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Another new multi-year low ($1.09s printing). Sub-$1 on deck
No one thought Conservatorship was practical either. Considering the GSEs had the most capital on their books than at any point in history when they were forced into Conservatorship.
Let's not forget how we got here. Once everyone understands that, anything is possible, including Receivership.
Commons are getting Canceled based on this filing by the FHFA. They specifically state there are Hedge Funds promoting both Preferred and Common stock in the GSEs and they don't want a windfall for post-Conservatorship shareholders.
$FNMA $0.50 by Friday?
$0.50 by Friday is more like it
Can you share an updated article that refutes Calabria's prior claims? Thanks!
#CurtainsForCommons
The SEC should just halt trading in Commons at this point. This is getting ridiculous! Why do they even allow $FNMA to trade any longer? Most of us know Commons are practically Worthless Junk anyway.
With Christmas already being a stressful time of year for most Average Joes, this endless selling of Common shares might push a few AJs over the ledge.
Remember, it's just money!
Oh dear. What happened to Freddie Mac today? $FMCC sitting at multi-year lows and no bounce in sight.
This is getting really ugly. I'm glad I sold at $1.90 in March. This sucker has almost been cut in half since then.
#YIKES
Over 4:1 Sells:Buys. A new downtrend is starting, this is definitely not the end of the old trend.
Look at that 80k Sell Block -- OH, MY, GOD!!
Brace yourselves, the bottom is about to fall out from the Average Joes. I would expect a strong bounce around $0.80, but that will be a trader's bounce.
The worst is yet to come
FHFA will remain GSE's Regulator either way, though. So even if we're lucky enough to exit Conservatorship, FHFA as Regulator could put punishing capital requirements on the GSEs which would cripple the potential shareholder gains.
You can't get FHFA fully out of the picture at this point.
Your nomination hasn't been announced yet, nice try! I do agree the clock is ticking for Commons either way.
But let's keep things factual, there's already way too much misinformation to sift through here.
Just this morning I had to read through five posts about Ginnie Mae merging with the GSEs. And it's from the same four posters that regularly post blatant lies.
$1.11, new Multi-Year Lows again. Receivership looking likely all things considered.
Is sub-$0.50 $FNMA possible by end of year? I'm starting to think Paulson and Berkowitz know something others don't and are intentionally shorting Commons into the ground to make Moelis look that much more appealing.
New Multi-Year Lows! Congrats $FNMA Bag Holders. If there was ever a time to release the SEC Letter, I couldn't think of a better one than now ...
... Oh wait! It was pronounced fake when it was revealed that the SEC has to publicly post all comments on their website. So no individual would have information that isn't readily available to everyone else
#CurtainsForCommons
Wells Fargo might also be joining the merger. There's another rumor suggesting Ackman will merge his hedge fund with the GSEs also. And don't forget Icahn! It's been suggested Icahn is going to buy a 30% stake in Commons.
Lastly, Mr. Warren Buffett has expressed interest in merging Berkshire Hathaway with Fannie & Freddie also.
Commons should be trading over $2,000 on this news alone
Agreed. Moelis is the best-case scenario Common shareholders can hope for.
The Market is suggesting whatever Plan is being discussed by the Admin will cripple post-Conservatorship Common shareholders.
Assuming existing Commons aren't Cancelled, the necessary Capital Raises will cap Commons for years to come.
#AverageJoesForMoelis
I can confirm this is factual. Mulvaney COS
Pre-market suggests new multi-year lows will be set today. $FNMA is right on track to go sub-$1 just as Santa Claus comes to town.
Average Joe's should be asking for money for Christmas so they can buy more cheapies.
Quite likely you'll get your buy orders filled in the near-term. With $FNMA being down ~60% YTD, a lot of investors are feeling the crunch.
Tax loss selling is likely to increase and that will surely drive the price to sub-$1.
Just don't get suckered into the Average Joe Plan (aka $FNMA to $1,000). There's a lot of hedge funds impersonating regular investors in order to offload the remainder of their GSE Common holdings while they Rotate into Preferreds.
#SayNoToAverageJoe
Don't rule-out Watt pulling a surprise Receivership farewell to shareholders on his last day as the FHFA Director. I think a lot of people are discounting this possibility, but it's a very real one.
Excellent points about Receivership. The GSEs are severely under-capitalized by the original conservatorship capital framework. That alone will allow any FHFA Director to declare Receivership.
"But they're profitable, and the Government won't want all their debt on their books!" As you said, Profitability doesn't matter. Not to mention, any Receivership would likely be structured so the Newco takes on a large majority of the GSE's existing obligations, so that's a non-issue.
The uneducated GSE investors are about to get a lesson in Corporate Finance
Excellent analysis. Let the Sweep continue, then Receivership. It's really no difference to Jr. Preferreds at this point. We know we're getting paid more than where our stocks are currently trading.
Commons, on the other hand, have no idea. The uncertainty has never been greater for them. They could've had Moelis, but they demanded $100 ($1,000?) per share and may soon be staring at the dreaded $FNMAQ and sub-$0.10 shares.
GLTA
Is Josh Rosner in the FHFA? Treasury? SCOTUS? I thought not. While Josh may have some great insight, his reassurance Receivership is not being discussed should be taken with a grain of salt.
He's just as much on the outside as you and I. Although, I'm not really on the outside, just pretending to be
Wild Bill was smart and hedged his bet, so he should be okay. At worst, he comes out around break-even -- assuming Commons get Cancelled in Receivership and Prefs get paid out close to Par.
Sadly, not many of the Average Joe's followed his lead and remained adamant about their $100 ($1,000?) per share pay day.
#PreferredsForAJP
GSE Receivership will surely have widespread global repercussions -- Global economic collapse, People with pitchforks in the streets, Congressmen hanging from lamp posts, you name it!
Back in reality, Receivership will only affect the handful of Average Joe's that went all-in on Commons and ended up having to declare bankruptcy.
I just hope the folks that keep averaging down and buying the "cheapies" don't lose their homes, spouses, etc. Just remember, it's only money! Don't do anything crazy when you lose it all ...
Freddie Preferreds usually trade at a discount to Fannie's. Considering Freddie is positioned better both financially and with the added benefit of the Common Securitization Platform (CSP), Freddie should perform better in the near term. But I think it will balance itself out and Fannie will regain the lead in the long term.
I'm 75% Freddie Preferreds and 25% Fannie Preferreds.
This isn't a ruling from the Judge, only a Plaintiff's filing. Of course it's going to sound incredibly great for shareholders; unfortunately, none of the damning information that's been brought in front of the Courts thus far has mattered.
#PreferredLifeIsGood
Warrants were part of the original bailout deal. The Statute of Limitations has LONG passed on challenging them, they're not going anywhere. I believe the Washington Federal case is the only one that challenges the Warrants, and that case has been Stayed indefinitely.
So, no new lawsuits will be brought forth when the Treasury exercises its Warrants.
And if you think the Warrants are Double Dipping, it's still quite possible they Triple Dip when they deem the Sr. Preferreds as not being paid off either. Which is still a quite high probability considering the court rulings shareholders have faced thus far
$FNMA looking like an EKG, barely alive though. Someone please get a pulse to make sure she's still breathing. You would think with the promise of $100 ($1,000?) per share, people would be loading the boat!
What the heck is wrong with this worthless junk stock? Someone obviously knows something we don't, and it's likely very bad for Common shareholders.
It's coming! Life is good
- Simple Jeff
Common shareholders haven't been very lucky this year. I hope this "Luck" doesn't continue or it will surely be Curtains for Commons.
Can you show any supporting document stating the Warrants are illegal? As per my signature, Treasury says otherwise.
EPS won't be anywhere near that once Warrants get exercised. Earnings will be capped under a Utility Model with lower G-Fees.
We're looking at a maximum of $12 for Commons, but likely a whole lot lower. $4-7 seems like the most likely post-Conservatorship price range.
#CommonsAreCapped
Will $FNMA Set New Multi-Year Lows Today?
Knowing what we all know now, all signs point to "YES".
There's only gamblers left holding Commons at this point. Praying for a 100x (some for a 1000x), but they might end up with a Goose Egg -- and not a Golden one like the Treasury got.
- Simple Jeff
Exactly! I thought $1,000 was the bare minimum that shareholders are expecting as per the Average Joe Plan. There were rumors of AJP v2 coming out, but I think one of the original authors (CBS) went off on his own tangent when he declared the Warrants were actually legal by stating "the Government is aligned to Common shareholders due to the Warrants." Since then, the founding fathers of AJP have gone their separate ways.
It will be interesting to see if an Average Joe Plan v2 ever gets released. I would love to dig into the juicy details about how Commons should be valued at $1,500+ now due to the additional suffering shareholders have had to endure.
And don't forget about the Super Secret Escrow Account with the NWS money waiting to be returned to the GSEs. That could push the intrinsic value of Commons closer to $2,000 per share.
I want the money and I fully endorse the Not Your Average Joseph Plan as long as Commons are valued at $500+. No in-depth analysis required, just value Commons at $500 and everyone wins!
You're forgetting the hierarchy. Preferreds come before Commons. Considering there's ~$33B in Jr. Preferreds, there will be $0 for Commons if the $3B buffer is all the companies have when Receivership is announced.
25,000 Share Sell Block. Things are heating up!
You can get the best of both worlds if the junior preferreds are offered a conversion, because it would have to be voluntary and thus at a premium to what you could get in the market.
Many see par as the ceiling for the juniors, but the plaintiffs will be starting their negotiations at par plus back dividends, interest, etc. so they might be able to get more, especially in a conversion scenario.
- Simple Jeff