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Malebaboon, it looks like time has caught up with FNMA. Can I ask, what are your thoughts on FNMA at this point?
Then he would be no different than us!
Yes, you are correct that everyone should do their own DD when it comes to investing. Bill Ackman does his own but he only looks after Bill Ackman. He is not going to share his DD with us. He is in it for himself. I don't try to compare myself to those guys. Of course they have resources that I can't match, but that doesn't mean that they can't make a bad call. Investors Hub provides a forum for debate and sharing ideas and information to expand knowledge. You will get varying opinions and the reader will eventually have to make up his own mind. I just try to share my opinion based on my understanding of what I see is coming and call out things which I feel are off base. But your response demonstrates that my post stimulated a reaction which is good.
Just your suggestion about loading up the truck is not the best advice to give at this point to others less knowledgeable about markets.
Along4zride, I think navycmdr is correct about backing up the truck. Except he should be unloading FNMA not picking up any more. We have warned them enough. They are not children. We will see what happens when the blue summer sky turns dark going into the end of summer early fall.
I would rather be the former not the latter
For those who refuse to open their eyes and minds, a bloodbath is fast approaching not just in FNMA but in the general markets at large.
But if you choose wrong there is lots of financial pain.
No! The markets have their own language. You just have to understand what they are telling you. There are some who are excellent at reading the markets. I am not one of them. But I share what I have learned.
I am sorry to say that once the overall markets start to correct the emotion of fear will take over and motivate investors to action. I would disagree with you, now is not the time to loadup unless you know that the courts are going to rule in favour of FNMA. Be wise. Be safe.
Tremendous opportunities will be had in due time. First we need to get through this coming correction which will be frightful. After this correction we should see an explosive run up in the stock markets in the US. The rise in US interest rates will propel the $US index to perhaps the 120 level. This will all be bullish for the US stock markets. We are going to have a huge move perhaps over the next 2 years before we reach the peak of the market. So the best strategy for now is to start hunting for stocks that have good potential in the next bull run and just wait for the right opportunity to strike.
Well, the correction is not exclusive to FNMA. Dow Jones, S&P etc all peaking or have already peaked. Get ready for perhaps a 15% correction in the markets in the not to distant future, late summer or just after.
Buckle up! Fear is back, signaling major turmoil
http://www.cnbc.com/id/102352832
Abigail Stevenson | @A_StevensonCNBC
17 Hours AgoCNBC.co
Jim Cramer has been in the stock market long enough to recognize a red flag when he sees one. This year the market has been filled with a landscape of uncertainty and volatility, and he's seeing red flags all over the place.
Hence, the "Mad Money" host thought it was a good time to take a closer look at the CBOE Volatility Index, also known as the VIX. It's the gauge for measuring the level of fear in the stock market.
To gain insight, Cramer turned to Mark Sebastian, a technician and founder of OptionPit.com. The technician pointed out that last week the VIX broke out above $20, indicating that investors are expecting a higher than average amount of volatility.
However, when he looked at the daily chart of the VIX going all the way back to 2011, he saw that from the start of 2012 to August of 2014, the VIX only settled above $20 four times.
Yet, things have changed dramatically since that time. Since September of last year, the VIX has settled above $20, all of 14 times. That's more times than in the past two years.
What does this mean? Uncertainty.
"The action in the VIX is reflecting the fact that the market is no longer as safe and reliable as it used to be. It's become much more of a roller coaster," Cramer said.
There is more, as well. Sebastian also saw a very perplexing pattern, that could signal an overall red flag for the market.
In a healthy market, there should be an inverse correlation between the S&P and the VIX. Meaning as the S&P gets higher, investors have a sense of relief and the VIX goes down. Thus, fear subsides when the market goes up and grows when the averages plunge.
Out of all of the red flags lingering in the charts, what worried Sebastian the most about the VIX is the lack of an inverse relationship. The charts show that volatility is actually getting higher as the S&P churns in place or reaches new highs.
According to Sebastian, when the VIX and averages rally together this is a sign that something big is about to happen, and it will be bad.
Sebastian thinks the patterns that he is seeing are reminiscent to the debt-ceiling crisis in 2011 where the S&P 500 was slammed and lost 16.5 percent of its value in one month. He is concerned that we are about to replay this scenario.
What could cause the market to tank? The technician's best guess is that it will fear connected to Europe. Specifically, the Greek elections next weekend and worries that the European Central Bank's quantitative easing programs aren't going to be able to do enough for the economy overseas.
So buckle up, Cramerica. The charts, according to Sebastian, indicate that a nasty selloff is in the near future. However, have no fear—in Cramer's opinion a European based pullback generally creates a good buying opportunity for investors.
"If Sebastian is right and we do get a broad based pullback, then I need you to stay calm and use the weakness to do some buying, because the U.S. economy is in good shape here," Cramer added.
2015 Brings A Flurry Of Good News For Fannie And Freddie
http://seekingalpha.com/article/2797535-2015-brings-a-flurry-of-good-news-for-fannie-and-freddie?source=email_rt_article_readmore&uide=34254285&uprof=46&dr=1
Jan. 5, 2015 12:10 PM ET | 13 comments | About: Fannie Mae (FNMA), Includes: FMCC, RBS
David Sims
Disclosure: The author is long FNMA, FMCC. (More...)
Summary
•RBS settlement of $7.7 billion could add to GSE profits.
•Fannie and Freddie will jump-start lending to marginal home buyers.
•News Stories reporting that Fannie and Freddie have created profits for taxpayers.
Investors following Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) may have noticed that the government sponsored entities (GSEs) are driving lots of news stories at the beginning of 2015.
Possibly the most over-looked story of the past few weeks relates to a possible settlement with Royal Bank of Scotland (NYSE:RBS). They recently added to their loss reserves for a private label security (PLS) settlement with FHFA. The total loss for them will be at least $7.7 billion. This will be a profit for Fannie and Freddie, which have already booked these losses in the past. This settlement is material to the financial statements.
The Wall Street Journal has given Fannie and Freddie a little bit of credit in a recent story about the housing market where they mention that the 3% down mortgages that the GSEs will offer could jump-start lending to marginal home buyers. Here's that snippet,
"Mortgage availability: It's no surprise to anyone who's tried to buy a house in the last five years that the process is much more burdensome. Banks are being very careful to document a borrower's income, the source of their down payment funds, and anything else that might cause them to face higher costs should the loan later default.
The good news is that in 2015, a series of policy changes should take effect that are designed to make the process less taxing, at least at the margins. Fannie Mae and Freddie Mac, the mortgage-finance companies, are also rolling out plans to accept some loans with down payments of just 3%." - WSJ
This story from the Wall Street Journal stands in stark contrast to other recent stories that indicate the wind-down of the GSEs would have no measurable impact on the economy, which is hogwash.
A story in TheHill.com mentions the fact that the GSEs have repaid taxpayers and that Obama will be discussing housing in Phoenix on Thursday, ahead of the State of the Union address.
The next day, he'll head to Phoenix, where he'll emphasize that the housing industry is showing signs of improving. Lawmakers have yet to pass a comprehensive housing reform package, despite bipartisan efforts in the Senate.
Taxpayer-backed mortgage giants Fannie Mae and Freddie Mac repaid their bailouts following the 2008 economic collapse, but Obama and most lawmakers have argued that their government conservatorship cannot be permanent. Several Congressional proposals on both sides of the aisle have called for their demise, replacing it with a new government-sponsored entity.
Shareholders are already anticipating a big announcement from Obama relating to Fannie and Freddie. They should temper their expectations in this regard, as Obama has had this opportunity for several years in the past and made no signal of a policy change. However, the biggest difference between then and now is the fact that the bailout is now profitable for the U.S.
Then, the Washington Post tells readers about the profitability of the Fannie and Freddie bailouts, but simply quantifying the amount.
"The actual taxpayer profit on the bailout is about $350 billion, by my math. That's right, $350 billion. All in cash, most of which has held down the federal budget deficit over the past six years. That's serious money, even by today's standards.
Where is my $350 billion number from? I'm glad you asked. I start with the $15.6 billion TARP number. Then I add the cash profit that taxpayers have made on the Fannie-Freddie bailout. That's $37.9 billion, according to the most recent numbers from the Federal Housing Finance Agency - the difference between the $187.5 billion that taxpayers advanced to Fannie and Freddie when they were in extremis, and the $225.4 billion that the firms have paid the Treasury. That brings the total to $53.5 billion."
The story from the Washington Post is missing a key fact that is very important. The majority of their $350 billion profit figure comes from the interest earned on the Federal Reserve's bond purchases. A large chunk of these "profits" comes from interest earned on Fannie and Freddie MBS, which was guaranteed by the GSEs. These profits should be attributed to Fannie and Freddie, not the Federal Reserve!
Finally, some investors may have seen the stories about a petition on the White House website that asks the Obama Administration to end the conservatorship. This petition now has more than 1,000 signatures.
In conclusion, it appears the news cycle is shifting. Fannie and Freddie may soon be viewed as a net economic contributor, especially if the FHFA's policies are successful in 2015. The GSE reform debate may shift towards salvaging and recapitalizing the GSEs. This will be a huge positive for the companies and shareholders.
Editor's Note: This article discusses one or more securities that do not trade on a major exchange. Please be aware of the risks associated with these stocks.
Additional disclosure: Recently moved to preferred stock position, primarily. Long-term target prices on common shares unchanged.
If you ask you stock broker for the actual stock certificate he will give it to you but he is going to charge you a fee for that. Once you have the certificate they can no longer use it for shorting. But it is all part of the game.
Well, then we should all take possession of the actual stock certifcates when we buy the stock.
Shorts and Longs are like a teeter-totter. I use this as an example to explain the phenomenum of market making. Everyone is waiting for FnF stock price to go up. Until the heavy weight of the holders of the stock sell, the price will go nowhere. Once the heavy holders get frustrated and sell, you get a drop in the share price and then the stock has been reset and is free to go back up again.
To ban shorts or limit them is not the answer. Then you should ban or limit longs also. It is all part of the game. It balances the market. Once you can understand that then this is not an issue. Shorting or going long makes the market. That is how you get a change in the direction of the stock price. If everyone who wanted to hold the stock held it then there would never be any movement in the stock price since everyone who wants to hold it already has bought.
rocco2, these days are kinder and gentler times. Spoil them so when times get really tough they won't know what to do. What a shame.
It's not just FnF that is being hijacked by governments.
Wake up call for Americans. Be careful who you let into your house and make sure you have lots of money just in case.
Challenge to Phila. civil forfeiture law continues
http://www.philly.com/philly/news/local/20141219_Challenge_to_Philadelphia_s_civil-forfeiture_law_continues.html
Jeremy Roebuck, Inquirer Staff Writer
Last updated: Friday, December 19, 2014, 1:08 AM
Posted: Thursday, December 18, 2014, 4:07 PM
Philadelphia prosecutors agreed Thursday to halt efforts to seize the homes of two of the lead plaintiffs in a widely publicized federal suit challenging the city's use of civil forfeiture laws in drug cases.
But Christos Sourovelis and Doila Welch, both of whom saw their houses threatened after police arrested a relative dealing drugs on their properties, said they intended to keep on fighting.
In agreements of dismissal filed in Common Pleas Court, the District Attorney's Office agreed to drop its cases against properties owned by Sourovelis and Welch as long as both owners took "reasonable measures" to ensure no further drug crimes occurred there.
The decision comes four months after they and two other Philadelphia homeowners joined a class-action lawsuit, challenging the city's civil forfeiture program. Ostensibly aimed at depriving drug traffickers of cash, cars, property, and other fruits of crime, such seizures have increasingly drawn scrutiny for cases in which a homeowner is never accused of anything but still faces eviction from a house only tangentially related to a crime.
"After months of uncertainty, my family can finally rest easy knowing that our home is our home again," Sourovelis said Thursday. "That's why we're going to keep fighting for everyone still trapped in Philadelphia's civil forfeiture nightmare."
In May, Sourovelis, 52, and his wife, Markela, were kicked out of their $350,000 house in the Somerton section of Northeast Philadelphia - more than a month after police arrested their 22-year-old son, Yianni, for selling less than $40 of heroin outside.
Although Sourovelis said his family had no idea what their son was up to, prosecutors moved for permanent forfeiture of their property. The law allows authorities to go after properties suspected as criminal hot spots even if no one associated with them is ever charged.
And unlike a criminal case, where prosecutors must offer "proof beyond a reasonable doubt," authorities in forfeiture cases must only show it is more likely than not that the property was used in or obtained as a result of a crime.
Property owners can challenge the seizures but those efforts can take months and multiple court visits to resolve. And in Sourovelis' case, his family was allowed to return to their home within a week of the initial seizure but - until Thursday - lived there fearing they could lose the legal fight over the fate of their property.
"I've lived in Philadelphia for over 30 years," Sourovelis said. "I never thought it was possible for the police to just show up at my doorstep without notice and take my house when I've done nothing wrong."
Prosecutors assigned to the Public Nuisance Task Force, the unit that handles forfeiture cases, have described the Sourovelis case as an "exception rather than the rule" in the employment of a tool they say has aided in cleaning up dozens of rough neighborhoods across Philadelphia.
First Assistant District Attorney Ed McCann on Thursday said his office and the Sourovelis family were already in negotiations to dismiss the forfeiture case before the federal lawsuit was filed.
"This tool has been used to protect neighborhoods, to abate nuisances and stop drug dealing," he said. "The aim is not monetary; the aim is public safety."
But Darpana Sheth, the family's lawyer and an attorney with the public-interest law firm Institute for Justice, contended the Sourovelises would still be mired in a legal battle for their house if not for the publicity their lawsuit had received.
"What they have basically said is, 'We seize first and ask questions later,' " she said. "I don't think you can understate the fact that the D.A.'s Office and the city have taken notice now and started to reevaluate their procedures. That is a direct result of the lawsuit."
Two of Sheth's clients in the federal suit still have houses targeted for forfeiture and she is seeking class-action status for the suit. Sourovelis and Welch will remain as parties to the suit and seek a court's acknowledgment that their rights were violated during the city's forfeiture efforts.
Read more at http://www.philly.com/philly/news/local/20141219_Challenge_to_Philadelphia_s_civil-forfeiture_law_continues.html#OSFlpjrmcKi9sMIW.99
Your a smart cookie. Good for you!
You didn't hear that from me. LOL!
Zephadiah, thank you for that. You were brave in posting the whole article. Wall street Journal doesn't like that one bit. I was admonished twice here on investor's hub for posting full articles from WSJ. WSJ is a stickler for that. I think it is about paying for the service.
Yes, time is the great revealer. Timing is everything.
So you could say that FnF have reverted to the mean behaviour just like the other stocks. LOL! But that piece posted by II padrino is quite interesting. How and when can we capitalize on that information?
I am saying in the last bullish trend that FnF had they didn't follow the Dow Jones so closely as they are now with the correction. I don't mean all bullish trends.
Generally, yes. When the Dow is being impacted big time more so yes. On days like today maybe more just drifting. But you know they kind of moved in unison today also. Its the same sentiment in the overall market. Just looking for leadership.
When we were in a bullish trend FnF didn't follow the Dow Jones too much. Now that the markets are in a correction mode and FnF don't have much news coming out the Dow Jones has taken the leadership role in the emotional roller coaster ride. Were the last 2 days action in the Dow Jones shorts covering their positions? You can see today that the Dow Jones has kind of lost its direction. So pay attention next week.
It is bullish but we are still within an overall bearish correction mode. Pay attention to action next week. Don't let you guard down by relaxing too much over the holidays.
The problem is you have to get caught first before there are any serious consequences!
Watch the Dow Jones closing today. It is a good indicator of action to come next week. A negative closing could indicate more trouble brewing in the weeks ahead.
You are certainly right. We are certainly living in interesting times.
From my readings and understanding the stock market has another leg to run after we have a correction in the timeframe we are currently in going into 2015. After the correction the next leg up will be a huge break out. The 2015 shemitah will coincide with the bond market cracking when they start to raise interest rates. This will probably impact everything. The money leaving the bond market will then drive up the stock market. The current turmoil in the oil price is already causing havoc in the bond market. It looks like all commodities are correcting lower and will for awhile longer going into the shemitah. After the shemitah some of the commodities will take on a shining brightness. All the best.
As you saw from the video sometimes not easy to haul in.
They can go and hunt something else. LOL!
Sundance2, sorry I couldn't respond last night but I used up all my post allotments. Yes, I have watched a video on the Shemitah happening next year 2015. You let me know what you think and we can discuss later.