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Good Morning, longs!eom
John Hempton, who manages a hedge fund called Bronte Capital, argues Treasury has trampled on the fifth amendment rights of private shareholders, which prohibit the taking of private property for public use without just compensation.
http://finance.yahoo.com/news/barney-frank-addresses-fannie-freddie-124600570.html
Fair enough, but what makes you think a short position is the long term goal of the hedges? Many cases it is. You're right to feel a bit off put by that, imo.
They just haven't been vocal yet. Not ready yet. Right now, I believe, they are shorting to shake the weak hands, and left over flippers. The Doji today confirmed a lot for me.
Then this 5th amendment issue might take a front seat in the scheme of things.
Just my opinion on all this.
Good post, btw. Honesty is always appropriate.
Matter of time, imo. Sooner than later. The puzzle pieces fit together.
Barney Frank is mad. Very mad.
That alone makes me smile when thinking about the puzzle pieces.
IF. If there is a wind down, then the preferred shares are safer. They get paid first, ahead of the common. In fact, that is what TheStreet started spamming on the 21st, when we spiked to 1.47 then crashed after their "insight". Looking back, it's meaningless as a research point. If one is investing in Fannie, it's because of the possibility of getting out from under the conservatorship. If that happens, then the commons reap the most reward by far. They're only riskier because of this schedule of payment factor assuming Fannie is wound down.
I don't believe that is going to happen. My opinion.
The Blue Exchange = FNMA ground zero. Thank you for inviting me, Blue.
I'll mark my first post by saying this: We have a base. We have stealth accumulation. The dollar is coming. And we all know what that means.
Let's enjoy the ride, boys.
Phil, from what I've read about your accumulation, I wish I could be in your position lol. I'm pretty small time compared to you, it seems.
I've been out of risk/reward investments since 07 when I started seeing the bubble become stressed and I went all precious metal. Granted, I think we're in another one, but I don't see a correction for at least 4 years or so.
Until then, I'm back. ;)
Hopefully, I'm wrong there.
This is why I'm so confident in our PPS base. All day I saw, essentially, the same thing. We seem to be in a process of getting all the weak hands to give their shares to strong hands. It's being done carefully.
Algorithmicly, imo.
This accumulation seems to be happening under the radar. The pros are not going to spike the price during a time after a great earnings report and huge buzz. They let the flippers do that. Then they take the shares from the flippers. Steady accumulation is done in exactly the way I witnessed today.
If the former trend continued without it, I believe we'd be looking at the high 0.70s tonight.
Great observations, Blue. I stand with you on them.
Exactly! But then there will be "something that still needs to be done." That's where the bill not passing comes into play as a card. If it can't be passed, then Congress will need to figure out what to do as a response. It gets the discussion going. Then boom!!! The deferred tax assets hit the books. Government dividend profits get near the bailout total.
That new discussion is where everything changes (imo). That is when Obama can come out and claim his trophy of saving the housing industry. He gets no blame for not keeping to his past statements about a wind down because this bill gets stopped. Not his fault. Bipartisan. A new dawn appears as housing shifts to much much better levels/shape.
The new political villain becomes the banks that shifted the debt (the lawsuits were filed for a reason at this time, imo). They take the fall for the reversal of wind down, and conservatorship is lifted.
The puzzle pieces are on the table.
Again, ALL just my speculation and complete guess.
A group of lawmakers including Warren, Warner, and Senator David Vitter, a Louisiana Republican, on March 14 introduced a bill that would ensure Fannie Mae and Freddie Mac couldn’t emerge from government control even if they end up paying more to the Treasury than they took in aid. The measure would ban sales of senior-ranking U.S. Treasury-owned preferred shares without congressional approval. It also includes a provision banning the use of fee increases at the enterprises to fund the government.
“I think this is an important development,” Julia Gordon, director of housing finance and policy at the Center for American Progress, a group aligned with Democrats. “If the guarantee fee can’t be used as a pay-for, that removes the incentive for keeping the status quo.”
The bill's motivation is misleading, in my opinion. I'll explain why.
5th amendment:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
There is a constitutional issue in keeping Fannie under conservatorship after the government profit exceeds the bailout. Fannie and Freddie have historically been backed by the government. The government had to step in to keep their end of the bargain. No one expected a pay back to happen. But now, it's in sight. According to that mutual synergy of government and Fannie/Freddie, then the bailout, after being paid back, should (IT LOOKS LIKE TO ME! SPECULATION....in the end) thereafter constitutionally release it back to it's former state. If not, then it is an exploitation of the BACKING the government promised it. Again -- my opinion. I'm not a lawyer or certified to give any financial advice.
There are shareholders. If there were no shareholders to begin with, then the constitutional issue would not be a compromise on the "has been" plan to wind down.
If the government somehow insists on the wind down, then, it seems to me, there would then be a class action lawsuit submitted by the shareholders citing the 5th.
The wind down is a dead end, in my opinion.
Hence the $200 billion lawsuit against the banks. Interesting timing there. ;)
That's why we get a bargain bin deal here. It's not apparent what the future of Fannie and Freddie is yet. Apparent is the key word. You have to dig deep to figure out how all the pieces fit.
• Deferred Tax Assets for a rainy day.
• HUGE lawsuit on multiple banks to shift bad debt blame -- The Treasury is the boss.. and they let it happen. hmmmmmmmmmmm....
• 10K recognition of DTAs, and their carrot on a stick nature for PPS.
• Multiple year projected profitability.
• 5th Amendment issue in keeping such a company under conservatorship past payment in full.
Most investors still believe the potential of a wind down, thus the common shares getting paid AFTER the preferred. It's what Washington has been talking about for years now. Hell, just about 36 hours ago, the WSJ put out an article talking about the current "blur" of Fannie's fate.
http://online.wsj.com/article/SB10001424127887323611604578398273539675906.html?KEYWORDS=fannie+mae
The change of mainstream viewpoint is just starting to turn around. After years of the same thing being said over and over again, it's a slow process. In the mean time, the puzzle makers are, imo, beginning to accumulate.
That blur will slowly and steadily come into focus.
imo.
I'm honored, Blue! You guys as well! Thank you! When FNMA hit's $100, us longs should have a party in Vegas. lol
(now I wish I could correct my grammatical errors haha)
Wow, thx Blue. And thank you for being such a powerful and informative presence on this board. Already following ya ;)
We'll get there. This is a story book stock.
This is the most important part of the 10-K, imo:
This is why I believe there will be slow accumulation up until may 10th when the next earnings have to be released. Though, I believe it will come either on Tuesday or Thursday that week (May 7th or May 9th).
Right now, I think larger investors are accumulating on down notes here and there. Slowly, this will cause pressure toward that dollar point. After the dollar point, various limitations on certain institutions are met... then some real buying can begin.
The current stabilization of FNMA is helping. Today was very healthy. I didn't expect today to be green because of (I know some people hate it) the technicals, and MACD. But if you're following that chart, you realize that today's outcome was actually very very good, considering what those same technicals were hinting.
That said, this is the OTC; and there are lest stringent rules than the big boards. Games can be played during this lull period.
The huge buying pressure could start at any moment; and out of nowhere. I believe it's coming, and before that week of May. I think we'll be fairly sideways until a couple more criteria are met. Could happen tomorrow, could happen next week. Could happen two weeks from now. There is no telling.
During the process leading to that moment, the weak hands will give their shares to stronger hands. This is already happening. And hence today was actually really a very good day.
I was expecting mid .70s today, honestly. The fact that it's not there tells me that the sells are being slowly accumulated. That is to say, not accumulated at a rate that will show itself in big blocks. And algorithmic way. ;) As to not move the price much from any downward trend.
This day tells me we are in good shape. No one likes a red day. But you have to understand how bad it could have been today. That part is over, imo.
We're through the rough.
The government cannot hold us hostage forever (5th amendment) if we're profitable and fully paid back. The lawsuits on the banks are very telling. A shift of blame for the new plan. I think unwinding is out of the picture now. Political face saving is in order. In the end, we are freed. This picture will become more and more apparent to the mainstream public as each day passes.
Again, all my own speculation. Don't buy or sell or trade based on what my novice guesses are.
Yes, I got confirmation as well for the May 9th date. May 10th as latest for next earnings.
Oh well. That April 19th yahoo info was too good to be true, I suppose.
Yes, but RAFF and NITE are sitting behind the curtain. Looks to me like RAFF will hit best bid after open. Just a guess.
RAFF is sitting at 0.883 on bid. I like that. I hope they short trap hard.
Let's go FNMA!! eom
Where do you think I disagree with you?
I'll wait for the citation. Please stop needlessly attacking me.
Charting is certainly not a means to investment. Not what-so-ever. I talk about FNMA in two ways: tomorrow, and long term.
Some people might get confused by that.
Long term is really all that matters. But it's boring to just post about it all day here. If we do that, and we hit a dip day, then the board loses legitimacy, and everyone thinks we're talking out our asses. Talking about the reality of day to day, and being honest about our speculations, in such, is what I feel is important. There are a lot of new investors here with a lot of short term questions. Thus, the discussion presents itself. Dips happen. Huge run ups happen. No one can exactly predict them. But we can talk about our speculations and why. Or we can ignore it completely and just talk profits and long term.
I don't know. Debatable.
Just my opinion.
It's true that the charts only provide a visual aid for what is seen by all. Some people can know what it all means without the charts. Hell, some people don't even need lvl 2 to see what's going on.
The charts don't dictate anything. They just show what everyone has seen. From there, we can use it as a citation, or not. I think it's an interesting tool. But hardly a fortune teller.
After all, this is a message board to discuss opinions. Looking at a chart; talking about opinions.. this board seems to fit the bill.
I hate feeling like a basher even though I'm so far from it it's comical. Makes it difficult to post personal opinion.
Sorry if I've offended anyone.
Regardless of any of this stuff, I feel FNMA is going to make us all a lot of money.
I don't form candlesticks, nor do I use them. In fact, most of my flips are done with other stocks so I can accumulate more FNMA on the lows. Knowing the lows and when they may occur is an important part of my trading strategy.
I'm a fellow investor, ~Blue~, there's no need to accuse me of these things.
I do flip, but not so much with FNMA. It could take off past that dollar mark at any time.
I'm not a chart trader really. I generally find stocks based on dips with approaching potential for positive turn arounds. Then, the chart becomes handy to call lows and highs for limit orders if I decided to flip.
But when I flip, it is for accumulation. I could sit on shares, or gain more. I choose to gain more if there is volatility.
When I chart, I have no basic fundamental guidelines other than trial and error until I find the pattern to look for. Each stock provides it's own charting fundamentals in this way.
Yet that is what the charts say as well. It's not all bad news in the short term. Don't hate the chart. In the end, the market is all psychology. The charts follow it. And people follow the charts. A feedback, of sorts, happens. No stock escapes it. News can alter things, of course, but it is what it is.
Even with my evil charts, I still see a possibility of finding $1.00+ support tomorrow.
I just need to get a fix on when the earnings are actually being released.
I know, ~Blue~. And those same profits and fundamentals are going to turn FNMA into a rising phoenix eventually, imo.
I just don't want to say it's going to be up every day. If May 9th is earnings day, there are games that could be played.
Year end, I see this at 20 dollars.
The in-between is the fun part to analyze. That's all.
ospreyeye for the win on this post.
Though I prefer MACD over candles, I don't discount the charts for what they tell. More than one way to skin a cat, as they say.
What do you make of the chart today? Gap up then to bearish? The dips here are making life easy to stack up a pile of free shares for the long haul.
MACD is looking ...difficult. Candles are saying bear. But what do you think?
edit: nevermind lol, just saw the post you made before the one I quoted.
Nitwit, my favorite chartist!
You're gonna need some balls of steel on this one. ;)
That's FNMA in a nutshell. There is no way around it, imo. We have 2-3+ years of solid profitability ahead of us, it looks like. The bailout seems almost certainly timelined to be be paid off. As much as the government would love to have this piggy bank, the 5th amendment prohibits it, as does politics. No one thought this situation would happen. Mainstream hasn't caught up yet.
But they will.
We're just in early. ;)
GLTA longs!
A little chart analysis.
I agree with you MrDD.
This is the window to do it. I've yet to get a straight answer on when the next earnings will be published. Yahoo, yesterday, stated 4/19 -- but has today turned to "N/A". Bloomberg is sitting on 5/9.
Yahoo yesterday:
Yahoo today:
I believe I'll have a straight answer by tomorrow. However, if May 9th is the next earnings, we're in for some dippage, imo.
A little MACD analysis here:
Correcting for the $1.47 spike, and the intense negative press and panic pressure of the day, I believe we are under blue. This is also confirmed by:
I think this puts us at an intense day tomorrow. I would get your flipper hat on if you want another stack of free shares. I can't help thinking that this kind of pressure at the dollar mark has been planned. From what I see; this is trending to the dollar mark, even slightly over, then crashes hard from ..whatever is going on here. Not sure if any institutions will be willing to buy up when that dollar mark is passed with such downward pressure. Perhaps tomorrow is meant to try and show investors that the dollar mark doesn't matter. A head fake, basically. Make us not trust the dollar mark when negative pressure isn't on it next time around.
It's a very very confusing chart with all the offsets the 21st caused. I don't want to end up a self fulfilled prophet on this, but I have to say what I think. If earnings aren't until 5/9, then tomorrow might top at like, $1.03 and then crash to mid $0.80s and then the $0.70s the next day following another gap and short run to upper $0.80s, low $0.90s. I can't see it lower than $0.63-$0.65 before the next run up, though. Until I can get a straight answer from Fannie's IR on the scheduled release, it's difficult to tell. If earnings are actually on the 19th of April, then I think we legitimately test the dollar mark, and find new support.
Please; again, this is all speculation. I'm just another dumb poster guessing and speculating. Don't buy or sell based on anything I've said. Not just saying this as a disclaimer. I don't want to lose anyone any money because they trust what I happen to think.
Like I've been saying. Don't stress on the dips. Earnings in May might delay a further reward on FNMA, but the DD is sound from where I stand.
Do what you must; play it safe, and be well.
FNMA goes book value because Obama needs the House in 2014. The public is stupid. We need visual aids. Fannie and Freddie having paid back the bailout money, and being set free, while blaming the banks (citation: the 200 billion dollar lawsuit that was filed) would allow Obama to say he saved the auto industry and the housing industry...with a trophy to prove it.
There is also a looming 5th amendment issue if the government attempts to keep Fannie and Freddie under conservatorship after the money is paid back.
nor shall private property be taken for public use, without just compensation.
Damn, I wish I had favorited the article where a hedge fund manager had made that point. Can't find it now.... but Washington knows that this issue is perhaps on the table. That is why we now have the shift of blame lawsuit against the banks. Make no mistake; the final decisions at Fannie and Freddie are made by the treasury department. A target to refocus the public scorn when Washington lifts us out of conservatorship.
This explains why they didn't immediately use all the DTAs in the last 10-K.
It all seems to be playing out.
And I don't see the trend of this play going in the direction of a wind down anymore.
All of the above is simply my speculative opinion.
My analysis from last night so far has been pretty much spot on.
btw, I can't respond to private messages. Haven't gotten into message boards in 10 years, but am starting to like this. Maybe I'll subscribe soon. Could be fun talking about this on the way up.
In response to one PM: RAFF is a market maker. If you have access to real time level 2 quotes, watch when they get on the bid. See what happens, and you'll know what I'm talking about. Could be way off; but I notice certain things about certain MMs. RAFF doesn't seem to play for the dark side lol. That's all.
The shift of "blame" is being taken off Fannie and Freddie. Why else would the government have allowed this law suit? Redemption of political points when "the housing market is saved because of Obama".
Not to mention a certain hedge fund rep stating, yesterday, that there is a 5th amendment issue to holding Fannie and Freddie in conservatorship after repayment.
When the institutions start jumping in, it's over for the shorts.
The earnings start to matter as soon as the threshold of public opinion turns to, "omg, they could pay off the bailout and come out of conservatorship".
The market thinks about, maybe 6-8 months in advance. As soon as it's realized that they could reasonably come out of this, the earnings can translate to PPS.
That's when we can potentially start hitting 17-20 per share.
Now, we have this WSJ article talking about a blur between the assumed future of Fannie and Freddie and the current situation.
Now, we have this NYT article talking about a "timeline" of repayment.
I doubt this is a coincidence. These are both HUGE.
What's even better, is that Barney Frank is mad.
Get ready.
My charts say yes.. well let me rephrase that. Plummet is the wrong word. Dip. But, the stock market is all psychology. Shorts included. Tonight, there is an onslaught of positive press all over the place via outlets I didn't think would report this in such a way. I didn't expect it. I usually trust my charts, but I'm now thinking gap a 0.95, dip to 0.84 - 0.87, then the dollar test gets blown away after lunch. All speculation, of course.
A lot of eyes will be on this stock by April 19th, I believe. It's history will be scoured through. The MMs will need to cover all the measures they may have taken, if any. MMs like UBSS surely don't want another fine like they got in 2011. Not that I'm accusing them of any wrong doing at all. I just know they probably would want to be on the up and up when the next earnings report comes out on the scheduled day of 4/19.
BTW... watch RAFF. Watch if they hit the bid. I like RAFF. RAFF is good people :)
~Blue~, AWESOME!!!!!!!!!!!!
Great exposure. That little tid bit in the 10-k: we may release the valuation allowance as early as the first quarter of 2013 -- I can't emphasize how important that is to our future PPS.
I honestly didn't think the Times would report it this way. Figured we were in for another negative propaganda attempt from mass media.
This is a potential game changer. MACD might be out the window. We could end up running hard tomorrow.