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I think this is a temporary swing...but who knows? Im sitting on cash at the moment.
1.40's in am
Naaaasty 1.58's
Im waiting to see what the a.m. looks like...im thinking gap down...then I will reload. Your thoughts?
Whats your ave pps?
Me too...dumped @1.72 today...watching and curious what the morning is going to look like?
Glad I jumped ship making a little profit...prob gap down tomorrow...I may reload then...maybe back into 1.50's for a short period of time?
Sold the other 1/2 at 1.72... on second thought, im going to wait for rentry...see how she does after this bs bill gets more media coverage...I may have sold at the wrong time today...oh well if thats the case.
I just finished selling 1/2 of my position for 1.72pps. I have a feeling small gap up tomorrow...but nothing wrong with taking a little profit off the table, hedging downside risk and replenished with dry powder.
I scooped up some preferreds today at 4.85. I think they have either bottomed or close to bottomed out for the next few months at least. we'll see...good luck
Yea, but wamu was easy pickens, different situation with gse's...
Maybe its wishful thinking, but some key players have been slowly replaced:
Lockhart gone
Gethner gone, he was a clone of Paulson, same lineage...
Bernanke will be gone soon...why is obama so eager to get rid of him, any suggestions?
Net zero approaching...Lew changes pspa allowing for recap and conservator-ship to end?
Down the road, congress can amend gse charter as they did with sallie mae, if necessary...
Either way, im still bullish at least through q3.
oh, its you again
lol...i was trying to provide some humor like someone suggested to me. sing sing no good...my voice sucks (no pun intended)lol
http://www.americanbanker.com/bankthink/why-it-would-be-a-mistake-to-unwind-fannie-and-freddie-1060106-1.html
Taxpayers – and the housing markets – would lose big if the government-sponsored enterprises Fannie Mae and Freddie Mac were dismantled.
It would be the economic equivalent of "cutting off one's nose to spite one's face."
But restructuring and re-regulating the GSEs would yield several benefits:
Taxpayers would get their investment back, plus a substantial profit
Housing markets would benefit from vastly strengthened, yet familiar, mortgage financing entities
Private parties would gain an incentive to participate in the mortgage market
By avoiding nationalization, this solution would prevent the federal debt from growing by $5 trillion dollars or more, and thus avert additional downgrades of the U.S. credit rating
Private entities would be less prone to bureaucratic involvement due to public shareholder oversight
New regulations would safeguard taxpayers
Two years ago, when I publicly predicted that the GSEs could recapitalize themselves if allowed to do so, most analysts scoffed at the notion that they could repay the $188 billion of taxpayer capital. Since then, Fannie and Freddie have already paid back 70% of the Treasury's investment. Despite this, under the terms of their conservatorship the GSEs have no repayment mechanism no matter how profitable they may become. Never mind that the term "conservatorship" implies that the assets are supposed to be conserved to pay back taxpayers and creditors in priority order. (Full disclosure: my fund has positions in the GSEs' preferred and common shares.)
The fortunes of the GSEs have turned assuredly positive. Because of improving housing markets, reversals of worst-case loss assumptions, improved loan standards and increased guarantee fees, Fannie earned $17 billion and Freddie earned $11 billion in 2012 prior to the mandated dividends and profit sweep to Treasury.
Historically the g-fees that the GSEs charged for guaranteeing conforming mortgages were 20 to 25 basis points per year, well below the threshold where others were willing to step in and assume that risk. GSE market share at that time "only" approximated 50% because many loans were nonconforming. Although g-fees have since increased to 50 to 55 basis points, GSE market share has reached a whopping 90%. This leads to two significant conclusions: 1) g-fees are still too low to attract private capital; and 2) to transition the housing market from its dependency on Uncle Sam, the GSEs ironically must first traverse a road of profitability to lure private competition. Fannie and Freddie need to further increase g-fees to entice private capital. We estimate that at 85 basis points, Fannie and Freddie will lose market share yet still earn $20 billion and $13 billion per year, respectively. The fruits of those profits ought to benefit the taxpayer first, and then, as in a free market system, creditors and equity holders. Currently, the Treasury has full control over those profits with no accountability.
Pragmatically, the remaining taxpayer investment and the old preferred stock should be converted to common equity and the common stock sold back to the public. Projected earnings suggest enterprise values of $200 billion to $300 billion. Taxpayers could realize $140 billion to $220 billion from such a sale, not counting the $132 billion that has already been paid (which should count toward repayment). Similar restructurings of taxpayer investments in AIG and General Motors reinvigorated the two companies, which are back in private hands and once again generating significant profits. We contend that the same result will occur here – if the government does what's best for taxpayers, creditors and the economy and stops waging the quixotic battles of the past.
Since 2008, politicians on both sides found the GSEs to be a convenient scapegoat for the financial crisis. They want to punish the "bad actors"at Fannie and Freddie along with other financial institutions that abused the system. But the bogeymen are no longer there. The GSEs have refocused on vanilla conforming loans, downsized, and are no longer rewarding bad behavior with skewed pay packages. Furthermore, it was the Treasury that required Fannie and Freddie to raise $18 billion of the $36 billion of old preferred outstanding between December 2007 and May 2008. Also forgotten is the fact that the community banks and retirees that bought these AA-rated securities were assured that they represented "safe" investments to guard against losses. We count at least 10 community banks that went bust directly as a result of these purchases since "conservatorship" wiped out these investments. A failure of regulation led to the financial crisis. Neither dismantling a 70-year old infrastructure that served the housing markets well, nor punishing investors who were misled by Treasury, will help our economy or encourage new private capital to come in. In fact, the existing public/private model shapes up as the best and least risky solution to ensuring a stable, recovering housing market. Our economy is caught between a rock and a hard place. Dismantling the GSEs "cold turkey" with their 90% market share would smash the housing market, put the $10 trillion residential mortgage-based securities market into a tailspin and put us right back into a Great Recession. Nationalizing the housing market would add more than $5 trillion to the existing $16.5 trillion of national debt and would continue to fully expose taxpayers to losses. Furthermore, with the GSEs dominating the market with inefficiently priced g-fees, there is simply no feasible way to attract private capital.
We have yet to see a better proposal than a better-regulated version of the current model. A proposed hybrid solution of dismantling the GSEs and replacing them with a Federal Mortgage Insurance Corp. (patterned after the FDIC) that would supposedly bring in "first-loss capital" raises serious doubts. It would shut down existing agencies only to replace them with another agency that does essentially the same thing but lacks the infrastructure built up over decades. Its g-fee would be based on a model that may or may not reflect reality despite potentially insuring 100% of the conforming market. The FMIC would be required to retain capital equal to 2.5% of the insured amount, yet it would lack Fannie and Freddie's ability to earn that capital. In order to support the current mortgage market, FMIC would need almost $150 billion and have no reasonable way of earning it. Fannie and Freddie do.
The GSEs have helped our economy for over 70 years and even in their currently hampered state they've shown that they can earn back taxpayer money and trust. Recapitalizing Fannie and Freddie while making sure they behave well is a path with far fewer risks of missteps and potential damage to the economy. And it would be the right thing to do for disenfranchised creditors and investors in a country that prides itself on the rule of law.
Michael Kao is the founder and CEO of Akanthos Capital Management, a hedge fund in Los Angeles.
http://www.americanbanker.com/bankthink/why-it-would-be-a-mistake-to-unwind-fannie-and-freddie-1060106-1.html
Taxpayers – and the housing markets – would lose big if the government-sponsored enterprises Fannie Mae and Freddie Mac were dismantled.
It would be the economic equivalent of "cutting off one's nose to spite one's face."
But restructuring and re-regulating the GSEs would yield several benefits:
Taxpayers would get their investment back, plus a substantial profit
Housing markets would benefit from vastly strengthened, yet familiar, mortgage financing entities
Private parties would gain an incentive to participate in the mortgage market
By avoiding nationalization, this solution would prevent the federal debt from growing by $5 trillion dollars or more, and thus avert additional downgrades of the U.S. credit rating
Private entities would be less prone to bureaucratic involvement due to public shareholder oversight
New regulations would safeguard taxpayers
Two years ago, when I publicly predicted that the GSEs could recapitalize themselves if allowed to do so, most analysts scoffed at the notion that they could repay the $188 billion of taxpayer capital. Since then, Fannie and Freddie have already paid back 70% of the Treasury's investment. Despite this, under the terms of their conservatorship the GSEs have no repayment mechanism no matter how profitable they may become. Never mind that the term "conservatorship" implies that the assets are supposed to be conserved to pay back taxpayers and creditors in priority order. (Full disclosure: my fund has positions in the GSEs' preferred and common shares.)
The fortunes of the GSEs have turned assuredly positive. Because of improving housing markets, reversals of worst-case loss assumptions, improved loan standards and increased guarantee fees, Fannie earned $17 billion and Freddie earned $11 billion in 2012 prior to the mandated dividends and profit sweep to Treasury.
Historically the g-fees that the GSEs charged for guaranteeing conforming mortgages were 20 to 25 basis points per year, well below the threshold where others were willing to step in and assume that risk. GSE market share at that time "only" approximated 50% because many loans were nonconforming. Although g-fees have since increased to 50 to 55 basis points, GSE market share has reached a whopping 90%. This leads to two significant conclusions: 1) g-fees are still too low to attract private capital; and 2) to transition the housing market from its dependency on Uncle Sam, the GSEs ironically must first traverse a road of profitability to lure private competition. Fannie and Freddie need to further increase g-fees to entice private capital. We estimate that at 85 basis points, Fannie and Freddie will lose market share yet still earn $20 billion and $13 billion per year, respectively. The fruits of those profits ought to benefit the taxpayer first, and then, as in a free market system, creditors and equity holders. Currently, the Treasury has full control over those profits with no accountability.
Pragmatically, the remaining taxpayer investment and the old preferred stock should be converted to common equity and the common stock sold back to the public. Projected earnings suggest enterprise values of $200 billion to $300 billion. Taxpayers could realize $140 billion to $220 billion from such a sale, not counting the $132 billion that has already been paid (which should count toward repayment). Similar restructurings of taxpayer investments in AIG and General Motors reinvigorated the two companies, which are back in private hands and once again generating significant profits. We contend that the same result will occur here – if the government does what's best for taxpayers, creditors and the economy and stops waging the quixotic battles of the past.
Since 2008, politicians on both sides found the GSEs to be a convenient scapegoat for the financial crisis. They want to punish the "bad actors"at Fannie and Freddie along with other financial institutions that abused the system. But the bogeymen are no longer there. The GSEs have refocused on vanilla conforming loans, downsized, and are no longer rewarding bad behavior with skewed pay packages. Furthermore, it was the Treasury that required Fannie and Freddie to raise $18 billion of the $36 billion of old preferred outstanding between December 2007 and May 2008. Also forgotten is the fact that the community banks and retirees that bought these AA-rated securities were assured that they represented "safe" investments to guard against losses. We count at least 10 community banks that went bust directly as a result of these purchases since "conservatorship" wiped out these investments. A failure of regulation led to the financial crisis. Neither dismantling a 70-year old infrastructure that served the housing markets well, nor punishing investors who were misled by Treasury, will help our economy or encourage new private capital to come in. In fact, the existing public/private model shapes up as the best and least risky solution to ensuring a stable, recovering housing market. Our economy is caught between a rock and a hard place. Dismantling the GSEs "cold turkey" with their 90% market share would smash the housing market, put the $10 trillion residential mortgage-based securities market into a tailspin and put us right back into a Great Recession. Nationalizing the housing market would add more than $5 trillion to the existing $16.5 trillion of national debt and would continue to fully expose taxpayers to losses. Furthermore, with the GSEs dominating the market with inefficiently priced g-fees, there is simply no feasible way to attract private capital.
We have yet to see a better proposal than a better-regulated version of the current model. A proposed hybrid solution of dismantling the GSEs and replacing them with a Federal Mortgage Insurance Corp. (patterned after the FDIC) that would supposedly bring in "first-loss capital" raises serious doubts. It would shut down existing agencies only to replace them with another agency that does essentially the same thing but lacks the infrastructure built up over decades. Its g-fee would be based on a model that may or may not reflect reality despite potentially insuring 100% of the conforming market. The FMIC would be required to retain capital equal to 2.5% of the insured amount, yet it would lack Fannie and Freddie's ability to earn that capital. In order to support the current mortgage market, FMIC would need almost $150 billion and have no reasonable way of earning it. Fannie and Freddie do.
The GSEs have helped our economy for over 70 years and even in their currently hampered state they've shown that they can earn back taxpayer money and trust. Recapitalizing Fannie and Freddie while making sure they behave well is a path with far fewer risks of missteps and potential damage to the economy. And it would be the right thing to do for disenfranchised creditors and investors in a country that prides itself on the rule of law.
Michael Kao is the founder and CEO of Akanthos Capital Management, a hedge fund in Los Angeles.
I told her i heard the train coming..she was drinking a coca cola and watching me dance a jig in the rain when she got ran over...at least she was enjoying herself when she passed.
Johnson and crappo already made a statement about legislating fha first...so it will get shelved for months at a minimum.
After today, the news should only get better between now and q2. Small gap up tomorrow imo.
Arca slurping shares for breakfast
I will hang on to my recent 1.71's for now. Nobody said it would be easy money...sideways is when many will continue to give back the gains they made during the last run...
Correction-1.75
Thats a different bill...
Imo, the corker/warner bill is a publicity stunt for unknown and newbie senators...doa...
Yes...and q2 will be good...then q3 is when the chit is going to hit the fan, taxpayer bailout will be fully repaid plus...
Not to mention johnson and crappo said they want to work on fha legislation before fannie and freddie...so it wont be on schedule for a while regardless...
Jack reed
Why dont you talk about jake reed's bill which will be released soon..or mike capuano's bill coming out...both keeping fnf around...or the numerous past bills which hensarling, mccain etc. submitted calling to abolish fnf but got shot down...most people already knew this bill was coming out and dont need you to come rescue us...you pop up here and there and always have something neg to say...
Dont stop at the people that made $8 hr trying to live like people making 70k...people making 70k wanted to like like people making 300k and so on...lol...greedy little people with short term vision...most of of country...
Shakeout time...holding tight to recent 1.71's...
closing in the 1.90's would be great. Lets see what miss fannie has in store for us today...good luck
I had a dream
I never shorted fnma and my flight never got delayed causing me to lose all the money my parents sent me for school and expenses.
I went long and monitored this volatile stock on a daily basis in my dream
When it hit 5 I pulled the trigger and turned a great profit
I then caught that huge bounce and made more money
I posted ZOOM>>>> BOOM>>>> TO DA MOON I was so excited
I made fun of the shorts who lost money and posted neg comments on the board all the time
I reloaded around 1.50 and wonder if there's going to be a third run or not, the suspense is thrilling
Then I woke up. Shit, now all I can do is check in once a week and make a neg post...i have no more money to trade with and my parents are pissed at me and have me on a short financial leash now.
Sincerely,
MissedDaBoat
It did pop and retrace last earnings release...what it will do this go around has yet to be seen...
On or before aug 9th I believe...
The bulk of the profits were from realizing +-50b in dta, 800m was from a bofa payment from the putback settlement and the rest was from reg business...out of the reg business profit, about 70% was from refi's. No reference for you, all came from memory but can be referenced if you do the research...hope that helps
Sounds good...and I will tell them I want $60pps for my commons and if they exercise the warrants they will trigger a takings lawsuit.
I know... I remember when you first showed up asking the board for advice on what to do...you're saving your work money and not putting that in here too right? Lol...taking some profit off the table here and there might not be a bad idea...good luck, I hope you do well...
Some say the commons are worthless, some say gold and others not sure...one thing that is a fact is that we are in a 3 month upwards trend with no signs of the sky falling at the moment other than chatter...
It wasnt long ago when he was screaming $10 like a monkey in heat...
You're prob right...but they are either not posting or have similar posts as yours...
you're in the clear with fnf, jump right in...
http://business.financialpost.com/2013/06/22/are-you-sure-you-can-invest-that-in-your-tfsa/?__lsa=b467-37db