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"They" are doing this because:
1. Free money for the government.
2. No complaints from the "affordable housing" group. None.
3. Releasing the GSEs would ignite a political firestorm for "letting speculators and the evil hedge funds win" a tremendous windfall.
4. Letting the "bankrupt" GSEs free will, according to opponents, cause tremendous risk to taxpayers. That will play well in the media.
5. Conversely, fully nationalizing the GSEs causes problems in the courts, where shareholders would have a clear case for a "taking" lawsuit.
6. Fully nationalizing the GSEs also would cause the 30-year mortgage to disappear.
7. Inaction by the federal government will, in this case, never cause a problem.
8. If the GSEs cannot be shut down, major financial contributors want the status quo maintained so they have some control over opportunities in the mortgage securitization market.
9. Based on previous decisions, there is no threat that the courts will require any changes.
Given all this, the only rational decision is for the administration, whomever that is, to do nothing.
I am long Fannie and Freddie preferreds. But I don't see anything happening in the near future.
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stockanalyze said:
we can keep posting all day long but what matters is to think why is the admin doing so? why have they stole 300 billion from citizens and keep doing it? why are they projecting that fannie and freddie are in a loss as it only hinders in their affordable housing goals (you can’t dole out when you are at a loss). why are they fighting court cases so hard if they want to get these cases behind them, let the rightful owners win. if they care about hedge fund owners not get rich, most of them have exited , 99% are ordinary citizens why let them suffer? and overall it should not matter as ordinary people’s money is invested in hedge funds.
i just don’t get why they are doing so? do you?
I agree 100%
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From EternalPatience:
Here is how it will play out
1). If he clears all the cases. (which I don't think he will
2) If he wins the republican nomination (which I don't think he will)
3) if he wins the elections in 24 (which I don't think he will)
We will get a letter in 2029 stating that he would have done this and that during his regime if A B C D had happened
Commons now at 55 - 56 cents ... will we get down to 40 cents?
The dead penalty. Now that's an idea that I can totally support.
I hope so. I'm surprised it didn't jump more after the increase in dividend.
I am not a lawyer or finance whiz, but I thought market cap was share price X outstanding shares. What am I missing here?
--------------------------------
Post:
Market cap equals earnings times a P/E multiple, period. The P/E multiple includes all information about the company, like cash on the balance sheet.
Hilarious! Well worth a few minutes of time.
Jerseyhawg ... you and your family are in my prayers. Sometimes God's plan simply sucks.
Jeff
My understanding of a "Lehman moment" is the fact that Lehman declared bankruptcy and entered into liquidation. Lehman was not a large player in the sense that it represented a large fraction of GDP, but it was a large player in the sense of the shock it delivered to the system.
Evergrande is a large player, and is much larger than Lehman compared to China's GDP. But unless China decides to let them go, it's not a Lehman moment.
I don't think China will let that happen.
That said, I wouldn't buy their bonds, even at a 90% discount. But I wouldn't buy anything based in China. No respect for private property.
I appreciate your contributions Joe. You made me take a much harder look at these CTs than I might otherwise have done. As I appreciate the contributions of those who pitched the other side of the coin.
Ask anyone who works in DC. Who lives in DC.
Ask the sainted Maloni.
Are there any secrets in Washington DC?
Nothing. Repeat: Nothing in Washington DC is hush-hush. Nothing.
Something I don't understand. If a derivative action is successful, the money goes to the GSEs. At that point the governement will simply take the money.
So as long as the GSEs are in conservatorship, I do not see where a derivative suit helps us shareholders.
It is not a liquidation. There are no contract rights, according to the Supreme Court. FHFA has the ability to do whatever it sees as beneficial to the public it serves. They can declare the GSEs bankrupt, eliminate all stock, issue new charter or charter, transfer all the assets to the new company or companies and offer an IPO selling all the stock to the public. Shareholders can do nothing to stop it. All we can do is file a takings claim.
Someone please explain to me, what is preventing the government from declaring all shareholders of the bankrupt GSEs as having no interest whatsoever. Essentially declaring all common and junior preferred stock as worthless, giving the government 100% ownership and then letting the government sell the company to new shareholders under a new PSPA? Nothing prevents that. SCOTUS says that is within FHFA's power. Yes, previous shareholders have a takings claim, but it may not be valuable enough to fight over and at minimum would take another decade to resolve.
All my shares were purchased after the 2008 date.
This seems to be the most likely conclusion to me as well. Hopefully it means Calabria is gone.
Tim Howard's "opinion" was regarding whether the GSEs might have had to take an accounting charge towards capital, and how much they might have taken, had they not been forced into conservatorship.
His statement that the GSEs would never have been insolvent is based on the numbers. It is not an opinion. It is a statement of fact based on what actually happened.
______________________________________________________
Quote:In his brief before the Supreme Court, TH says that evidence shows the GSEs would never have been insolvent (Pp 20-21):
As Tim Howard himself said, this is not fact but informed opinion.
I disagree with your statement that we should stop proclaiming that Fannie and Freddie never needed a bailout. (Your comments are below in red.)
In his brief before the Supreme Court, TH says that evidence shows the GSEs would never have been insolvent (Pp 20-21):
Precisely because Fannie and Freddie had not
been purchasing or guaranteeing the types of toxic
mortgages that caused the housing boom and
subsequent bust, their credit losses never rose so high
as to threaten their solvency. Between 2008 and 2011,
Fannie and Freddie suffered a combined $101.4 billion
in credit losses, yet during that same period their
business revenues—net interest income plus guaranty
fees and other miscellaneous income—were sufficient
to cover both those credit losses and $15.5 billion in
administrative expenses. FNMA 10-K (2009); FNMA
10-K (2011); FHLMC 10-K (2009); FHLMC 10-K
(2011). On an operating basis, the Companies would
have been able not only to maintain the $84 billion of
capital they held on June 30, 2008 ($47 billion at
Fannie and $37 billion at Freddie), but to increase it.
Furthermore, TH states that the government had other options available to it, that would have allowed it to lend to the GSEs with no risk to taxpayers (Pp 26-27):
As documented above, the
takeover of Fannie and Freddie was not a rescue—it
was nationalization, executed by Treasury for its own
policy purposes. Fannie and Freddie did not request or
require assistance at the time they were taken over.
Further, had they ever needed any assistance, the
government could have provided it at no cost or risk to
the taxpayer by making secured repayable loans to the
Companies, fully collateralized by their holdings of
agency mortgage-backed securities. Because the
government made a conscious policy choice not to
permit such assistance, it cannot assert that the
option it did pick—nationalizing the Companies
against their will, without statutory authority, and to
Treasury’s sole financial benefit—at the same time
subjected taxpayers to “enormous risk” that justified
the Net Worth Sweep. If there truly ever was any risk
to the government in assisting the Companies (and
there was not), collateralized loans were a means to
avoid risk altogether. The government eschewed this
solution in favor of the devious alternative that
culminated in the Net Worth Sweep.
I submit that we are quite safe in stating that the GSEs never needed a bailout, which in fact was conceived not as a bailout but with the sole purpose of nationalizing the GSEs, or effectively putting the GSEs out of business.
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Actually, I will have to revise my comment about concentrated common nonsense being rare.
Quote:FnF never needed a bailout.
Stated as an opinion, this lacks proof. Stated as a fact, it would be just plain false. Tim Howard said it best:
Quote:Finally, we can’t definitively say that without the non-cash accounting entries made by FHFA Fannie would have survived the crisis.
...
I believe it is highly unlikely that a privately managed Fannie Mae would have had this many book expenses in those three categories, but that is not a fact; it is an (informed) opinion.
It is government of the donors, by the donors and for the doners. And don't you forget that.
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Is it a Government for the People by the People or a Government for the government by the government? I'm a little confused after the "temporary conservatorships" and the Government taking all of our profits into perpetuity since August 17, 2012.
I have a Schwab account. It's the best system out there.
I use Robinhood as play money. Very low balance. But you can't buy Fannie or Freddie.
I have a Robinhood account. It will not let me purchase FNMA or FMCC.
There are a bunch of small lot trades going thru,,saw 50, 40,96,even 1 share trade- Could be Robinhood has found us
Treasury emails breeched
According to the NY Times:
The Russian hackers who penetrated United States government agencies broke into the email system used by the Treasury Department’s most senior leadership, a Democratic member of the Senate Finance Committee said on Monday, the first detail of how deeply Moscow burrowed into the Trump administration’s networks.
https://www.nytimes.com/2020/12/21/us/politics/russia-hack-treasury.html?action=click&module=Top%20Stories&pgtype=Homepage
Anyone around here have a friend among the Ruskies who could get us copies of Mnuchin/Calabria correspondence? I'd contribute a few bucks ...
I thought the GSEs didn't lend money to anyone.
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navycmdr: While Fannie Mae (ticker: FNMA) and Freddie Mac (FMCC)
already had the flexibility to lend qualified mortgages to buyers ...
A good "hit" piece has a lot of truth to it. It's not simply a false statement.
Mnuchin is likely considering a lot of things. Not having a consent degree is only one of them. "Considering" can mean lots of things, but it for sure means no final decision has been made.
The truth will come out, but not necessarily in a couple of days. Mnuchin is in no hurry to make a definitive public statement. So this will stand until something else happens to question it.
The real question is why would Hackerman publish something like this, that is so obviously soft news with an intended purpose. Who is paying him, or persuading him, to f the GSEs? Is it his boss, the Wall St Journal? Or some investor?
I certainly don't know the answer to that. But his gloating on twitter makes me think one of those two options above is in play.
----------------------------------------------------
was it a hit piece ?
if yes - then we should recover today when truth prevails - right?
a hit piece --- complete with lies intended to take us down - is exposed the next day or day after ---- 99% of the time
so are you buying and then buying and then buying
I did yesterday - 3 times - and today is showing me that there was a lot of truth to the WSJ interpretation
In re-reading the WSJ article, it is very significant that Andrew Ackerman does not give the date of the SM interview. Consequently I would label this a "hit" piece, not a true reporter's story.
No reporter worth anything would leave a date like that out of a hard news story.
Somebody put him up to it, but who?
I am a former city editor of a medium-size metro daily. This piece smells bad to me. But I am a long-term shareholder, so my opinion is of course colored by that.
I used all my cash in my IRA to buy shares at $2.14. Hope to cash them out at $2.64 in next few days.
I didn't mess with my long position at all.
I posted this for you.
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Guido, I tried yesterday and today (6x) unsuccessfully, to post a comment to the Editorial Board of the Washington Post Opinion Piece posted in the latest hit piece with the evil hedge fund guys narrative, etc. I am trying to post this but am unable to, can you or someone else on the board copy and paste and post it? Or do you think we should edit it some?
I think MOST (if not ALL) of the major dailies keep pushing the narrative that the rich evil hedge fund guys will be the "winners" here, they should know that Regular People, Small Community Banks, Municipal Workers Pension Funds, et.al, have been, as Chief Justice Roberts said, "Wiped Out", by the governments nationalization of two privately owned Fortune 50 corporations.
Here's what I wrote: ... etc.
If you can, leave a comment in favor of FnF. I did.
Millhiser is strongly against the GSEs. Not sure why. Every article turns into a hit piece.
Transcript is available.
https://www.supremecourt.gov/oral_arguments/argument_transcript/2020
Ian Millhiser from Vox. This guy doesn't appear to have a clue.
This is the week that all the longs' dreams will come true. Commons up 50% by Friday. Preferreds up 100% by Friday. Billy Ray has spoken.
There is no plan. Not yet.
If in fact a plan had been given to journalists and embargoed until 3 p.m. it would be out already.
No plan. Not now, not ever in all likelihood.
Pray that the 5th Circuit acts soon.
2.65 but up more tomorrow
They accepted $100.
Schwab will not let me place a limit order at $150. Here is the message:
This order cannot be placed because the limit price you have entered is more than 147.53 points away from the most recent quote of 2.47. Please change your order or if you need further assistance call 877-368-8288. (DO839)
Not betting the farm on this,, of course, since I've already bet the farm and it's all in. But I hope you are right this time.
I thought Lehman failed because of a liquidity crisis, not because they were insolvent. They could not meet their short-term loan obligations because, effectively, no one would lend them any short term notes.
They may have been technically insolvent, but only because much of their mortgages and MBS held in-house were plummeting in value at the time of the bankruptcy. They were way over leveraged, so the drop in the value of the securities left them no effective collateral. If the Fed had allowed Lehman to borrow at the full face value of the securities Lehman held, like the Fed did for everyone else, Lehman could have limped through like everyone else.
Water under the bridge, of course, but there was a lot of value there once the markets returned to normal. Hopefully we'll get to claim some of it.
I'm holding, but not buying even at 4 cents a share until I hear more details of last week's hearing or see the ruling posted online.
I am diamond.
Thank you Cotton. I think I broke my "refresh" key today.