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thanks for sharing. wonder who the manipulators might be..
Predictions 2024
1) Housing will crash worst than 2008. A bubble that will deflate 50-70%. Time to buy boys!!
2) FMCC volume today double Fannie's, and it was negative.Institutions will switch to Fannie Mae. FNMA share price will double FMCC
3) junior PS will be eliminated. May get 10 cents on the dollar,if any.
4) Trump will win and will release Fannie Mae.
All this by November 2024
I think there is a bunch of naked short selling.
Selling shares that do not exist will continue pushing prices down.
Wonder if SEC is looking into this, alas OTC seem to have no protection against this predatory practice :(
times PE = about $300 for both
CEO spoke today.
Mentioned conservatorship and more than paid draws with big benefit to taxpayer
https://fortune.com/2024/03/20/leadership-next-fannie-mae-ceo/
please share link to that
please share the link where Lamberth signed!!
Prediction of FNMA price per share once released = $205
Assumptions:
1) Data, going back to year 2000 is still valid.
2) With business model improvements and risk reductions implemented during conservatorship, adjust at least 40% (more probably 70-80% once we considered other growth factors)
3) CPI calculator has correct indexes to calculate current value; https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=82&year1=200012&year2=202402
Calculations
1) On December 2000 FNMA was trading at $82.
2) Considering inflation using CPI calculator, the price is $146.
3) Adding aforementioned 40% = $205
Judge in favor of company accusing SEC of abusing its power.
Same verdict will be granted to FNMA common shareholder. Treasury and FHFA have abused their power. We needed Debt Box law firm to represent us.
https://fortune.com/crypto/2024/03/18/gary-gensler-sec-debt-box-crypto-sanctions-utah/amp/
Trump won super Tuesday and will win presidential election, and he will liberate Fannie Mae.
as institutional institutional investors are coming back to trade FNMA, we see a more reliable pattern of bullish versus short or worse, naked seller who are trading ghost shares.
Regardless, there is a Harami cross after long white engulfing a smaller red .. good sign.
Do you have 488,359 FNMA shares?
Fannie Mae and Freddie on CNBC today, we needed that exposure
https://theglobalherald.com/news/high-mortgage-rates-could-boost-gse-reform-says-cowens-jaret-seiberg/
FHFA OIG on challenging Conservatorship
https://www.mpamag.com/us/news/general/fhfa-outlines-challenges-for-the-year-ahead/462420
360,249 Common shares here
Pershing Square letter
https://pershingsquareholdings.com/materials/letters-to-shareholders/
2024 would be catalyst for GSEs
I now realize the reason FNMA was going down to $0.35 was due to use the loss. Even a wash sale has a lot of benefits.
If next year the stock goes down it is better to sale at a loss and then repurchase after 30 days or if earlier, still reap the still good benefits of the wash sale
No Conversion!!
Thanks for sharing
No Conversion!!
Thanks for sharing
1. It is because we are entering into a recession, 70s style, with high inflation and unemployment.
2. and the fact that the administration will probably do nothing, same as previous administrations.
I hope I am wrong about #2, but if they do something it will take more than a year.
I will buy more in a year from now because they should be released, but maybe under another president and Treasury chief
I expect all shares, common and preferred, to go down 35-45 percent in less than a year
I think it will go down again soon, down to the .50, then .40 by the end of the year. The market just needs a little trigger to start the next bear market now . Better to be in a cash position now for the BIG opportunites will come soon (buying SUPEr cheap)
Mirroring market
SPY went down -57.5% during financial crisis. Then it went up 570% , as of January 2022.
SPY is now down -14% since January 2022. We could say it needs to go down another -43%
Since stocks usually follow the market, once SPY gets to the 191 territory, FNMA could be at around $0.45 - 0.35.That would be bottom.
Time to buy around there
Interesting views. Good comments.
Re # 1;
It is not related to #3
Re # 2;
--/--
Re # 3;
Liquidation Preference, Warrants, etc., should be the standardized ones. No special adjustments to these two. Fannie and Freddie are special but the tools to fix them remain the same.
About the AIG example, its strike price was $45, its costs was twice the call option.
The warrants were distributed to shareholders of record, and the Treasury Department did not receive any of the warrants.
https://economictimes.indiatimes.com/news/international/aig-to-issue-warrants-as-part-of-govt-exit-plan/articleshow/7238010.cms?from=mdr
A higher strike price will compensate dilution. Final price after strike and dilution could be anywhere from $5 to "infinity". It is better for the Government to have a high price per share.
Re # 4;
You are right, it was James Lockhart, but he was the director of OFHEO.
Thanks for sharing Tim Howard article about toxic mortgages.
Re # 5;
Paydown of the Senior Preferred Liquidation Preference; Can only wish they will be considered paid.
Agree with you about the non-cash accounting entries and Tim Howard analysis; Now it doesn't matter.
Re # 6;
--/--
Re # 7;
--/--
Re # 8;
--/--
Re # 9;
--/--
I think a possible recession might be good for the Enterprises to get out of conservatorship.
Reasoning;
If prices keep going down it'll put enormous pressure on the Government to let them go to the Capital Markers to raise cash. Not long ago Fannie had a market cap of about $1.2B, while now it is only about $800M
Thanks for sharing. I remember this article.
We have to analyze this;
1) Just the title indicates, Forbes is antagonistic to F&F and to any goals of then president, Donald Trump.
2 ) Two 2 years later things have changed
3) Explicitly mentions their treatment should be like everyone else's, by not having special rules.
4) It indicates Treasury needed to bailout the Enterprises. It doesn't mention the accounting treatment Henry Paulson (ex CEO of Goldman Sachs) forced the companies to show artificial losses. We have to remember that just a few weeks before the FHA and auditors said they were adequately capitalized, and then suddenly they had a 180 degree change in opinion, when they realized investment banks could use their capital to dump their toxic instruments, at 100 cent per dollar, only with the help of Government, by declaring them insolvent. In order to do this they needed to change their accounting.
5 )Then, it mentions Dividends and device protection Liquidation Preference, where they cannot raise capital w/o paying back LP. This contradicts # 3 above, and the legal meaning of LP.
6) Says the companies were struggling, while recognizing that from 2008 to 2018 they paid $300B to Treasury, i.e. $100B more than received. It credited this to the bailouts. It doesn't make any sense.
7) The goal here was to use the Enterprises' capital buffers to rescue investment banks. Now they blame lack of capital as the hurdle to exit conservatorship.
8) On minute 5:35, it indicates the discretionary power to liquidate assets if placed in Receivership, when Critically undercapitalized. . We know that they have been raising their capital now and this will not happen. It would also create havoc in the bond capital market.
9) Finally, FHFA Director, Ms. Thompson, is for exiting conservatorship. They did not liquidate them in the worst year ,2008
Today's market is crashing, no more free money in the World, Central Banks raising interest rates, in some places up to 100 basis points.
Fannie and Freddie are low today too, due to this pressure, but since these are countercyclical I think their performance will be positive.
Interest rate will benefit significant components of the GSE's Income as well.
Exactly!!
In this board some people continue talking about dilution; what is needed is to know what terms, financial and legal, really mean.
Liquidation Preferences are to clarify what investors get paid and in which order during a liquidation event, such as the sale of the company.
https://www.investopedia.com/terms/l/liquidation-preference.asp#:~:text=A%20liquidation%20preference%20is%20a,the%20company%20must%20be%20liquidated.
I found your note on page 516-517 of the PDF. thanks for sharing.
Congress, Executive and Judicial branches should get a copy of these two pages written by the National Commission. Lowering standards was a political move not economic one taken by the Enterprises
some components went down, like that 1.5% some are talking about, but overall the 319B is more than with Calabria, it would take about 6-7 years to recap without IPO.
Capital Requirement went up??
FNMA 196B, FMCC 123B, Total 319B
with Calabria they needed 283B, so it went up 36B
https://www.reuters.com/article/us-usa-housing-fanniefreddie-idUSKBN27Y2W6
Good luck
I wouldn't buy any preferred shares, neither from fannie nor freddie. Just look at the charts
Of all types of shares, this doesnt seem to apply to common fannie FNMA, does it?
Junior Preferred Shares are going to $0
Warrants are going to be cancelled -- $0
Senior Preferred Shares are going to be cancelled too, Government fully paid. -- $0
Common Shares is where value is. It might go up to $1,107 per share, 138,000%, maybe more