GSE Restructuring

This is a little old but still quite valid as an outline. Where do you guys think we stand in regards to restructuring options according to table 2, page 6 ?

http://www.azcentral.com/ic/azfactcheck/media/congressional-research-service-report.pdf

Odd. I'm 81% Jill Stein (Don't know her), 78% Garry Johnson (Who the hell is he?), 77% Barack Obama (Do I I really care after Aug. 17th?), and 43% Mitt Romney.

So I guess this says I'm about in the middle. I think most folks are about in the middle anyway.

Yea, should pick up next month (next week). Few days left in the 3 quarter. Notice fmcko, if it was a sell it must be for tax and reporting purposes.

No kidding, NPR radio was going on and on about housing improvement this morning. Maybe volume and accumulation will pick up next month. The end of the 3rd quarter is fast approaching with a few days left.

Reports tomorrow for those that haven't been paying attention, something we all can talk about.

http://seekingalpha.com/article/885681-this-week-in-housing-5-major-reports

It would be about 24M shares at face value if we assume they held or hold about $600M worth per the 2008 article. If they did divest to raise cash to pay more down on their govt. debt, I think likely it would have been in early May. Who knows.

Works fine for me. The article is basically from long ago from FORBES.com.

AIG Prepares For Major Restructuring
Liz Moyer, 09.14.08, 08:22 PM EDT

"American International Group (nyse: AIG - news - people ), one of the world’s biggest insurers, is faltering from exposure to mortgage securities, forced to write down billions in value because of the credit crisis. It also has exposure of $500 million to $600 million in preferred shares of Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ), the two mortgage financing titans that were seized by the federal government one week ago.
"
Lets assume the writer is pulling a number based upon the pps at the time of the article...

Odd, how can they show about $43 a share on 5115 shares? This is dated June 2012.

Good points, Brandemarcus. Don't forget about the AIG ownership of GSE preferred, Wall street buddies of the politicians, and of course the politicians themselves (holding or trading GSE stocks). They all want to make money at the end of the day.

So, who is better for us preferred GSE holders? Romney or Obama, or does it even matter? And why?

I've thought that it didn't matter too much given that both parties have dipped their fingers into the GSE wallet over many years.

Fourcentson1dollar, I totally agree, the Aug. 17th move was completely political, and that's it.

Joe, I really think at the end of the day, Obama or Romney will likely do just about the same thing regarding final resolution of the GSE conservatorship. If Romney is elected, he will likely follow through with something like the Millstein plan. If Obama is re-elected, he will likely follow through with something like the Millstein plan.

The GSEs are pillars of the housing system, and the model works, having the government lending a hand, with the private sector providing the things that government can't do.

Remember what Reagan once said, "Governments tend to not solve problems, only re-arrange them".
So they won't change something that has worked for many years, just re-arrange (i.e. reform).

AIG owns GSE preferred shares?

I did not know AIG owns preferred shares of Freddie Mac and Fannie Mae..., I wonder if they still do.

"AIG also has exposure of $500 million to $600 million in preferred shares of Fannie Mae(nyse: FNM - news - people ) and Freddie Mac (nyse: FRE -news - people )"

http://www.forbes.com/2008/09/14/aig-ny-restructure-biz-wall-cx_lm_0914bizaig.html

QE3 What it means, WSJ.

"The Fed said it would buy mortgage-backed securities, or MBS, for an indefinite period to bolster the economy. That could spell an opportunity for investors—and might warrant stocking up on funds that hold the securities, say analysts."

"The Fed says it plans each month to buy $40 billion of agency mortgage-backed securities, which are supported by government-sponsored enterprises such as Fannie Mae and Freddie Mac FMCC +1.92% . The Fed says the buying will continue until the labor market improves substantially."

http://online.wsj.com/article/SB10000872396390443890304578006702760267388.html

We will now have a buyer with a money printing machine,... Hmm. Now what do you do with Fannie Mae and Freddie Mac.

It's quite possible, but who knows. Obama could come out with something polarizing, or the GSEs remain as a mute point.

Thanks for posting. Interesting quote, "..and investors rightly assumed that Uncle Sam would stand behind it in a financial crisis — as it did, at great expense, in September 2008"

So now, will Uncle Sam eventually also stand by investors?...

Interesting,.. maybe its a signal? I agree its no average Joe.

Yes, it may be time for a new petition.

Freddie Mac is a publicly traded company. Just noted this on the leadership page at the top. For those that think Freddie Mac is not, the leadership says so regardless of August 17th.

http://www.freddiemac.com/corporate/company_profile/our_leadership/


Donald H. Layton
Chief Executive Officer

Donald H. Layton is chief executive officer of Freddie Mac, a publicly traded company that is one of the largest sources of mortgage financing in the United States and a leader in the nation's efforts to keep families in their homes and stabilize the housing market.

Keep in mind that with the new arrangement and the 10% dividend payment gone next year, receivership is out of the picture. Cato Institute said so in August.

I'm wondering about the common too. You would think if the common go up, so would the preferred. I guess there will be a delayed response... I've always thought the preferred was a better play than the common. Any thoughts folks?

Looks like nobody is watching or paying attention to FNMAT. A lot of accumulation going on...

Don't forget, there are several unlocked values that could dramatically shorten the time it takes for the taxpayers to break even from FNF, and actually make some profit in doing so. It could be sooner than 5 years, could possibly even in two years,.. if the powers that be choose to unlock the hidden values.

Very Good find Europe. So, why are the preferred so darn cheap...?