EternalPatience
1 hour ago
After years of guaranteeing restructure, liquidation, sr. Preferred, warrants, JPS conversion, reverse split and parroting it for years, I would have loved to see his face when he possibly said, may be I was wrong on those 2 things
More to come on the rest as well...
RickNagra
2 hours ago
Oh wow. $90 on deck.
Which Price May Be Right ?
Subnani Investment Research, LLC believes the price of Fannie Mae’s common shares should be higher than its all-time high of $89.38 considering the current earnings are 3.5x higher than when Fannie’s shares were trading at its peak. This represents an undervaluation of approximately 36x of the current market price. The firm believes the significant mispricing is a result of a market inefficiency. In economic theory, an inefficient market is one in which an asset’s prices do not accurately reflect its true value. “Market inefficiencies exist due to information asymmetries, transaction costs, market psychology, and human emotion, among other reasons. As a result of market inefficiencies, assets may be over- or undervalued in the market, creating opportunities for excess profits.”
Technical analysis is a method used in financial charting to determine trends of a stock. If market inefficiencies exist, technical analysis holds merit. The 200-day simple moving average is a key indicator that may provide potential entry and exit points or identify the direction of an overall trend. Fannie Mae’s price closed below the simple moving average in November 2007 at $38.42 during the real estate meltdown. This indicated a major bearish signal. However, in November, Fannie Mae closed at $3.13, significantly above the 200-day simple moving average of $1.86. The firm believes the close above the 200-day simple moving average is a bullish signal and an indication of a major reversal of the overall trend.
Below is a monthly chart of Fannie Mae dating from 1985 to present scaled linearly and scaled logarithmically. Stock prices do not move proportionately day-to-day. Scaling the price data similarly to how the earnings were above yields a strikingly different appearance. While $90 may seem unattainably distant when scaled linearly, the logarithmic chart appears to shorten that distance.
Stock prices tend to experience exponential changes therefore the firm believes the distance between the current market price of $2.49 and $90 could be recovered quicker than anticipated. The firm maintains its STRONG BUY rating and has a $90 price target upon Fannie and Freddie’s release from conservatorship.
Rodney5
7 hours ago
Toxic or not Fannie and Freddie were the engine used to bailout the banks.
Fannie and Freddie did not meet any of the 12 requirements passed by the newly passed HERA legislation justifying conservatorship.
Rodney5
Re: Robert from yahoo bd post# 761720
Tuesday, 08/08/2023 7:23:46 AM
Paulson said it best himself, when he told the Financial Crisis Inquiry Commission, “[Fannie and Freddie], more than anyone, were the engine we needed to get through the problem.” Treasury needed Fannie and Freddie to help keep the financial system afloat, and it simply took them, under pretense of a rescue. (nationalized)
The Federal Reserve’s program purchased MBS issued by the GSEs. Putting aside toxic or not the Treasury / Federal Reserve freely admitted the GSE's were used to help prop up the housing market.
It’s been argued the GSEs did not purchase toxic securities, (worded toxic or not), will not void the fact the GSEs were used to funnel purchases made by the companies to the fed.
Evidence
From Board of Governors of the Federal Reserve System
95th Annual Report 2008
Quote: "since the November 25 announcement of the Federal Reserve’s program to purchase MBS issued by the housing GSEs and Ginnie Mae, and they currently stand at 5 percent." End of Quote page 19
Link: https://www.federalreserve.gov/boarddocs/rptcongress/annual08/pdf/AR08.pdf
Quote: "It's a big event that the Federal Reserve is offering to buy up nearly 10% of the agency mortgage market," said Art Frank, a mortgage strategist with Deutsche Bank Tuesday morning, the Federal Reserve announced that it would buy up to $500 billion of mortgage bonds guaranteed by Fannie, Freddie and Ginnie Mae, providing the ultimate support to prop up the $4.8 trillion market of these securities. The central bank also will buy $100 billion of the mortgage finance companies' debt securities, including that of the Federal Home Loan Bank, through reverse auctions starting next week. So far, other initiatives to prop up the market including a plan to have both the government-sponsored enterprises buy nearly $200 billion of these bonds and the U.S. Treasury's unlimited purchase of these bonds have done little to stop the weakening of risk premiums on mortgage bonds. As a result, mortgage rates have remained at elevated levels with little relief to consumers." End of Quote
Link: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=33791597
kthomp19
8 hours ago
Immediately upon being forced into conservatorship they are forced to buy $billions more of toxic mortgages.
This is false. Tim Howard searched for evidence for this claim and couldn't find any.
Then there’s the fact that after five and a half years of performance results on Fannie’s 2009 book of business, its cumulative default rate is similar to the high-quality 2002 and 2003 books, and a fraction of the default rates of the 2007 and 2008 books. There is absolutely no evidence that Fannie Mae purchased toxic loans post-conservatorship, yet continued references to this myth, including by SCS, perpetuate it, which is not helpful.
The source of the rumor that FHFA and Treasury forced FnF to buy toxic mortgages after conservatorship started was from a Bloomberg article that itself had no evidence to back it up.
I truly can't understand why anyone would continue to push that false narrative.
kthomp19
8 hours ago
I could be wrong, but believe that most of the folks on this board, including me, were not the same folks who were screwed over by the Government in 2008 or even 2012, but came by way of these stocks much later in the game because it was a special situation and we saw the opportunity to make better than average returns. It was a great risk/reward play when you could buy 100,000 common shares for a quarter each or preferred shares for a nickel on the dollar (not that I got in that cheap for either). But the warrants and the seniors existed at the time many of us bought and we knew what we were buying into. Yet many of these late comers are same people who complain that the Government screwed us. They didn't screw me because I bought in the post-screw period as I think most of us did. People got out their calculators and started multiplying their number of shares by $5 and said "why not $50?" then "why not $150? $350"?. Thinking closer to winning the lottery than investing in 2 solid companies. (I still can't wrap my head around MBS backed by 750 FICOs and 50% LTVs - Damn!! ) And then developing a sense of entitlement - as in hey - the Government owes me at least $xx per share because they screwed the company 16 years ago.
That paragraph is a work of art. Bravo.
If any post on this board needs to be stickied, it's this one.
kthomp19
8 hours ago
What about that poor shareholder who doesn't have the funds to file a lawsuit, but certainly knows his money vanished by theft? Or the widow woman suffering though the taking of private property who knows it was stolen? Or the police officer whose life savings invested in the Austin Retirement Police Officers fund who is unable to retire because his money was robbed from him? What about that?
They could band together and file a class action lawsuit on contingency if they really wanted. Crying poor mouth on their behalf doesn't make you any less of a hypocrite anyway.
In addition, if any of these shareholders have sold their shares then any resolution that causes current shareholders to benefit doesn't help them at all.
If you were truly concerned about justice then you would be advocating for a resolution that gives money only to those who held shares when the conservatorships started and when the NWS was signed. Anyone who bought shares after the NWS has no right to complain about how the NWS screwed them, and the same applies to the original conservatorships.
Are these people hypocrites because their unable to file a lawsuit?
No, because they aren't constantly spouting off legal theories and whining about supposedly illegal government activities. Of the "file your own lawsuit, shut up, or be shown to be a hypocrite" options they have chosen #2, whereas you keep choosing #3.
The hypocrites are those who do such continual whining but refuse to actually do anything about it. Like you.