness and desire to flip a portion of my holdings along the way. I'm probably like many others who are preparing their plan A, B, and C for August.
For anyone who bought at the top during the last run, don't panic quite yet. There's a chance we'll get much closer to your entry price when August comes around. There's a chance we'll surpass it. Average down if you can, then Watch the developments carefully until August, and come up with a plan A, B, and C for exiting or adding if that's your thing (or both if you just want to reduce your exposure to fnma but still have a long view). News can come anytime, but earnings time usually results in some anticipatory pps movement before the announcement. Often, traders sell on announcement days (buy on rumor, sell on news). So you might want to sell a good portion during the anticipation in the days leading up to the earnings report. And since this is a political stock, it is relevant that congress has a long recess near the end of summer. All of those things should be taken into account as you make your plan for the only next date we know of at this point that will certainly produce some big news relevant to fnma (earnings date, which i think is supposedly august 8th but keep an eye out for any changes to that date). Good luck to all!
The Bernanke: accommodation will continue.
He's taking questions now. The Fed may change the mix of how they use their tools a bit as they continue accommodation but not until unemployment reaches 6.5% will they even begin to consider raising rates.
If we're down to only the more serious players now, and those who were pumped and under-informed are now out of fnma or are more informed about the complicated political and legal nature of GSEs, then does that suggest that the "more serious and informed" shareholders are also less likely to be impressed and swept into a buying frenzy when the August earnings report comes out?
If so, wouldn't that keep some downward pressure on pps in Aug? Or, should we expect the earnings report to attract an entirely new set of enthusiastic but less informed buyers and result in a significant increase in pps anyway, regardless of the more informed shareholders who bought in earlier and then realized that the political risk to their pps is higher than they may have known when they bought? If shareholders are more informed now, and institutions are starting to buy, shouldn't we expect the shareholders to be less moved by Aug report than we might hope? Is the expectation of Aug report really already "baked in" to fnma pps to the point where Aug might only provide a tiny bump in pps?
Obama put that aside for the sake of his party doing better in the 2014 elections, not for the sake of the economy. He wants to delay the obvious regulatory and inefficient implications of obamacare until after one more election, so he can never be held accountable for its problems.
Wouldn't they be ruled to "not have any standing" to bring suit if they didn't own any shares?
How about we share some of our Tips for using L2 with each other? It would help kill some time before the Aug earnings and help some people learn to be better traders. I'm no expert, but I've found myself mostly using L2 in a basic way, simply gauging the depth of buyers and sellers, and to get a small idea of how far and which way the pps might move in the very near future. Seeing that has prevented me from entering some positions when otherwise I thought I should. I know I'm only scratching the surface of how to use L2 though.
I understand some of the MM games that are played on L2 and can sometimes notice them as they happen. I see them flashing fake orders, etc. But There's a lot I need to learn about how to more effectively use L2! Perhaps some of the more experienced traders can share one or two examples of how they use L2?
I would guess the current real estate boom will last another year maybe two, but will slow down slowly over that time. The politically driven manipulation / control of our money supply means that the Fed's QE will maybe be eased a little, but only gradually. They wanna keep pumping as much $ into the system as possible without triggering totally uncontrollable havoc. I think even as they begin to ease up on QE, they're still gonna be printing gobs of $, and thus the current real estate boom will probably continue until the point at which the ease of borrowing money is curbed just enough to prevent a large ( or just significant enough) percentage of potential home buyers to be scared off. I don't think we're quite there yet, but I think some serious analysts are not crazy when they say the top is within sight. If the rest of our economy's fundamentals somehow steadily gain strength by that time, we will probably not see a crash like last time. But if the tightening of our money supply happens too quickly, and our other fundamentals end up not steadily growing in strength, then we'll probably see a "crash" of sorts within at least the housing sector. It's possible that if they continue with their current tighter operations and procedures, the GSEs could remain strong throughout either scenario, I think. But that is a speculative bet for sure.
Isn't it possible that this current real estate boom is just a bounce after the big long boom of the 2000s, just like stocks often bounce after dips?
What Carlin said was no joke, even though he's one of the best comedians of all time. Check out the history of our education system and you'll see that it was "modernized" in the early 20th centuries in efforts lead by the biggest industrialists and political progressives. Their often publicly stated aim was, seriously, to create different classes of people, some of whom they did not want to be good at math, some whom they did. They designed the pacing of the school day to match that of the factory work day, and they were trying to create enough people who were just smart enough to be reliable workers. Search youtube for John Taylor Gatto for instance, who's a famously unorthodox teacher who has written books about the history of our education system. You can see quotes from the progressives' meetings on education in which they themselves say what I just typed in their own words at this link if you're doubtful or curious:
Exactly. No offense meant, senior boom. Hope you didn't take it that way. When you mentioned winners and losers it just made me think of those two different meanings of the word capitalism and I thought I'd share that.
When obama thinks congress won't do what he wants he simply skips congress entirely and issues an executive order. He's taking that particular abuse of office to unprecedented heights!
I think even some 16 yr olds were buying houses back then, too! "Got a job?"
"Like, uh, Yeah, I mow lawns in the summer."
"Ok kid, here's your $300k Adjustable Rate Mortgage."
Wait a minute please w/ the bad mouthing of capitalism. Capitalism has caused, created, and spread more wealth on this planet than any other system. What we should despise is "crony capitalism", which is exactly what Paulson and Bush were up to and Obama is the absolute king of crony capitalism in America. We will probably never get rid of all the inside dealing and the distortions of the free market that gvt involvement usually creates. But let's not forget that when buyers and sellers freely engage in buying and selling, BOTH parties win. When you buy at 1.00 you could be buying from someone who bought at .80, etc. Anyway, a very interesting distinction must be made when using the word "capitalism". In America, we understand capitalism to mean free market capitalism, where one can use his $ to build a business, or where one can work his way from being poor into being rich by means of work ethic alone. In much Europe, however, the word "capitalism" describes what we in America would call "crony capitalism". And THAT is why and where "capitalism" began to be hated by some. In England, for instance, a "capitalist" was often a factory owner who was GIVEN that factory by means of some connection to royalty! It was NOT someone who invested and risked his own hard earned money on a new venture as an American "capitalist" would (yes there are usually loans taken out, I know). European "capitalists" gave a bad name to capitalism, and to this day they have a worse opinion of capitalism generally than Americans do. But we ALL hate "crony capitalism" whether it's called that or simply "capitalism". On this the 4th of July, let's try to understand the distinction between the two meanings of the word "capitalism". In an American version of capitalism, where crony capitalism ideally wouldn't exist, there would be many more winners than losers, and even the losers would usually be winners too. What we've seen, sadly, is that our gvt has helped INCREASE crony capitalism a ton lately. So the word is getting a bad name again. Don't let that happen! Let's make sure we are distinguishing between "free market capitalism" and "crony capitalism".
Any contract signed "under duress" can be challenged. Paulson's treatment of fnma in 2008 could certainly be considered "duress".
Could the argument that the conservatorship itself was illegal be strong enough to withstand the might of all the full on legislative attacks and legal defense teams that the elite can and will mount against fnma in their attempt to yet again enrich the big banks and get away with stealing wealth and assets from regular people?
I was gonna suggest everyone read mrfence's post #84043, especially any lawyers who might one day be preparing a case on behalf of us current fnma longs. But this post from nogoodtrader, and the thread pf related replies and additional DD research that have been posted should also be required reading by any such future legal team.
Yes, basically whenever there's a doubt, one should assume that whatever DC is doing is for the sake of the big banks. They're attempted reform of FNMA or anything else will benefit them first and foremost. If the obvious and logical legal obstacles in their way as they attempt to screw FNMA and its shareholders actually stand up, however, we might see FNMA reach a much higher pps!
I hadn't heard about the FRIC being in that same bill of Corker's. Is it in the same bill?
As you may have heard, there's lots of talk in DC about the gvt taking over our 401ks and IRAs. There's about $19 trillion in Americans' retirement funds, and the massively in debt gvt wants a piece of that. If they have a FRIC in the Corker bill, establishing both the FMIC and the FRIC at the same time with one bill, that would be just the kind of attention getting "big reform" the DC idiots love bc they can pretend to be heros for figuring out something so "big and complex". If it robs us of our money, then it's even better for them.
I'd imagine that if Corker's bill also includes a FRIC as well as a FMIC, then it would be such an attractive bill to the idiots in DC that they wouldn't be able to stop themselves from passing it. It would make it perhaps more likely for Corker's bill to get passed.
Please remind me or link to where I can see the FHFA saying to congress a couple of months ago that the GSEs are close to being released from c-ship. Thanks.
Im long but to answer this question is easy, I think. The corker bill, when boiled down, simply replaces the GSEs with a new entity that does the same thing, but is backed a little differently (by their donors' interests of course). So, even if the fnma model is the only one that will work, that doesn't mean that the reform bills are actually proposing anything necessarily radically different. They just want to take this opportunity to shove the GSEs Out of the picture and replace them with a new entity that does essentially the same thing. Smoke And mirrors; DC's most often used tools. So yes this model might be what's best and everyone knows it. But that might not stop DC from transferring this model to a new entity, unfortunately. I have simplified corker's bill here to try to explain my perspective. I do know his bill is different than the current model in some significant ways.
Got a link to that or was it a joke?
Im actually not short. But I am healthily skeptical and I am continuously reassessing how deeply i want to be in it, and how much of my shares i want to flip versus hold, etc. I'll definitely keep a portion that i can afford to lose in fnma long, in case the pps ever reaches anything close to what some think it could. In the meantime I really have zero faith that the politicians will do right by the shareholders, and only the barest of minimum faith that our legal system would end up saving and enforcing common shareholders' property rights, etc. But if the fundamentals win out, and for some reason the politicians decide it will benefit them more if they do the right thing with the GSEs, and if somehow the courts decide correctly, then it will have been good to be holding some fnma when that happens.
So we should put our trust and hope into a court system that said it's legal for the gvt to force us to buy something? That once said slavery was ok, and once said that eminent domain means the gvt can take your land not just for infrastructure purposes but for the sake of handing it over to someone else who has a plan for your land that will produce more tax revenue than you produce with it? The same courts that now cite foreign laws and precedents when deciding cases of U.S. law? We should trust them? They are tools of the elite establishment and the ruling class just like congress and the president is. I do hope they would rule correctly, but I wouldn't bet on it.
If our current president ever said that, his nose must have been racing ahead towards his audience at jet speed!
From 1:15:00-1:18:00 the guy says basically, (paraphrasing) "yes the commons will very likely be screwed, robbed, abused, shafted, and left out of our eventual reform. They will have no say in it, so they can just go ahead and sue us."
For anyone who is now regretting how deeply they're into fnma, perhaps the August earnings report and the (hopefully significant) boost in pps it might bring could be a good exit point to target. If i said to anyone in that situation that it's not quite yet time to panic, and to be sure to sell while the pps is still rising, I wouldn't be off base. I hope i am right though!
Thanks. Interesting stuff.
Please give me a clue as to what that monument is. I may have seen it before but i can't quite place it.
I've heard that Some people are in fnma as a sorta revenge play because of things like mortgage problems they've had since 2008. I wish them all the best of luck!
Mr fence, the event of 100 yrs ago which you referred to was nothing short of a coup. And yes, it has enormous ramifications for our properties private and public.
Thanks again obit. I have sometimes thought myself into circles on fnma as i continue to do more research, but you've offered quite a few helpful reminders of the sometimes not obvious reality of the situation. I appreciate it.
Hence the question; how is fnma supposed to ever pay back the gvt if all profits are to be paid as dividends (except for the 3 bil they get to keep), and no dividends go towards paying back the gvt?
The initial cship contract was totally illegitimate and possibly illegal in that respect. Am I missing anything, or is it sometimes helpful to boil things down this simply?
Fyi the non trailing stop loss (the regular stop loss, that is) also leaves you open to the chance that there will be no buyer at your stop loss price in the event of a fast drop in pps.
So by this analysis, you paint a picture of obama nominating watt, who will then do what obama doesn't want done once he gets the job?
But keep in mind that bank of america also gave lots of money to watt. More in total than fnma did. If BOA wants to get rid of the GSEs and replace them with one company for which BOA provides the backing, then we might see Watt go for the merging / wind down plan, as his paymasters might be demanding. Either way, I'm always amazed at how little $ it takes for donors to politicians to get what they want! They get massive ROI when they buy politicians if you really look into it.
True. I wish most people understood that the people we elect are simply robbing us blind in every way possible.