Fannie Mae-No Politics (FNMA)

[Sogo]

I'm no Blue but let me try to sum it up for you. Fnma ran up last spring mainly bc it started reporting record profits and the housing boom was obviously well under way. Look at the dates of fnma's recent earnings reports, and you'll see the price per share rose in anticipation of good earnings reports. Then when the reports were actually released, the share price continued rising because the were reporting record profits. The news and hype was that fnma might now be able to "pay back" the gvt earlier than anticipated, and would then be "released" from conservatorship and be able to freely grow from there, which would basically return most of the latent value per share back to shareholders.

Now, since then, politicians started talking more about winding down fnma and other bad things. Its a political uncertainty what will happen. But earnings will continue to be good, lawsuits are fighting for what's right, and legally the gvt appears guilty of massive theft yet again. Now the next earnings report is on or near Aug 8th, talk of winding down fnma is sorta starting to abate, and more are talking about reforming housing policy in a way that does not screw shareholders, and more and more well-founded lawsuits are piling up on behalf of shareholders. We might / should see some oind of a run leading up to August 8th. But there is a ton of detailed info out there that will be important for you to dig through. Check out Rich Epstein's recent interviews on the merits of the lawsuits, for instance. And read up on senators corker and warner and reed and also rep. Hensarling. Each have proposals / bills that are relevant. But congress will hopefully / probably be too slow to act and by the time they do, fnma will have probably handed over enough $ to the treasury to equal what they borrowed from or were given by them. The market and possibly the law / courts will see that as fnma having paid back the treasury, and pressure to release fnma from conservatorship will grow significantly at that point. But the gvt takes what it wants, does what it wants, when it wants. And it takes serious balls to sue the gvt. So that's the wild card.