Replies to post #388479 on Fannie Mae-No Politics (FNMA)

[WallysWrld]

GSE Dividends ($10B) will pay for 1/2 of "Trumps Wall" ... just too tempting to cancel the NWS when that kind of money rolls in every quarter ...

[10bambam]

I just had to look it up. I have never heard that word in Texas
I love IHUB


The Zeitgeist (spirit of the age or spirit of the time) is the dominant set of ideals and beliefs that motivate the actions of the members of a society in a particular period in time. For example, the Zeitgeist of modernism motivated the creation of new forms in the fields of architecture, art, and fashion during much of the 20th century. Zeitgeist is a powerful force embedded in the individuals of a society.[1] The German word Zeitgeist, translated literally as "time mind" or "time spirit", is often attributed to the philosopher Georg Hegel, but he never actually used the word. In his works such as Lectures on the Philosophy of History, he uses the phrase der Geist seiner Zeit (the spirit of his time)—for example, "no man can surpass his own time, for the spirit of his time is also his own spirit."[2]
Other philosophers who were associated with such ideas include Herder and Spencer and Voltaire.[1] The concept contrasts with the Great Man theory popularized by Thomas Carlyle, which sees history as the result of the actions of heroes and geniuses.

GO FnF

[Peter82Denmark]

A valid concern, and my primary concern as well.

Some thoughts :) :

So on one hand we have the FnF cash flow, at this point 10B $, that could fund some of Trumps promises. Although, do we know where those 10B actually go? Could Trump actually spend them if he wanted to?
We have congress who wants to let the banks in on the action, and we have some forces in Ts personally chosen staff that might see things differently than Mnuchin et. al.
The strength of this "force" is unknown, though.

On the other hand, there is Mnuchin whom I believe wants to free the GSEs, at least that's what he's been hinting at the last months on several occasions.
We have the change of wording in the earnings reports (although there is a relatively high risk that it means nothing).
Furthermore, I can't help but think about what Mnuchin said the 19th of January at the hearing, that he thought the GSEs were very important institutions, and that he wanted to work towards a bi-partisan solution. Now, I have no clue if or how many democratic senators/congressmen who would favor freeing FnF, but a letter like this makes me believe that are at least some:
https://www.scribd.com/document/339615295/House-members-letter-to-Mel-Watt-about-Blackstone-deal
Dated February 15, 2017.
Not only that but he also said at the hearing:
"Regulation is killing community banks," Mnuchin said before stating he would relieve regulatory burdens on these small lenders so "we don't end up in a world where we have four big banks in this country."
Again, I'm taking him at his words, and that may be a choice I'll come to regret, but his focus on the small banks seems quite relevant. So when the small banks post something like they just did which basically stated that FnF should be released, I think that Mnuchin will at least pay attention to that statement.
Last but not least, we have the hedgefunds (and their lawsuits). Regarding which side they are on, that's easy: they're on their own side, whichever that is. But if they wanted to drive the stocks up in order to sell them before any concrete decision was made, it would have made sense to have done so when Mnuchin drove the price up 30% in November, though, right? Why wait further if they didn't expect a bigger payout than 4-5 dollars a share? I'm pretty confident it won't get any higher than that until a choice is made and then it's 10+ for commons and near par for preferred or zero for both.

To sum it all up I guess the money (for the government and the TBTF banks) are against us.
On our side is the truth and what's best for the average US citizen in general, but does Mnuchin have the integrity and willpower to act on that? I've been searching vigourously for a tangible dollar benefit to the government should they release FnF and the only one I can come up with is diluting the commons with the gov's 80%. Doing that could persuade Trump to agree on release, IMO, because then he'd have a whole lot more of cash for that wall, perhaps not this year but the next or the one after that.


The Joker is the hedgefunds and the lawsuits IMO.

I'm probably missing some (= a lot of) factors that need to be put into the equation (please share your thoughts about that!), but for now I'm keeping my shares.

I do have a feeling that next week will be pivotal somehow, then again I've had that feeling the last two weeks, lol.

[Donotunderstand]

Could well be

FNMA has serious enemies for a variety of reasons and especially because the TBTF banks want them dead -- oops want to do their job for twice the cost and half the safety

[lushka]

Sogo....those are concerns of mine as well in this very complex situation . Your narrative does sincerely point out the political concerns of milking the cash cow for now and wait until the money runs out then decide what to do with them . Something Congress has been so far incapable of. Or to stop the sweep and let them build capital. Overall we are talking about 25-30 billion in revenue over the next year or 2 vs over 13 trillion dollar gov't debt. It would seem the revenues of the GSE's ,although substantial ,especially to us, are actually just a drop in the Gov't bucket given the big picture of Govt' spending. And on a simplistic basis, (i.e. ignoring that a Perry decision hopefully to come in the next few months and the information in hidden documents soon to be released), it would seem the best solution would be to get the companies recapitalized as soon as possible and not wait until they run dry of capital and place the economy at risk (either real or perceived). You are right in noting , that the next 4-5 weeks will be the litmus test for this as the Treasury has until the end of March to decide to milk the cow or begin the recap process. My guess is, likely we will hear from the Perry decision before this. If they affirm, likely in the long run won't change much but will drop the stock price until a government decision is made.If it is remand (most likely) then likely things won't change much . If it reverses , then Mnuchin and Trump have their work cut out for them and likely will not appeal. The stock should rise to 5-8 range.The trump card (excuse the pun) , is when the documents will be made public and what is in them, and how that information can be used by the current administration. Also keep in mind the interesting changes in the table (fannie) and wording (freddie) of their financial statements and the comments of Tim Howard in this regard. :)