Replies to post #239666 on Fannie Mae (FNMA)

[OHMYGOD]

Excellent information, this board is getting interesting once you get past the nitwits and wongs.

[10bambam]

Excellent post. Wraps it all up in an understandable way. Thanks

[Sogo]

Gvt got away w/GM. Be careful here everyone. I
'm long but aware that gvt can and does often get away with illegal acts. Just because one judge might try to stop then doesn't mean they will be stopped. Think there were no lawsuits about the gvt's GM tricks? That would be something to look into. And again, the GSEs weren't even insolvent. We are witnessing the law vs a form of mafia here, and we all know those battles don't always go the right way.

Think: politically they can do whatever they want to the GSEs bc no voters will think twice about it. "too complicated", voters will think. The gvt will try to screw us. Be careful with your money and hope the gvt loses! That's what I'm trying to do.

[chessmaster315]

Reminder: Obama administration REJECTED a $52 billion offer for fannie.

Underline the word "rejected". No counter offer. Just rejected. If you offered me $500 for my truck that I think is worth $20,000 I would reject your offer because we are so far apart, that your offer is not serious. If you offered $18k or even $15k, then we could begin negotations. But a 500 offer should be rejected.

In a similar way, we now know that fannie has a worth of AT LEAST 52 billion, and really much more, because the offer was rejected.

While I do agree $52 billion is too low, recall that the Obama Administration said that fannie shares are worthless.

Now, if the government is "protecting taxpayers" from financial loss, then they surely should have accepted or at least negotiated that offer.

If anyone offers me $52 billion for my "worthless" stuff, they wont be making that offer twice as I will not only accept it, but I will hold them to that offer, that is, if it is from a billionaire who HAS 52 billion. If its from a homeless bumb, then I wont consider the 52 billion offer credible. But, remember, the offer was from a billionaire, who could, plausably, perform.

My calculations follow:
If fannie is worth 52 billion divided by 1.2 billion shares, that equates to a value of 43 per share. (This number would be reduced by the preferred holders value, and the dilution for warrants, if any. However, it would be increased by any settlements, future earnings, past dividends paid to shareholders in the future, if any)