Fannie Mae-No Politics (FNMA)

[navycmdr]

Paulson validates the Jerome Corsi's contention
(before end of 2017 GSE resolution)

Specifically, he writes:
In Fannie Mae and Freddie Mac, our view is that the net worth sweep
will not likely change until there is a broader plan in place to recapitalize
the entities.
We believe there is considerable upside to our holdings despite potential
volatility and a high probability of a resolution before the end of 2017.

Paulson Tries Going Back To Basics But Losses Mount

By Rupert Hargreaves on August 10, 2017 3:17 pm in Business

Since he shot to fame by betting on the collapse of the US housing market nearly ten years ago, John Paulson and his Paulson Co hedge fund has struggled to hold on to the billions he made for himself and his investors by making one of the most audacious bets in history.


Paulson Co Dan Och, Michael Douglas, John Paulson, Jeff Aronson, Jeff Solomon
Dan Och, Michael Douglas, John Paulson, Jeff Aronson, Jeff Solomon - UJA-Federation of New York’s 41st Annual Wall Street Dinner on Monday, December 5 at the New York Hilton Midtown - Photo credit: Michael Priest Photography with permission
In an attempt to turn performance around, it has been reported that at the end of July, Paulson decided to close a two-year-old Paulson & Co long-short equity fund managed by Guy Levy. Founded in 2015 with seed capital of $500 million, the long-short fund was the first of Paulson’s hedge funds not to be managed by the billionaire founder.

Paulson Co wants to refocus on its core business, merger-arbitrage, the strategy Paulson originally founded the firm on in 1994. But even though the firm has specialized in merger arbitrage for more than two decades, it’s struggling to provide a return for investors in the current environment.

Paulson Co biggest positions

According to documents seen by ValueWalk, the Paulson Merger Arbitrage strategy lost 23.6% in 2016, and for the year to May 31, the strategy was down 5.1%. Over the 12 months to May 31, investors have lost 12.6% net of fees.

At the time of the letter, the largest detractor from the portfolio were Government Sponsored Enterprises—Fannie Mae and Freddie Mac. Paulson believes it’s likely a resolution will emerge for these two businesses before the end of 2017, so is holding out for gains.

Specifically, he writes:

In Fannie Mae and Freddie Mac, our view is that the net worth sweep will not likely change until there is a broader plan in place to recapitalise the entities. We believe there is considerable upside to our holdings despite potential volatility and a high probability of a resolution before the end of 2017.