Replies to post #724723 on Fannie Mae (FNMA)

[Guido2]

STICKY!

[skeptic7]

14 years apparently long enough for some folks.

[tutt1126]

Excellent

[Ace Trader]

Based on current PPS and Collins SCOTUS last year all the commons are worth is a gamble at this point until Octobers trail in Lambert Court.

I will be buying a large chunk of Fredde commons to add to my current holdings in the next couple of weeks as a wild card play and yes I can take a 100% loss on it or a 200% win, to me its a wild card play and I'll keep my 10's of 1000's JPS in Fredde only for a rainy day !

[chessmaster315]

But of course.
While I agree that our government "has tested" our patience, its a question of degree.

Buffet said that the stock market "is a device" by which money is transferred from the impatient to the patient.
We need to decide, which category we are in: The patient, who get money transferred TO them, or the impatient who gets money transferred to someone else more patient than we were.

I made this mistake with Best Buy. At around $12, I bought in. (probably around 10 years ago). Then, when it went up to 16 a few months later, I took my (measley) profits.
I did the same with Facebook, GE and a few others.
I certainly wish the stock market would adhere to my schedule, but it does not work that way. Instead, its like a bank, we have to go to the bank "in bankers hours" not our own.

I think the key here is understanding that, FNMA and FMCC are speculative because they are in conservatorship, even if that cship is mostly a government fraud. We have to unwind it, legally, and for those patient enough to endure, they will be rewarded.

[chessmaster315]

The "dilution of commons" hypothesis is based on a the following false premise:

That FNMA needs recapitalized (likely true), and, that some type of IPO will recap fannie.

The reason is that new investors are not lining up to buy shares of a company where the US government has a right to confiscate all the earnings. Who would do that?
No. The lawsuits need to be settled, and earnings transferred back to shareholders, along with possible dividends before any wise investor would want to consider investing.

For investors to profit, they have to believe there is potential earnings.

While there most certainly is potential earnings, none of that matters if the government takes it all. This is why our shares earn $5 or more, and trade for about a half buck.

Why on earth would a new investor buy shares of fnma(new) for $30 or $40 per share, when they could simply buy shares from current shareholders for $.57?

Answer: Only a fool would pay $40 FOR A new IPO on an even keel with sharholders when they can buy them for $.56

For an IPO to raise captial to work, the lawsuits need settled, and the earnings go back to sharholders for dividends and retained earnings.

Remember, investors are not "chickens" waiting in line to get their heads popped off and turned into KFC chicken. Instead, we hear the screams of "burning investors" and wont go near this until these screams stop.
It has to be done "in order". You are putting a roof on the home, before you start the foundation. The roof has to have a solid foundation and walls to support the roof before building the roof.
In a similar manner, an IPO can not be built on shaky earnings only to be confiscated by the government. It has to be on earnings "not already encumbered" by the government. "Unencumbered earnings" (which are available to investors who invest).
Its almost like a ponzi scam..where old investors are paid with investments from new investors. Its just a matter of time before it all falls.

[Achilles deFlandres]

And where do 100% of the profits go? As far as I can tell, the UST received P/E is infinite because they don't own a single share of circulating common. As far as I know, my received P/E is exactly zero.

After recap is met, will the sweep resume?
What will be the UST liquidation preference at that point?
Who will buy any JP offerings if all the profits go to seniors?
How will then, the traditional model of offering JPs to gain capital work?
If someone were to buy JPs, would the raised capital then be swept? (of course it would).

Who here can tell me how to separate a bureaucrat from their power?
Ending the conservatorship means ending a large amount of the bureaucrat's power.

I expect that part of the sealed information is the Obama administration making the GSE income a permanent source of revenue which is why the sweep has not ended. As such, executive action is necessary or (I think mistakenly as ST said congressional action)

[CaptainAwesome]

You're forgetting that Obama wanted to wind down Freddie Mac and Fannie Mae. If that should ever happen, the Gov gets 100% of the liquidation funds as things stand.

[5bagger]

7 days and 1 hour to trade

I bot another 10k today below 51 cents. Wow.

Shorts may be able to push down a little more, but after 7 days, they will be caught.

So, how much more do they play the game when longs (like me) are just adding!?

"Don't believe they can dilute Commons with conversion of any kind"

Of course they can't. SPS to common and super-dilution is forbidden in the HERA documents.

[Brooge warrants cancelled]

time to throw it in brother

[BREAKER098]

You're missing the point. It's not about believing (or not believing) F&F will go bankrupt. It's about believing (or not believing) that F&F will ever have these shackles undone. At this point, the shareholders haven't prevailed. The powers that be want to keep control and influence of F&F. That's the rub.