Fannie Mae-No Politics (FNMA)

[capitalismforever]

The cash on hand IS an issue, especially when they earn over $4.00 per year, per share.

They earned $0.01 per diluted share for 2016. Maybe You're looking at the wrong company's financial statement?

They have more than enough profits to pay debts (liabilities), out of earnings.

No they don't. They're under conservatorship and nearly 100% of their profits are taken by the government.

Why do you think investors continue to invest, not only in the stock, but in the MBS bonds (which are backed private insurance companies, with the premiums paid by borrowers (homeowners, financed through FNMA).?

In my 25 year career in the investment analysis world, figuring out why someone else invested has always been at the bottom of the things-for-me-to-do list. I know of no great investor who's held a successful sustainable career in the investment business by following the pack.

Investors buy billions in MBS bonds because they feel they are safe and fannie is solvent, with plenty of cash to pay bills.

Investors purchase bonds based on tier group liquidation preference. Bond investors know what value they're getting, I assure you. Much different from common holders. Bond holders don't invest based on "this thing COULD sky-rocket". They invest based on "I have first preferential right to the asset if my MBS defaults, plus a guarantee from the government that the chance of default is slim to nothing". Bond investors and common shareholders have absolutely nothing in common in regards to this company. Furthermore, 5/6th of the MBS portfolio is not owned by Fannie Mae, hence they are consolidated trusts owned by the mortgage originator.