Berkowitz dismisses rationale for GSE "profit sweep" • 12:45 PM
"Total nonsense," says Bruce Berkowitz of Treasury's claim that 2012's altering of the Fannie (FNMA +4.1%) and Freddie (FMCC +3.3%) bailout - in which regular dividends were scrapped in favor of the "profit sweep" - was necessary because at the time it was worried the two couldn't earn enough to make the payments (a forecast the improving housing market has made wrong).
Berkowitz's reading of the original bailout says the GSEs could have issued more stock to Treasury in lieu of cash, and he's' scratching his head as to how both the government and the GSEs failed to know this. Conspiracy? “I prefer the simpler reason that no one bothered to read the agreement.”
Another reason is government lawyers' reading of the documents differs with Berkowitz. Ultimately, a judge will probably decide.
Separately, how going long Fannie and Freddie became the latest version of The Greatest Trade Ever.
Read comments
FNMA price at time of publication: $5.55. Check FNMA price now »
Was this email forwarded to you? Learn more about Seeking Alpha Alerts here »
Focus Articles on FNMA
Fannie Mae Hitting $10 Soon? by Achilles Research
Why Does Ackman Think Fannie Mae Is A Ten Bagger? by David Sims
Fannie Mae And Freddie Mac Common Shares Are Overvalued by Tom Dorsey
More News on FNMA
Fannie Mae wastes little time rebuffing Berkowitz Mar 4, 12:15 PM ET (Seeking Alpha)
Fewer affordable houses, even as credit eases Feb 11, 1:29 PM ET (CNBC)
Berkowitz's no-hedge hedge fund up 33% Jan 16, 1:37 PM ET (CNBC)
Press Releases on FNMA
Housing Recovery Expected to Press On Despite Recent Volatility in Consumer Attitudes (PR Newswire)
Fannie Mae Releases January 2014 Monthly Summary (PR Newswire)
2014 Economic Growth Off to a Chilly Start (PR Newswire)
Related Articles on FNMA
Fannie's New Chairman Perry Touts 'Essential Role' Of GSE by Todd Sullivan
Fed Officials And GSE Shareholders Surprised By 2008 Crisis by David Sims
Tracking Bill Ackman's Pershing Square Portfolio - Q4 2013 Update by John Vincent
StockTalk on FNMA: FNMA StockTalk | Twitter FNMA | Twitter $FNMA | FNMA Instablogs
Recent Market Alerts on FNMA: All news | Earnings | Dividends | M&A | On the move
Transcripts on FNMA
Fannie Mae, Q1 2008 Earnings Call Transcript by SA Transcripts
Fannie Mae Q4 2006 Earnings Call Transcript by SA Transcripts
Why are you receiving this? You subscribed to real-time News alerts at Seeking Alpha.
If this email was forwarded to you and you wish to subscribe to this email, click here.
Manage your emails:
Get alerts on additional tickers and manage all your email alert choices here
I’m getting too many emails: manage your email alert choices
I’m no longer following FNMA: unsubscribe from all FNMA email alerts
This type of alert isn't helpful to me: unsubscribe from Breaking News alerts on FNMA
To ensure you receive these emails in the future, please add account@seekingalpha.com to your address book, contacts or list of safe senders.
Prices in this email are BATS Last Sale quotes.
Sent by Seeking Alpha, 345 7th Ave. Suite 1400 New York, NY 10001
