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I have a few of questions.
1. What will happen when the obvious commercial real estate disaster happens.
The skyscrapers are 50% empty. They have a few years left on their 10yr 2% loans. The banks are going to own them and they are worth 50% of what they were.
How will this affect Fannie Mae in the economy at large? Does anybody imagine a different scenario? It seems to me as sure is nightfall day collapse is impending in all cities.
Is there a way to make money betting against commercial real estate?
2. It’s strange that the 7% interest rate hasn’t dropped home values more than it has. But I believe it will. Thoughts? I’m in LA for example and work in the film business, at least I used to, but suddenly starting a year ago all Production left Los Angeles. Everybody I know in the business is out of work. And about to sell their houses.
3. What other Trump trades are there? I think I’ve made it clear that I’m not a fan of Trump. But from the looks of the swing states the election is his to lose. I actually think the New York case is a bullshit case of selective enforcement. The 130,000 is small potatoes. Even with a conviction, I doubt that’s going to change. I was originally happy to see him going to court, but if I’m any barometer, my opinion has changed. I think his position position in the polls will be strengthened whether he wins or loses.
If he wins and is found not guilty, then the case was a nuisance case. if he loses, it looks like political persecution at worst and selective enforcement at best.
I’m coming around to the view that getting rich off release of GSEs isn’t going to happen. Doesn’t mean I’m selling as I do a mumbling of release by Trump will drive this to 4 bucks quickly. It would benefit the Paulson of the world and still wouldn’t require gov to do anything.
So there are a few ways to win.
And many ways to lose.
I can see us getting screwed by the impending implosion of commercial real estate. 20 trillion dollar problem. Usually the way to handle too big to fail real estate is to punish the savers. Either inflate your way out of it, or? Sometimes I suspect that Paulson and cohorts don’t want to get money from monetizing GSE stock, rather they are going to get money by using fnf to bailout all the empty office buildings.
All the towers in LA are empty and underwater and have 4% 10 year mortgages that are all about to go into default.
I imagine that will crash everything. The banks are going to go broke.
Paulson is simply doing the same thing he did betting against the residential market, just on a larger scale in the commercial game.
All those office buildings. Not just the towers, but the 6 story office park cubes are now worthless and the banks are going to get stuck with them.
Mnuchin and Paulson will have cash after the crash and buy them cheap then sell them after the taxpayer gets stuck with bill.
Too bad it’s impossible to make them sensible residential.
I wonder what this crash is going to look like.
Anyone have ideas of how to make money on the coming commercial real estate crash?
John Paulson wants the released. Hedge funds want them released. DJT works for billionaires hedgies he is friends with.
They want to make money on the stock.
The question is is 30 billion in preferred worth it to them and I would say it might be and commons might get screwed .
By the looks of it the election is Trump’s to lose. Arizona, Nevada. I have gone with the winner 89% of the time.
The spreads those states between Biden and Trump and enormous.
Georgia is 9-10 points Trump favor.
I really don’t like Trump, but it’s not like I love Biden.
Honestly, if Trump will release the GSE and make us all rich, I’d be more than happy to vote for him.
Shows how firmly my political convictions are!
All you sell outs fraidycats don’t love Trump for real. You don’t have faith in GOD either. I have a prosperity mindset so nothing can touch me. I’m going to use my daughter’s college money now. No point in going to college anyway if Biden wins. I wish Trump would start his university again. I would send her there.
God bless the USA.
The moment the republicans can they will throw Trump under the bus. They will then act like they never knew him. Trumptards will be all butt hurt, but at least for the ones here.
Big oil buys off the TV preachers. Big media (fox) pumps them full of lies that the eat up. Makes them feel like insiders on some truth.
I loved watching them die needlessly of covid. But I’m sad to see my fellow Americans swindled out of their hard earned money but DJT.
These are poor uneducated unsophisticated people. I guess hearing him say things they identify with and can get angry about is intoxicating.
Have fun getting ripped off by DJT. Truth Social is not used by anyone. It makes less money than a mcdonald’s franchise.
I know you all would like to blow Trump.
Even if he wins this is a lost cause scam. And he deliberately scammed you guys.
If you really wanted a Trump trade you check out Fannie Mae. That’s how Trump’s gonna steal a lot more money and pay off all the billionaires that have been supporting him.
The reason is people are breathtakingly stupid. The stock is being bought by Qanon Trump whackos who line up to get repeatedly scammed. Same people getting scammed to buy gold on radio talk shows.
What are John Paulsons holdings? Does anyone know?
This is a link to the Hannity thing.
https://www.foxnews.com/video/6350295670112
I wish we could somehow ask Trump, in a rally or an interview, what he thinks about the GSEs, housing in general and specifically what he intends to do regarding conservatorship.
Would be great to ask Biden as well.
Is anyone here sufficiently connected in that world where this would be possible?
Any ideas? Also has any one see. Any specific mention of GSE plans in any political platforms or are those a thing of the past… ?
That’s the number I come up with. If the exercise warrants 1/5 of that.. 60 bucks. If Trump would just do us the great favor of talking smack about the release now on the campaign Trail. Promising housing for all, something like that, this would become the meme stock of all time. Valuations wouldn’t even really matter.
You know how insurance companies can have bad years and be premium negative, but they still make money? How does all the capital backing factor into:
A. Valuation. It seems like Fnma has 85$ per common share in cash. (Assuming current number is 85B, it’s been a little while since I checked.)
B. Is there income made on the capital?
C. How do they make money on capital and assuming they don’t how do the hedge inflation and currency fluctuation risk?
Yup. Happens every time. Never fails to get our hopes up.
I wish I had never heard of this stock. But I did and here I am 15 years later.
If Trump or Biden or both would begin to mention GSE release we would see 20bucks. I guess he is too busy gathering suckers for Truth Social. That is going to out of business quick if he doesn’t win.
I wish someone could just yell a question, ask their campaign managers.
I could retire at 20 bucks.
Is the rise in price just from people moving from Preferred shares to common?
Why exactly are the preferred shares crashing?
Let's hope this is every congressperson, their pages parents, their billionaire budies, All the Trumps. Paulson for secretary. Hopefully drops dead.. Now we need Trump to just mention release. Free housing, get some democrat voters.
There are plenty of good reasons one could have to sell. But I agree with dividend fantasy. It would be nice.
Wow. If someone bought those it would cost a whole extra 19.05 to make it appear like upward momentum on the open.
Here is an article CHATGPT just wrote me this article. It took me 10 seconds. I included the question I asked. All that seeking Alpha, Stock info stuff is generated by AI. Everyday. It is click bait. Every now and then there are actual articles and those are easily recognized. These things that just include a bunch of random facts are Bots.
User
Write an article about recent stock price moves at Fannie Mae. The stock symbol is FNMA.
ChatGPT
Title: Analyzing the Rollercoaster Ride of FNMA Stock: Recent Price Moves at Fannie Mae
Fannie Mae, the Federal National Mortgage Association, has long been a key player in the housing market, and its stock (traded under the symbol FNMA) has been subject to significant volatility in recent times. Investors keen on real estate trends, government policies, and economic indicators often keep a close eye on Fannie Mae's stock price movements to gauge the health of the housing sector and broader financial markets. In this article, we'll delve into the recent rollercoaster ride experienced by FNMA stock.
The Upward Surge:
In recent months, FNMA stock experienced a notable upward surge, driven by a combination of factors. One of the primary drivers has been the ongoing strength in the housing market. Despite initial concerns surrounding the COVID-19 pandemic's impact on the real estate sector, low mortgage rates and high demand for homes have buoyed Fannie Mae's prospects.
Additionally, government policies and stimulus measures have played a significant role in supporting Fannie Mae's stock price. The Federal Reserve's commitment to keeping interest rates low has contributed to favorable borrowing conditions, spurring demand for mortgages, which, in turn, benefits Fannie Mae as a major player in the secondary mortgage market.
Furthermore, optimism surrounding the economy's recovery from the pandemic has bolstered investor sentiment, leading to increased interest in Fannie Mae's stock as a proxy for the housing sector's resilience.
The Downward Correction:
However, despite the initial upward momentum, FNMA stock experienced a downward correction in recent weeks. Several factors contributed to this pullback, including concerns over rising inflation and the potential for interest rate hikes.
As inflationary pressures mounted, fueled by supply chain disruptions, labor shortages, and robust consumer demand, investors grew wary of the Federal Reserve's stance on monetary policy. Speculation arose that the Fed might need to tighten its monetary policy sooner than anticipated to curb inflation, which could lead to higher borrowing costs and dampen mortgage demand.
Moreover, uncertainties surrounding the broader economic outlook, including geopolitical tensions and the pace of COVID-19 recovery, added to market jitters and weighed on Fannie Mae's stock price.
Future Outlook:
Looking ahead, the outlook for FNMA stock remains uncertain, with both bullish and bearish factors at play. On the one hand, continued strength in the housing market, supported by favorable demographic trends and government policies, could provide a tailwind for Fannie Mae's business.
However, risks loom on the horizon, including the potential for a faster-than-expected pace of interest rate hikes, which could increase borrowing costs and dampen mortgage demand. Additionally, any adverse developments in the broader economy or regulatory landscape could impact Fannie Mae's operations and stock performance.
Conclusion:
In conclusion, Fannie Mae's stock price has experienced significant volatility in recent months, reflecting a mix of bullish and bearish factors. While the housing market's resilience and supportive government policies have buoyed FNMA stock in the near term, concerns over inflation, interest rates, and broader economic uncertainties have led to periods of downward correction.
Investors interested in FNMA stock should closely monitor developments in the housing market, economic indicators, and government policies for insights into future price movements. Given the inherent volatility and risks associated with investing in financial markets, a cautious and diversified approach is advisable for those considering exposure to Fannie Mae's stock.
Can you imagine? It seems so impossible but getting it back without warrants… with 80 billion in cash in the bank.
It would be absurdly valuable.
Trump says “we have 100 billion in options.” We could have housing for everyone. I’m a real estate guy, I know how to do it. The dems are just saving that to take away your guns and find trans operations for your kids.”
But seriously make it about housing.
Trump doesn’t need republicans votes to win, he needs suburban women in 6 states. He needs swing voters.
What would happen is Biden would say the same thing… talk about exercising warrants. Ending conservatorship.
I bought an electric car company in Ohio (lordstown motors) maybe the day Trump, while Trump was speaking what at the plant just before he mentioned possibly buying all the electric postal trucks. 300% in 3 weeks. I could’ve done so much better.
Had I stayed in I could’ve retired, ( if I had perfect timing.) Which I don’t on my sells. I have bought several times at the perfect point but never imagined things could go as high as they did. On my winners I tend to get out too soon.
Does seem that Trump through his speeches could manipulate markets and cover his bond through options trades. It’s probably legal too.
We need him to start talking smack about housing, that he’s a real estate genius (not) all that smack. What is is a genius shite talker and hustler and this would be perfect. Have Paulson hire him in a PR role. Meaning “if you accomplish a share price of 50$ I will give you 20 million shares, paid as options.” They both win.
It’s my fantasy. Let me dream.
A nickel a day is all I ask.
Actually, anybody that's been here for a while has seen news happen and no reaction in stock price. None. More often than not.
The clock has been ticking for 15 years. I wouldn’t call this a hot potato, tho is a dull cold potato.
I can’t see any reason government would change its current course of inaction, unless release would make themselves and their friends a boatload of money.
This plan has plenty of cover and there is enough meat on the bone to feed everyone, both parties etc. there are enough little guys that the optics aren’t so bad.
What lawsuits for exercising the warrants?
Also, the government not afraid of lawsuits at all.
You said-
“My point is that owning the commons for the long haul is betting on Treasury's largesse. Given everything they have done in the past that seems like a pretty bad bet to me.”
That’s not the bet, at least in my case.
My bet is that powerful forces stand to make a lot of money on taking them out of conservatorship and can do so under the guise “of doing the right thing and making money for the taxpayers.”
There is no court case that is going to give government to change the status quo. I wouldn’t. Why fix what isn’t broke? Courts have said they are under no obligation to do anything.
That’s why the stock trades for a buck.
I don’t know how difficult it to solve. The egg doesn’t need to be unscrambled.
Gov can keep never ending liquidation preference. Which, frankly, as government chartered agencies, they kind of already as they proved they can take all the money they can lock it up they can scrap it do whatever they want..
They were to say that the liquidation preference would only be exercised case of a default or an economic crisis, investors would go, for that would just depress the price.
The government takes the warrants. Exercises them, or sell them to someone who does exercise them. That someone has great oversight on the board.
They start running the place like a tight business, and make sure they never are in a position to default.
The preferred get paid. Commons lined up with 80%. Government keeps the overpayment. Government keeps the warrants they walk out with something near a half trillion. They sell it to the people, as “we made a lot of money, we made the company safe, we did what we always said we were going to do which was a temporary conservatorship.”
I don’t have recent numbers but I think the combined something about $100 billion right now after five years. The current need for $300 billion.
I’m not sure how we bridge the remainder to get to the capital requirements.
Again, the only reason that they would do this is to get insiders rich. Our interest seem to be aligned with their interests.
Chevron case before SCOTUS. The power of Agencies, vs courts, vs the governed in terms of law interpretation, (particularly when vague or contradictory.)
It currently appears it will be scrapped. It’s a very interesting case that could have implications for Fannie Mae.
https://news.harvard.edu/gazette/story/2024/01/chevron-deference-faces-existential-test/
Copy that and I appreciate your reply. my fallback position is this more upside potential in the common. And there should be because it’s less secure. my bet is on a bunch of politicians wanted to get their friends and themselves Rich in the process. That this will be what moves it along. You said they were about to do it three years ago but then they allowed them to accumulate capital and I realize that that was added to the preference but that’s just so they can restructure or do whatever they want in the event they want to.
I’m willing to accept the risk and reward .
Thanks for clarifying.
By the way, in this bankruptcy liquidation preference fantasy, the junior preferreds are going to get burned as well. So suck on that.
Google this text below.
I’m sick of this repeated fantasy about conversion of the seniors. They are not convertible.
“6. No Conversion or Exchange Rights.
The holders of shares of the Senior Preferred Stock shall not have any right to convert such shares into or exchange such shares for any other class or series of stock or obligations of the Company.”
That’s the seniors.
1. They prevent the company from issuing and new stock. This is to avoid dilution of the actual number of shares I. The event of warrant exercise. Keep in mind gov can sell the warrants without exercising them.
2. People hysterically selling the senior convention risk thesis will now start screaming about the liquidation preference.
“But the liquidation preference!!”
It is a liquidation preference. It is like a number 1 at the deli bankruptcy counter.
But the counter is not open unless there is a bankruptcy or receivership. Then why do they have it? They have it so government can restructure the organizations anytime they want, and we have a placeholder in case Congress wants to do something, they can.
Treasury can call the “FHFA we’ve decided that you are going to dissolve the companies in receivership.” The threshold for them doing this is nothing they can simply decide to do it because they feel like it. I doubt they will however.
But the liquidation preference doesn’t mean you can either have your money first in bankruptcy or just converted into shares it specifically says you can’t.
It also says this below which is alarming.
What it basically says the company cannot issue additional shares. It says that forever in the event of liquidation, the taxpayers get all the money. If the company being an independent board, quotes wants to issue more stock they have to pay the whole liquidation present preference.
This may look scary, or contrary to what I’m saying, but it’s not. This conserves the governments warrants. This part can be amended. If the government owns this liquidation preference in perpetuity, they only get it in liquidation. I think that makes sense gets the taxpayers paid first in the event of a default, bankruptcy, receivership, etc. But it still does not make the liquidation preference into a debt, except in the event of bankruptcy.
The liquidation preference also allows the government to in perpetuity fundamentally change the deal, dissolve the company, etc. again, when the time is right, this can be amended as it won’t make Fannie Mae stock, which the government effectively owns 80%, valuable.
The scary language is below.
“Mandatory Pay Down of Liquidation Preference Upon Issuance of Capital Stock
(a) If the Company shall issue any shares of capital stock (including without limitation common stock or any series of preferred stock) other than issuances of common stock with aggregate gross proceeds of up to $70 billion in exchange for cash at any time while the Senior Preferred Stock is outstanding, then the Company shall, within 10 Business Days, use the proceeds of such issuance net of the direct costs relating to the issuance of such securities (including, without limitation, legal, accounting and investment banking fees) to pay down the Liquidation Preference of all outstanding shares of Senior Preferred
The warrants are the equity ROI. That’s a done deal.
The seniors were a liquidation preference.
In the amended agreement, I think it’s the third amendment. But this was not an amended part and states below. You can easily search this text.
It’s a liquidation preference in the event the GSE were insolvent.
This is quoted text. Fail to understand why everybody says they can convert the “liquidation preference” without liquidation, to common stock. Specifically forbids this in the agreement.
Google this text below.
“6. No Conversion or Exchange Rights.
The holders of shares of the Senior Preferred Stock shall not have any right to convert such shares into or exchange such shares for any other class or series of stock or obligations of the Company.”
I’ve simply never understood why the junior preferred go on and on about an exchange for Common shares . You can’t exchange a liquidation preference for anything. And exchange, the senior preferred is explicitly forbidden.
I also happen to think that it would be in the governments best interest to raise the share value through some payment of a nominal five dollar dividend, prior to the execution of the warrants. Obviously, this is debatable.
Again, I’m very interested in understanding what I don’t understand. Thank you.
Ok. I understand what you said.
1. It may be a factor that if treasury does that everything goes on their books. They can sell the warrants. And they can let somebody else exercise them. The government gets to keep that money.
2. There is political cover in calling the senior preferred shares collateral. And having the liquidation preference only be used in liquidation. There’s no liquidation.
3. They exercise the warrants take care of the junior preferreds. Government walks with something like $200 billion maybe more.
4. If they dilute the common stock, nobody gets rich. (Accept maybe the preferreds, that’s their main argument, as they’d rather have a more sure upside, even though it’s potentially less upside.
5. This seems to me to be the shortest thing to make a lot of people wealthy. There’s enough money there for all the Republicans, all the Democrats, all their uncles and all of us. The legality of the conversion of the seniors is dubious, and will be contested. When I read the senior preferred share agreement, it reads to me as collateral against bankruptcy.
My bet has always been on public “corruption/insider trading.” Which in this case can be done under the guys of “doing the right thing” I cannot see the Republicans particularly passing this up. And once the Democrats, see it as an inevitability, they will get in line as well.
If I’m right, I make 20 to 50 times the current share price, if I’m wrong, I might lose it all.
I’m OK with that.
By exercising the warrants and paying off the junior preferred. Treating a senior preferred as what they are, which is collateral. Go away, everybody’s happy. They can say the taxpayer is at less risk.
There was a time when I thought this was the most likely outcome. Things certainly look promising after we won the en Bank.
I’m just stuck here because I’ll be damned if I get up from the table with a loss, before the final outcome.
We shall see .
If anybody disagrees with this and has different, thinking, I’d be interested to hear it. Thank you.
Yeah so who gets rich besides the government? What debt are you talking about? The liquidation preference? That’s only in the event of liquidation.
Sorry I used to know all this. I was just trying to read through the gibberish of the fourth amendment the senior preferred share purchase agreement. What I forgotten is how that relates to the liquidation preference? As I recall all the money that’s been retained, has been added to the liquidation preference. The senior preferred share agreement gave treasury 1 billion shares with a liquidation preference of $1000 per share. The warrants give them right to 80% of the company. When discussing the possible possible liquidation, it’s only in the event of bankruptcy, or a wind down, Which Wallace risk seems remote due to the complexities involved.
The warrants are assignable meaning they can give them to somebody else meaning they can sell them to somebody else.
Can someone explain to me even you Bradford like I’m five how without a bankruptcy, the liquidation preference matters? How does the common get diluted, except in the event of a bankruptcy or wind down?
Thanks I stopped paying attention basically after we lost Collins I still have 71,000 shares, I’m about a 1.88 probably a little bit less because I traded in and out right after Trump’s first election also known as his only election so far.
Can somebody remind me of the scenario whereby Fannie Mae is released from conservatorship and the Commons get screwed? Also explain to me how Republican senators and their drunk uncles would not get screwed. What would the do differently? Make a bet on the sudden drop in share price?