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Summary
Fannie and Freddie have been in conservatorship 4,500+ days now, since September 7, 2008.
Actual effort was never really put into ending the conservatorships until March 27, 2019 when the White House issued a Memorandum with the top priority of ending the conservatorships.
A close analysis of publicly available plan documents reveals the most likely path forward leading to the recapitalization of Fannie and Freddie beginning with an equity restructuring.
Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) are two government sponsored enterprises that have been retaining capital since September 30, 2019 as part of the White House's plan to end their conservatorships. FHFA finalized capital requirements setting the end goal for how much capital is required for Fannie and Freddie. Last month, an FHFA official was quoted by Bloomberg (emphasis mine):
A different senior FHFA official said the agency and Treasury Department are actively negotiating an amendment, which the FHFA wants to finalize this year.
In case you didn't know, that was last year and the amendment did not happen. It makes me wonder if the Business Insider article about possibly making Fannie and Freddie employees work through their holidays pushed back the PSPA amendment time frame out of respect for their holiday season. In any event there are now less than 15 days until Inauguration day.
Investment Thesis
The current administration has been working for over a year to prepare to put Fannie and Freddie on an irreversible path out of conservatorship and a framework has been sitting on Mnuchin's desk for weeks. The capital rule was delayed but got finalized November 18. 2020. Everything has been put into place in preparation for a Senior Preferred Stock Purchase Agreement (SPSPA) Amendment that enables Fannie and Freddie to go to capital markets this next year and raise capital. If the current administration takes the steps necessary to enable Fannie and Freddie to raise capital, preferred shares are first in line in the capital structure as undervalued, followed by common shares. I figure the day the SPSPA modification happens the preferred shares soar from 35% of par to over 50% of par. Commons could soar from $2.40 to $3-4 but may be able to go multiples further if the past year is used as a guide for crazy retail shareholders buying without an awareness of value.
The upside price appreciation of both of these companies is phenomenal. So shut up , and realize greed is good . They may do somoafter they do something else , but having 10 million shares at 2.30 increased to 30-40 . Mnuchin love you long time !
You are such a twit
146000
83 million shares were bought last 2 weeks of just Fannie . That is not a retail number !
Probably employees of FNMA and fmcc
For every sell , someone buys ! If this stock was going to be massively diluted.... nobody would be buying !! The shorts are keeping the stock in this range for accumulation !!
Will be no dilution! The people buying these millions of shares for the last 3 weeks are not unadvised !
Bwahahahahaha yeah right
Banks don’t want the companies. If they did they would have them already !
Every time I buy or sell cdel is who handles it .
I think the shorts are so coordinated they they cover the same day . That is most , some may know an issue or article is coming out
Bwahahahahaha, yeah right !! A pos has no morals !
somebody has bought 88 million , and 38million of each the last week. I would say they weren’t expecting to get torched .
I agree double digits minimum, and the first needs to not be a 1
Somebody has bought 88 million , and 38million of each the last week. I would say they weren’t expecting to get torched .
What did Maria say on Twitter
Combination of the 2 , major big blocks ! Reminder you can buy on the bid with otc
Hey chicken little how’s it going ?????
Did you notice that if nobody sells then nobody can buy
The only ones lying are the reporters
SM has a score to settle with mad max . He is not about to leave her anything to plunder !
Exactly, if the news was true , you wouldn’t be able to sell above a 1.00
Evidently the shorts didn’t know the employee letter was gonna come out . So the WSJ article was released to help the shorts cover .
I can’t believe I bought a 1000 shares of this at 15-16 and sold it at 25 . Damn what a dumbass !
I think the majority of the shorting is covered the same day . That is possible isn’t it ?
First of all a free and clear Fannie Mae and Freddie Mac will in no way jeopardize the housing market, you liberal spewing nut job !!
That article was an opinion piece by a dumbass wanna be writer , who used a quote from another dumbass as a headline as if SM said it was several years . But nice try !
She doesn’t care about taking private property! She’s a thug . A damn ugly one also !
Will not be a “new “ administration, the evidence has been proven the demoncrats have been caught. Hopefully hung for treason as they should be !
Oh yeah she is real “concerned “about the homeless
Truth
Well that’s very impressive but my point was : it moved down to 2.23 before it moved up to 2.62 and closed at 2.59 . And this is Freddie not Fannie
Actually it moved almost a dollar today
You mean like Happy ending ??
These people are not just throwing money away!!
I see all these exuberant posts ! But how do you dismiss average short volume of 45% ?
Lol
I was diagnosed with almost stage 3 prostate cancer. Had it successfully removed saving all nerves . Anyway had to wear a catheter for about 3 weeks! I’m telling you , that wasn’t half bad . My buddies would come over and drink beer and watch my bag fill up . There are times I miss that catheter !
Everybody has to get nekked on haulover ! We will see who’s selling short !??
I sold it all today and yesterday . Waiting with buy orders already in for 154970 shares