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Be Patient.
Good Morning From Very Hot Northeast
Stay cool, if you can.
Waiting Patiently Hedge!
FNMA Ihub Board We Post On.
Like this post right here.
NYSE volume at lowest of year, and that’s saying something
July 16, 2013, 9:27 AM
See the article below. NYSE volume is low overall. Is it possible many are holding cash to buy in to FnF? Over 1000 on IHUB FnF board. FnF is being watched all over the world. FnF is a Fortune 500 company on the OTC. Anything could be possible. In any event, do not worry about low volume for FNMA in last few days.
http://blogs.marketwatch.com/thetell/2013/07/16/nyse-volume-at-lowest-of-year-and-thats-saying-something/
Stock trading volume levels, no great shakes to begin with, have fallen to a new year-to-date low.
The WSJ Market Data group said late Monday that NYSE composite volume — that is, the volume of New York Stock Exchange-listed shares traded on any exchange — fell to its lowest level of the year for a full-day session.
A measly 2.57 billion shares traded hands Monday. That’s the lowest volume day since July 3. But July 3 wasn’t even a full session, as the Big Board gave traders an early start to the Hamptons ahead of Independence Day with a shortened day. When full days are accounted, Monday’s session amounts to the most sluggish of the year. And that’s saying something. As of Friday, the month-to-date average volume was 3 billion and the year-to-date average was 3.47 billion. Back in 2011, average daily trading volume regularly topped 4 billion, as this chart shows.
Of course, some of the steepest trading volumes in recent history occurred during the turbulent days of the financial crisis, a period most stock investors could live without experiencing again. In 2008, average daily trading volume regularly topped 5 billion and 6 billion shares. It surpassed 7 billion on some sessions in 2009. It’s not much of a surprise that some of the churn has left a system no longer debating whether Citigroup C was on the brink of delisting (In fact, Citi on Monday reported a 42% rise in profit, to $4.2 billion.)
Still, if the low volumes persist into the next two weeks’ busy earning season, the low participation could raise red flags over two areas where sentiment has been riding high. For a start, the S&P 500 and Dow Jones Industrial Average have overcome their May-June pullback to carve out new record highs. And in the last two days, three big big banks — Citi, J.P. Morgan, and Goldman Sachs — have offered their investment banking activities, including equities trading, as a sign of strength. If only more folks were around to take the other side of that trade.
– Laura Mandaro
Follow The Tell blog on Twitter @thetellblog
Follow Laura on Twitter @lauramandaro
Banks Sued By FnF, Not Candidates for GSE Divisions
IMO, the long lists of banks that owe FnF for packaging up subprime loans certainly are not candidates for managing a GSE division.
And US govt. forced the rules that created subprime loans, e.g. giving mortgage to homeless person. US govt. certainly is not a candidate for managing a GSE.
All of us shareholders are the best candidates to own a GSE, since we want a successful return on the $.
Could Watt, Earnings, End C-ship be on Same Day?
If anyone wanted to protect Watt's name from being associated with end of C-Ship, they could let C-ship end on the same day as earnings and the last day of DeMarco.
That could make a nice dream for the next 22 days.
Someone Would Have Wanted Those Shares At Lower PPS
Calm before the storm.
Who Is Paying For Articles To Be Published?
Not me. And I am not selling my shares to the people who are.
FHFA Statement on Introduction of Senate Bill
Link to FHFA very short statement on Senate Bill
http://www.fhfa.gov/webfiles/25331/FHFAStatementonCorkerWarnerBillFinal.pdf
Very bad copy below. But note: "Congressional action is needed to resolve this situation and expand private sector participation
in the U.S. housing finance market."
It is true that Congress will have to take action to resolve the present situation. We can hope the bills that have been introduced will be amended to return FnF to shareholder control.
FEDERAL HOUSING FINANCE AGENCY
STATEMENT
For Immediate Release
Contact:
Corinne Russell
(202) 649
-
3032
June 25, 2013
Stefanie Johnson
(202) 649
-
3030
FHFA
Statement on Introduction of Senate Bill
to
Reform Housing Finance
“FHFA
welcomes
the introduction of
the Housing Finance Reform and Taxpayer Protection Act
of 2013
that
will help frame the policy debate on the future of
the country’s
housing finance
system
.
Fannie Mae and Freddie Mac ha
ve
been in conservatorship for
almost five years
and
Congressional action is needed to re
solve
this situation
and expand private sector participation
in the U
.
S
.
housing finance
market.
“We look forward to working with members of both the Senate and House
as the legislative
process moves forward.”
###
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.
These government
-
sponsored enterprises provide more than $5.
5
trillion in funding for the U.S. mortg
age markets
and financial institutions.
Link to US Code For GSEs
12 USC CHAPTER 46 - GOVERNMENT SPONSORED ENTERPRISES
http://uscode.house.gov/download/pls/12C46.txt
Here is the link to the entire US code regarding the GSEs. It is long.
The magical world of Fannie Mae accounting
Not sure if this circulated yet:
http://finance.fortune.cnn.com/2013/07/12/fannie-freddie-accounting/?source=yahoo_quote
By Allan Sloan, senior editor-at-large July 12, 2013: 8:37 AM ET
Email Print
Fannie Mae converted a huge non-cash profit into a deficit-reducing payment to the Treasury by borrowing the money without having it count as part of the national debt even though taxpayers guarantee it. Too bad we can't all use that stratagem to pay our own bills.
fannie-mae-620xaFORTUNE -- Here I am, sitting around in the middle of summer, listening to my air-conditioning system labor and wondering which pot of money to tap for the generator I've ordered to provide backup power to my house during the next big storm. And it hits me: I need to think the way the federal government does when it deals with Fannie Mae, the giant "government sponsored enterprise" mortgage finance outfit. You gotta love it. Fannie, which has been in federal conservatorship since 2008, created a paper profit of $50.6 billion during the second quarter of this year. Then it borrowed $50.6 billion in the financial markets and sent that borrowed money to the Treasury on June 28. This ended up reducing the federal budget deficit, as calculated by most people in Washington, despite the fact that the government is on the hook for every penny of the $50.6 billion that Fannie borrowed. What's more, this money doesn't show up as part of the national debt. Pretty slick, isn't it?
The non-partisan Congressional Budget Office, quite properly in my opinion, treats Fannie and Freddie as if they're owned by the government. Therefore, the CBO doesn't count money they pay to the Treasury as revenue. It treats it as just a transfer from one part of the government to another.
However, the rest of official Washington considers Fannie's and Freddie's payments to the Treasury to be the equivalent of tax revenues, and uses them to reduce the stated budget deficit.
Heaven knows, the payments are certainly cash that the government can use to pay its bills. The big payment from Fannie to the Treasury last month bolstered the Treasury's cash position, and extended the time we have to resolve the debt-ceiling problem. Not, of course, that it will be resolved in any rational or timely fashion.
MORE: What's behind Perry Capital's Fannie & Freddie gambit?
Now, watch. The $50.6 billion non-cash profit that Fannie took offset $50.6 billion of previous non-cash losses. When Fannie was hemorrhaging cash, it seemed that it would never earn enough money to utilize its tax losses. So Fannie, as required by accounting rules, took a $50.6 billion paper loss by declaring that its "deferred tax assets" had no value.
Now, though, Fannie (FNMA) is making record profits, primarily because it and Freddie (FMCC) are about the only game in town when it comes to converting mortgages into mortgage-backed-securities.
So in March, Fannie decided it would likely make enough money to use its tax losses, and reversed the $50.6 billion charge, as required by accounting rules. This created a non-cash profit.
Someday soon, I expect Freddie Mac to produce a non-cash profit of $30 billion or so by reversing the charge it took when it declared its deferred tax assets to be worthless. Then, I'm sure, Freddie will borrow an amount equal to that non-cash profit, send it to the Treasury, and do its bit to help reduce the deficit by using borrowed money without adding to the national debt.
Now, back to my house generator. I've tried and tried, but can't figure out how to create a non-cash profit, borrow an offsetting amount, not have it count as debt, and use it to pay for my generator. So I'm going to have to use actual money that my wife and I have saved, and set aside for capital projects.
Unless, of course, I can move to Washington, and pick up some federal budget accounting skills …
Posted in: Congressional Budget Office, debt ceiling, deficit, Fannie Mae, Freddie Mac
General Reply Regarding Court Cases
Just making a general response about the past setting the path to current decisions. But I will search a law service later today for any such court cases.
Prior Court Cases Set Precedence
The final outcome could largely be determined by prior Court decisions. It is possible for the preferred shares to be converted to common. My thinking is that will only happen if it makes the future of FnF more stable. No matter what is said, the role of the conservator is to put FnF back to profit and to conserve assets.
Privitization In Process
I don't know if you read the one post yesterday, but FNMA is issuing bonds that are not government backed. This is the first set of private bonds. FNMA is already in the process of privitization.
Blue DD = Thought + Time
The next time anyone wonders where Blue is, just read his recent DD. All that write up takes thought and time. He did not charge us one cent for something that a financial analyst would charge a hefty price for.
Thanks Blue
8/8 Earnings Report Should be Factored In
Nice Analysis!
Symmetry-The cycles are getting larger
Same observation earlier today. The next run should be fast and if symmetry is the correct observation, the peak will be over $10.
Maybe shaking the trees for sales.
Could be hoping for a day like the dip to $1.03.
Want $1.03 back for just 15 minutes.
GLTA!!!!
Hope for $1.80 this morning.
Already $1.70 in Munich and Munich normally is catching up to U.S in the early morning. Right now Munich is ahead.
Buflo
Hopefully win out of court. Think of the costs involved in an in court suit.
Buflo
Blue Got Much Deserved Rest
July 8, 2013 News Article
http://www.malaysiaedition.net/investment-group-sues-us-over-fannie-freddie-bailout-terms/
Note: Both Treasury and FHFA are being sued this time.
Investment group sues US over Fannie, Freddie bailout terms
Perry Capital LLC, an investment manager, is suing the US Treasury in federal court in Washington to challenge the 2012 changes of the bailout terms set for government-owned mortgage firms Fannie Mae and Freddie Mac.
The lawsuit alleges that the Treasury and the regulator for Fannie Mae and Freddie Mac violated a 2008 law that put the two mortgage companies into conservatorship as they faced insolvency at the height of the US financial crisis.
The Treasury Department amended the bailout terms last year, forcing Fannie Mae and Freddie Mac to hand over most of their profits to the government, replacing a requirement that the companies pay quarterly dividends of 10 per cent on the government’s nearly 80 per cent stake.
The suit names both Treasury and the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac.
Perry Capital, which began investing in both firms in 2010, claimed in the lawsuit that shareholder value was impaired when the government instituted a “dividend sweep.”
The arrangement prevents the firms from building capital or redeeming any of the “senior preferred” shares that the US government has taken in exchange for the cash injections to keep Fannie Mae and Freddie Mac afloat.
The bailout agreement provides no mechanism for Fannie Mae and Freddie Mac to repay the US$187.5 billion (about RM550 billion) they owe the government from their 2008 bailout.
The two companies have returned to profitability, prompting investors to snap up the preferred stock of Fannie Mae and Freddie Mac in a bet they will be made private companies in the future.
“This lawsuit seeks to uphold the rule of law,” Theodore Olson, a partner at the law firm Gibson, Dunn & Crutcher and a former US solicitor general, said in a statement.
He said the 2008 Housing and Economic Recovery Act, known as HERA, established specific rules about the government’s limits and obligations under conservatorship.
“Investors had every right to expect these rules to be followed,” he added. – Reuters, July 8, 2013
Perry Capital LLC v. Jacob J. Lew. 13-cv-01205. U.S. District Court for the District of Columbia (Washington).
Here is the case name in case any one is interested in following the development of the case.
Wall Street Journal News
If you have access to Friday, July 5, 2013 Wall Street Journal, turn to page M2. Read "Market Rebound Buoys Underwater Borrowers".
"The strengthening economy and housing market have boosted the value of high-end homes, which has translated to fewer homeowners underwater."
This is good news for Fannie and Freddie and equates to a bright earnings outlook for both GSEs.
LINK TO TRACK CONGRESSIONAL BILLS
This is the link to track congressional bills:
http://www.govtrack.us/congress/bills/
Note from the GovTrack web page:
Around 10,000 bills and resolutions are considered by the U.S. Congress in each two-year session, but of those only about 4% will become law. The current two-year session is called the 113th Congress.
4% out of 10,000 bills will become law.
Along4zride load up at $1
US Market Closes When 7/3?
Serious bidding to follow.
Volatile Stock
Monest Hind, Thanks for keeping us realistic. This stock is volatile and there is no guarantee of what the future holds. If there was a guarantee, I would have sold everything to invest in FNMA months ago.
Everyone should have a plan and stick with it. Plan for uncertainty and factor in as many outcomes as you can imagine.
Fool May Like FNMA As Trade
Fool does not like FNMA as long term investment. Fool recommends stocks to hold for at least two years, to the general public. I have their paid service and they are starting to recommend this stock as a short term investment.
BTW, I do not pay much attention to Fool's articles on Yahoo, the articles within the paid subscription are always a bit different. More explanation is given.
Fools buy penny stock and do trade swings, they just do not make those recommendations to general public.
Long and Liked Drop to $1
I am holding some shares long and accumulated a few more shares on the way down to $1. There was no doubt that drop had to happen before the next run. I did not sell a single share on the pop to $2 or the drop to $1.
Make your plan and stick with it. What works for one person may not work for another.
Chinese Recipes Welcome
Along4zridz, do you have any good chinese recipes to share with us? I love chicken lo mein and cannot find a good recipe.
The immigration bill passed. Corker did a nice job for immigrants. I am not so sure he knows how to deal with GSE though.
I hope America is treating you well and your dreams all come true. You have a sense of humor.
Gap up Monday?
FHFA Dealt With First
Not only does winding down mean many things, very specific statements were made yesterday that FHFA would be dealt with first.
No FHFA= No Conservator = FNMA in shareholder control
Chart Symmetrical?
If the stock chart is Symmetrical this stock is going to $10 + on this run. IMO. But the Symmetry could be a coincidence.
Are we sure it stayed above $1?