Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
"Given the importance of the GSEs in the primary and
secondary mortgage markets today, any reform of the GSE’s
must include a clear plan for an orderly transition to a new
system that does not impair liquidity or pose a threat to
existing investors or interfere with the orderly functioning of
this vital multi-trillion dollar market. It is also imperative that
any reforms and the resultant transition to a future system do
not impair the current recovery or the long term stability of the
housing market.
"http://www.blackrock.com/corporate/en-cn/literature/whitepaper/viewpoint-housing-finance-update-081913.pdf
Thank you mrfence...
Without a doubt Fannie and Freddie are the worst, most awful, unbelievably terrible stocks in the history of the universe. Also please note surfing is a horrible sport and you never ever want to go to Yosemite Valley!
Obama has one word for all his political troubles:
"FORE!!"
Wow, so the feds are suing BOA for previous C-Wide activity after they forced BOA to buy Countrywide in the first place?!?
"Mos Eisley Spaceport - you will never find a more wretched hive of scum and villainy. We must be cautious."
Here are you winning Monsieur. Oh thank you, thank you very much...
I notice BOA is shutting down Merrill and keeping the trade name for itself. Might not have run their opinions past corporate, now their toast.
That's exactly what Freddie was set up to do.
If no reform effort happens this year eventually a court will rule in favor of the shareholder lawsuits (Where else could they go with the billions of profits piling up?)
and all the bye and bye speculation will be moot.
As others have said its now or never.
GSE reform is no slam dunk and the attempt to put on the front burner means more attention being made to its negative impact.
http://www.foxnews.com/opinion/2013/08/08/tough-truth-behind-obamas-mortgage-goals/
The race goes on, Judah...
Actually for the 2 branches of government talking about shutting this down its holding up amazingly well. As one story put it its Now or Never to quote Elvis Presley when it comes to liquidation/reform. Since Moody's concluded any legislation of FnF are unlikely at this time than that pretty much sums up the situation in spite of another throw away Obama economic speech.
To Big to Bail on.
I hope the GOP stops falling for the bait and see this as a kabuki dance to throw them off track. If they were smart (a very big if) the GOP (and smart Democrats) would move to re-privatize F&F along a leaner and more accountable basis, take the whole issue off the table for 2014 and work on the big problems confronting the middle class (jobs, immigration, tax codes, etc.).
One can dream...
Third, we should preserve access to safe and simple mortgage products like the 30-year, fixed-rate mortgage. That’s something families should be able to rely on when they make the most important purchase of their lives.
Fourth, we have to keep housing affordable for first-time homebuyers and families working to climb into the middle class. We need to strengthen the FHA so it gives today’s families the same kind of chance it gave my grandparents, and preserves that rung on the ladder of opportunity. And we need to support affordable rental housing and keep up our fight against homelessness
How is any of this accomplished without something that looks a lot like Fannie Mae and Freddie Mac???
The facts are still with going long.
http://video.foxbusiness.com/v/2589340715001/government-serious-about-getting-out-of-housing/
There is a total disconnect between what Obama says and that of his own record and the record of Mel Watts.
On the eve of the financial crisis, Watt actually proposed the creation of the regulatory agency he now seeks to run — only, he designed it not to reform Fannie and Freddie but to pressure them to underwrite even more affordable housing, exposing them to even more risk.
The bill he co-sponsored with then-banking panel Chairman Barney Frank — the Federal Housing Finance Reform Act of 2007 — would have forced the federally backed mortgage giants to meet even tougher quotas for affordable lending, while contributing to an "Affordable Housing Fund" to rebuild blighted urban areas.
"The real benefit of this bill is that it will provide a big stimulus for more affordable housing," Watt said at the time, ignoring concerns the agencies already were overexposed to low-income loans.
Whats Obama up to?
Read More At Investor's Business Daily: http://news.investors.com/ibd-editorials-viewpoint/072613-665261-mel-watt-blueprint-for-socializing-fannie-freddie-mac.htm#ixzz2b9sQrs61
Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook
Always nice to check the comment section
http://online.barrons.com/article/SB50001424052748704755304578621870811760716.html#articleTabs%3Dcomments
Good post the only thing I would add is despite his statements there is nothing in Obama style of governing that says he's serious about liquidate the GSE's.
These are the two articles most encouraging. Legislature's and Presidents can propose all sorts of things but the US has a built in brake on easy passage of any law. As the Moody assessment shows their observation is passage of reform anytime soon is not going to happen.
With each quarterly GSE income statement in the billions the rationale behind the shareholders lawsuit grows stronger. While the case for liquidation grows weaker.
When the Henserling/Croaker approach fails (its seems impossible to imagine a legislature that can't pass budgets being able to agree to take down entities as massive as Fannie and Freddie) the only reasonable option left is to re-privatize.
As other have stated on this board share price will jump to a much higher ask but under this scenario the fall back of June seems unlikely to take place a second time.
http://www.dsnews.com/articles/report-gse-reform-wont-take-shape-for-another-few-years-2013-07-29
http://dealbook.nytimes.com/2013/07/29/hedge-funds-suit-on-fannie-and-freddie-may-spell-trouble-for-u-s/?_r=0
The whole crux of FMCC going back to and surpassing its previous high will take place when the panic sets in that this company may after all's said and done survive and re-privatize. The two best article were Moody's saying legislation against the GSE's is unlikely for "years". The other article giving judicial credence and a pathway for the investor lawsuits to prevail for both common and preferred before and after 2008! (Maybe someone else can re-post both article which were within the past few days.) It takes time for these things to sink it but take off on this stock IMO will be sometime other than today.
More catalyst build up...
I agree it didn't go up 34% as it has in the past. Bummer!! I'll have to wait till another day for the giant upswings...
Wow...
If there were lots of positive articles on Fannie and Freddie your assertion would be a moot point. The fact is there are lots of negative articles but no crystal balls.
The future of the GSE's is wrapped in politics and a lot of monetary and litigious inertia. A majority of people in both parties blame the GSE's for the financial melt down. That's a false perception of course but it no more mandates the demise of Fannie and Freddie than the twice as negative public perception of Congress means its elimination.
Obama says he supports the (reform, repeal, replacement?) of the GSE's but appoints Mel Watts a radical advocate of increased low income housing loans ala Community Reinvestment Act. Now where has Obama supported anything the GOP wants if it were not likely to give him a play into a Alinskyite media driven public perception trap to skunk the Republicans?
The whole collapse of the GSE's and their negative perception was caused by their morphing into a private financial dacha for a lot of connected political types to make tons of money. For Obama or Watts the only way that system continues is the GSE's maintain the sort of safe haven off the U.S. budget refuge for investors to park their money. (That's the reason so many trusting retires and pension funds put their money there not expecting to be ripped off by the Treasury!)
For Boehner to bring the Henserling Bill to a floor vote would be a good move for the banks and the anti guvment types but bad politics. Things are way to weird and fluid to know whats going to happen but inertia is still the strongest force at work. I'll stay long.
Earlier this week I noted that I had changed my mind on the Community Reinvestment Act.
Contrary to my initial conclusion, the evidence is overwhelming that the CRA played a significant role in creating lax lending standards that fueled the housing bubble. Once I realized this, I had to abandon my suspicion that the anti-CRA case was a figment of the rhetoric of Republicans attempting to distract attention from their own role in the mortgage mess.
Read more: http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6#ixzz2aEILYfBS Old news but still true....
I'll bank on those dates!
Fortunately Obama's presidency is in disarray. His ability to influence legislation is limited by the scandals and the lack of robust economy recovery. He appears to be more a spectator to events then participant.
Screen Shot from Pop Vox https://www.popvox.com/bills/us/113/hr2767/comment/1251009
Oppose H.R. 2767: To protect American taxpayers and homeowners by creating a sustainable housing finance system for the 21st century.
Dear your representatives:
I support the protection of American shareholders/ home buying public from the liquidation of the GSE's under H.R. 2767. I do not believe the seizure of property and the termination of contractual agreements to be a liberal/conservative or American value. The GSE's maintained liquidity in the credit markets when all private sources disappeared during the Great Recession. They have returned to profitability and I cannot think of any instance in American history where profitable companies were forced into liquidation. by the US government
Screen Shot from Pop Vox https://www.popvox.com/bills/us/113/hr2767/comment/1251009
Oppose H.R. 2767: To protect American taxpayers and homeowners by creating a sustainable housing finance system for the 21st century.
Dear your representatives:
I support the protection of American shareholders/ home buying public from the liquidation of the GSE's under H.R. 2767. I do not believe the seizure of property and the termination of contractual agreements to be a liberal/conservative or American value. The GSE's maintained liquidity in the credit markets when all private sources disappeared during the Great Recession. They have returned to profitability and I cannot think of any instance in American history where profitable companies were forced into liquidation. by the US government
The FHFA sued 18 banks in 2011, accusing them of violating securities laws by misleading Fannie and Freddie about $200 billion in mortgage-backed securities they purchased.
Read more: http://www.foxbusiness.com/news/2013/07/19/us-appeals-court-will-not-intervene-in-fhfa-lawsuits-vs-banks/#ixzz2ZfJa7qbD
So the 200-B the Treasury had set aside to bail out fannie and freddie can be traced back (partially) to fraudulent MBS passed on from the banks?
So now we want to unwind the GSE's and turn more mortgage liquidity over to the same people?
Doesn't this back up the shareholder lawsuits?
Very Funny! At least someone over there has a sense of humor.
Exactly! How much of a rip off is it that the BB generation runs up the mortgage tab and then bails to leave the next generation with "More stringent mortgage loans to assure this sort of thing will never happen again." to quote the world of would be GSA liquidators in the House and Senate. The GOP for one has to stop fighting the battles of 4-5 years ago and start mapping out a post Obama return to prosperity. Winning in 2014 and 16 won't be about reforming the "mortgage market" it will be about creating wealth and jobs which from the look of Fannie and Freddie Mac's income is just what they are helping accomplish.
The difference maybe more people will see the kabuki dance aspect of the exercise and not panic. If that happens the support is pretty solid and its just sideways movement until a true catalyst takes place.
Jeb Henserling will have a nice hearing and get some good gavel time His bill will not make it out of committee. By the time this is apparent Congress will be back in budget battle mode as the debt limit will again dominate the discussion.
The major legislation achievement 2013 will still be sequester.
The watch word in 2014 for the GOP should be Do No Harm as the Congressional Elections loom. They hopefully will realize that fighting the battles of 2009 is a losing formula and seek a pro growth Return to Prosperity message that Mac and Mae are certainly a part of (and a winning message to all post baby boomers wanting their chance at The Dream).
After the mid terms if the GOP wins it will be gearing up for the Presidential Elections, ditto for the Democrat's. This means lots of posturing with only the most urgent legislation gaining traction.
In 2014 it will be six years since the financial collapse in 2016 eight and the specific reform mania it engender will be abandoned for more contemporary proposals.
Liquidating the GSE's is still highly unlikely based on the political risk but its the waiting that gets frustrating.
Newly elected Democrat President with a (54%?) margin of victory. Democrat controlled House and Senate with Nanny Pelosi and Dingy Harry Reed cracking the whip and Obama Care passed by (1) vote. All this in the aftermath of a major economic shakedown. Based on any similarities between shutting down fannie/freddie and the passage of Obama Care we're in mighty good shape for GSE survival.
Jeb Henserling proposal is the sort of "despair" news that buyers look for,its a proposal for a bill. This happens all the time every day congress is in session the difference is its about ***FANNIE MAE/ FREDDIE MAC*** ABOUT TO CROAK AND KEEL OVER !!!*** as Monster Hind would subtlety suggest. Eventually there be a factor assigned to its passage ( I thinks its 11% of all bills proposed in a session actually pass) so it would be % of 11%. Low odds to begin with and a lot of elements mitigating (and litigating) against it.
Mr. Know Whan
It would seem logical to due this all at once with little or no prior warning. A sudden end of conservatorship with some prerequisite tiding up legislation would solve a lot of problems.
"The lawsuit – filed June 10, 2013 -- alleges that the U.S. government violated the Fifth Amendment of the U.S. Constitution when, in 2008, it imposed conservatorships over Fannie Mae and Freddie Mac – both private, shareholder-owned corporations – and allegedly destroyed the value of stock held by shareholders without due process or just compensation.
Prior to the U.S. government imposing conservatorships, Fannie Mae and Freddie Mac had operated successfully for decades. Then, according to the lawsuit, the U.S. government took control of Fannie Mae and Freddie Mac away from shareholders and directed the companies to purchase subprime and other risky mortgages, leading to significant losses."
Seems straight forward as a legal case. The whole question is will Obama and Congress "get what they want" (maybe get what they deserve) or will a court put the kibosh on illegal and unjust seizure of shareholders property.