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It seems no amount of complaining will matter to the government and their financial oligarchs. I feel it is very similar to the days of $4 gas - the only way to "fight" it is to offset losses at the pump with gains in oil stocks. Now instead it's financials; to offset tax dollars handed off at a furious pace plus the destruction of saving accounts due to "free money" Ben Bernanke, the only way to fight it is to make money... off my own money.

We wrote about the $50 Billion that will be handed to banks to do modification of mortgage loans, 10 of which of course to 6 huge institutions [Apr 15: Treasury Saving $10 Billion for Big Banks to Modify Loans]. While infuriating, talking to this "representative" government is like banging your head into the wall. So as I wrote in [Apr 16: Bookkeeping - Starting to Ramp Up Purchases in Ocwen Financial] how can I use my own money, stolen from my pocket (along with yours), to make a profit to in part compensate. So that was a thesis without a fixed number. A nice enough reader alerted me that yesterday we now have a number for Ocwen ... and it could potentially be huge. What is amusing is Ocwen is but a $700 million market cap company...

  • The government has named a seventh mortgage company to participate in a $75 billion program designed to help millions of struggling homeowners escape foreclosure. The Treasury Department said Monday that Ocwen Financial Corp. Inc. of West Palm Beach, Fla., had been selected to participate and would receive up to $659 million.
  • Ocwen joins six companies named last week to participate in the program. All seven companies have been allocated up to a total of $10.6 billion in incentive payments. The largest amount allocated so far was $3.6 billion to Chase Home Finance, part of JPMorgage Chase & Co.

So the scope of this is amusing... 6 huge banks get $10B and hey, another $600M tossed in the pot for the 7th. But that is a huge windfall if Ocwen can fully take advantage of this process; they are doing under $500M in revenue a year. So if Obama-aid generates just $200M a year over the next 3 years - that is a 40% premium to revenue.

Now, in the current atmosphere, people are too busy rocketing up no-name Chinese small caps or dry bulk shippers (still can't believe my Excel Maritime limit buy order yesterday at $6.00 missed by 5 cents, ended the day at $7!) - so who cares about a fundamental story? No one... as the chart showed. ZZZZZ

But for someone like me who still practices the dark arts / black magic known as buying on fundamentals, I am more bullish by the day. I will continue to build a position in Ocwen as I watch China Shoe & Delivery stock ramp up 30% every day. Because I know the "investors" in China Shoe & Delivery will soon abandon it to find the next hot thing, and we'll still have stocks with solid fundamentals.

Disclosure: Long Ocwen in fund; no personal position (could change today)

Source: Fight the Power (or Hedge Against It) with Ocwen Financial