Bottom line....
Fnf needed help just like the rest of the financial and non financial firms when our economic system was on the brink of collapse 5 years ago. I applaud those in dc that didn't allow that to happen, bravo!
Here is the difference though.
Every other firm that needed help from the govt needed help on their own merits of risk they were taking in association of making huge profits.
Fannie and Freddie needed help from the government because the representations made by the banks that the govt is settling with on behalf of Fannie and Freddie, for billions of dollars, defrauded them.
This is clear as day, no questions asked.
Ask your self, is it ironic that they amount of funds that the govt needed to give fnf, is the same amount of money that they sued the banks for? I think not, fhfa knows that fnf were defrauded.
There are also 2 other important features to this conservatorship:
1. 79.9 percent of shares the govt can exercise if they don't get paid back. Not 80%. That .1% is a very important thing. That extra .1 would make it so id the warants were exercised, the 6 trillion or so would have to go on the govt s books. Their books can't handle that. They knew that then and they know that now.
2. conservator, not receiver. Very important. If they put into receiver none of us would be on this board as it would have been game over 5 years ago. They knew they needed to protect them only (conserve) Because they were defrauded, hence, the amount of money needed in relation to the amount of money fhfa sued the banks for. Cooooooooooincidence, I think not.
The Bberg article yesterday says it all to me in relation to sentiment now. We all saw how fast bberg and others were to write negative articles (and even publish them many times) since May. Now the write that article yesterday talking up fnf!
If this run happens, it will be diffrent than May, it will hold. As we expect billions in profit from fnf in the next few weeks, and net zero approaching then, the govt has Jo choice by to release them.
Do you think that the hedge fund counsel isn't going to refer to these fhfa victories and billions paid by banks for defrauding fnf numerous times, when arguing everything, you have never seen an episode of Law and Order (or a copy of the constitution).
Time for govt to reform (not much to reform anyways, 15 billion in profit combined last quarter, and historically LOW default rates) and release back to the share holders who believe in these companies (I.e. Believe in America).
Some very smart people on this board, good luck all longs, we are in this together, to the MOON baby).
AI
