Housing: 1.2 Million Fewer Households, More Overcrowding [View article]
The average size household in 1950 was 3.38. It was 3.68 in 1940. Today it is about 2.57 people per household. If we still had 3.38 folks per household there would be a need for 15 to 17 million less households than what we have today. Think about how much that contributed to growth in the boomer years. As the economy slows households may start to get larger again as many will no longer be able to afford to live on their own. I can vision large subdivisions becoming ghost towns.
Ticking Prime Bomb: Fannie Mae Monthly Summary (November 2009) [View article]
This is somewhat interesting. In doing some research on the Federal Reserve to see if they allow equities to be used as collateral for their lending facility I came across this page. www.frbdiscountwindow....
Click on Discount Window and Payment System Risk Collateral Margins Table
Here is a table of how they treat different collateral. What caught my eye on line 51 is 'GSE Stock'. The only GSE stock I can think of is Fannie Mae and Freddie Mac common and preferred.
Now I know the Federal Reserve before all the debt problems would let the banks hold FNM and FRE preferreds as reserves, pretty much in the same status GSE debt. I also know that when the Gov't took over FNM/FRE Treasury Sec Paulson said that they would work with the banks in holding this paper as reserves.
This Schedule is dated Dec 7th 2009, so it is just over a month old and much up to date.
I am also thinking by GSE stock they are referring to the preferreds. The common has no par value, the preferreds have par value per share ranging from $25 to $1000.
So the question I have is...
If the Federal Reserve still looks at the 'GSE stock" having value enough that they will accept as collateral at 65% of face value, might not at some point that value be recognized by a buy out by the Gov't or the resumption of paying out dividends. If I had to bet I would say the former.
I think there is about $36 bil in outstanding GSE preferred shares.
I think the excuse for the buy out would be by the gov't being closely related to how the GSE were run and basically mandating that they buy mortgages of questionable paper through the 'no homeowner left behind' mindset, and their 100% guarantee of the GSE debt, and their implied assurances to the bank the preferreds were secure - that they have an obligation to settle with the preferred stock/debt holders.
If the 'GSE stock' in the collateral schedule is indeed the FNM/FRE preferred, why else would they value them at 65% of par?
A Curious Mix of Moves for Closed-End Funds [View article]
Any recent thoughts on BIF? Selling for a 16% discount to NAV, hasn't made a distribution in over a year, insider still buying heavily, year ended Nov 30th. I would think they are due for a nice size dividend. Thoughts?
CIT Group's Bankruptcy Plan: Goodbye Common and Preferred Stock [View article]
I think there may be a play in the CIT preferreds A & C. All the media is calling them worthless. No one reads the SEC filing which calls in the reorganization plan for them to have "Contingent value rights". I think with the gov't owning a hefty bit of these that the rights may have some value of interest. If I can get the preferreds for 25 cents or less I will be buying some.
Update: Fannie and Freddie Preferred [View article]
I think someone big is quietly accumulating FRE and FNM preferreds. Everyday I usually see a big buy of a few hundred thousand or more shares but it will be for a different series. It doesn't take much to move these so if you did want to accumulate on the sly you have to do it in small chunks as it does not take much to move these. Many of the big buys I see come through usually execute above the current ask indicating that these are not at the market buys but pre arranged. I also see many trades go off between the bid and the ask telling me that the party running these stocks are stepping in and buying.
I have been accumilating shares myself since the first of the year. Recently taking gains on some shares bought for trades with 200%+ gains as documented on my trading board. investorshub.advfn.com...
My thinking is that someday the government will have to deal with the shareholders. The best strategy IMO would be to support them until they can more on their feet. Since the government has required FNM/FRE to support mortgage lending in ways that have not to the best interest of the shareholders I think they may have an obligation to form an exit plan that gives the common at least some value for their shares. The only other alternative is to confiscate them through a bankruptcy. I don't think the gov wants to do that. Of course if the shareholders are thrown anything at all, the preferred should be made whole.
Anyway, watch the trading. I have the whole series on a watchlist. Look for the series du jour. Everyday they is one or two and it is obvious.
Interesting thought on a government buy back. Volume is so thin on these that if we have big block buys coming through, where are the sellers coming from.
High Yielding Stocks Going Ex-Dividend in January [View article]
If you want a dividend paying trading idea look at PFX. Buy here at 6.70. This one will be ex-div probably Tuesday for 47 cents. I very much doubt PFX will drop 47 cents on ex-div. This is exchange traded debt for PNX which is spinning off part of their company to shareholders next week as well. PNX has been around since 1851. This is also senior debt.
From the earnings transcript;
"Now our capital position and liquidity: Here are a few facts. We remain well capitalized and have strong liquidity. Our liability profile is quite stable. We have no exposure to institutional funding agreements, no securities lending activities and strong persistency in our core business lines. We also have no debt maturities until 2032 and our leverage remains low at 18.1%. Post-spin, our leverage will be about 21% and finally, our investment portfolio provides the liquidity necessary for our business needs. "
SECURITY DESCRIPTION: The Phoenix Companies, Inc., 7.45% Quarterly Interest Bonds (QUIBS), issued in $25 denominations, redeemable at the issuer's option on or after 1/15/2007 at $25 per share plus accrued and unpaid interest, maturing 1/15/2032, distributions of 7.45% ($1.8625) per annum are paid quarterly on 1/15, 4/15, 7/15 & 10/15 to holders of record on 1/1, 4/1, 7/1 & 10/1 respectively. Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. The Notes are unsecured and unsubordinated obligations of the company and will rank equally with all existing and future senior unsecured and unsubordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below.
We need this plan and we need it now. To think we don't is being very short sighted. The little guy is the one that benefits most from this bill. Oh, you think it is the mega-rich? Who do you think will be picking up these assets for pennies on the dollar after many of the little people have lost their homes and their jobs. Without this bill we risk any form of wealth in this country being redistributed to a wealthy collection of mostly foreign investors.
Maybe the assets of our banks will end up in the hands of those with links to Russian Oligarchs bought for a few pennies on the dollar? Look around you and look where the money is. So, what did we accomplish? We screwed the middle class, we expanded the lower class, and we upped the ante to join in the upper class.
You that think this bailout is un-American?...maybe unneeded in a free market? - you really need to look at the problem with more of an open mind.
Write your Congressman? I would bet that most here on theses boards saw the excesses and potential issues 2-3 years ago. I know I was writing about them in 2002. Why no calls complain about how things were too good - too good to be true before this mess blew up?
Greenspan said this in September of 2002;
"An example more immediate to current regulatory concerns is the issue of regulation and disclosure in the over-the-counter derivatives market. By design, this market, presumed to involve dealings among sophisticated professionals, has been largely exempt from government regulation. In part, this exemption reflects the view that professionals do not require the investor protections commonly afforded to markets in which retail investors participate. But regulation is not only unnecessary in these markets, it is potentially damaging, because regulation presupposes disclosure and forced disclosure of proprietary information can undercut innovations in financial markets just as it would in real estate markets.
All participants in competitive markets seek innovations that yield above-normal returns. In generally efficient markets, few find such profits. But those that do exploit such discoveries earn an abnormal return for doing so. In the process, they improve market efficiency by providing services not previously available.
He also said this in the same speech; "No one can deny that fully informed market participants will generate the most efficient pricing of resources and the most efficient allocation of capital. Moreover, it could be argued that, if all information held by individual buyers or sellers became available to all participants, the pricing structure would more closely reflect the underlying balance of supply and demand. Thus full information would appear to be the unambiguous objective. But should it be?"
He argues against a well informed market and regulations that would make it more informed. Where was the outrage then?
I pray this bailout gets passed. It will save jobs, keep many in their homes, and especially guard against even more foreign financial influence in our great Country. We screwed up and must fix it now before we see even more harm to our economy and financial well being.
Is AIG a Buy Following the Government Bailout? [View article]
Why buy the common anyways when you can buy AIG exchanged traded debt shares that are currently yielding up 55%. Symbols AVF and AFF.?? The gov has pretty much guaranteed debt payments for two years.
Also, keep in mind that AIG may not need to borrow on the $85 billion line of credit anyways. AIG's problem has not been cash flow. The rating agencies downgraded them only because of their inability to raise more capital if needed to shore up collateral due marking to market of some of their debt. The warrants for 79% of the company are only good if AIG fails to payback anything they drew off the $85 bil line of credit. Again, that could very well be nothing. I think AIG is steal here at just over $2. But, like is I said, a lot less risk buying AVF or AFF as you get paid to wait to see what happens. Joe Eifrid
Housing: 1.2 Million Fewer Households, More Overcrowding [View article]
Ticking Prime Bomb: Fannie Mae Monthly Summary (November 2009) [View article]
www.frbdiscountwindow....
Click on
Discount Window and Payment System Risk Collateral Margins Table
Here is a table of how they treat different collateral. What caught my eye on line 51 is 'GSE Stock'. The only GSE stock I can think of is Fannie Mae and Freddie Mac common and preferred.
Now I know the Federal Reserve before all the debt problems would let the banks hold FNM and FRE preferreds as reserves, pretty much in the same status GSE debt. I also know that when the Gov't took over FNM/FRE Treasury Sec Paulson said that they would work with the banks in holding this paper as reserves.
This Schedule is dated Dec 7th 2009, so it is just over a month old and much up to date.
I am also thinking by GSE stock they are referring to the preferreds. The common has no par value, the preferreds have par value per share ranging from $25 to $1000.
So the question I have is...
If the Federal Reserve still looks at the 'GSE stock" having value enough that they will accept as collateral at 65% of face value, might not at some point that value be recognized by a buy out by the Gov't or the resumption of paying out dividends. If I had to bet I would say the former.
I think there is about $36 bil in outstanding GSE preferred shares.
I think the excuse for the buy out would be by the gov't being closely related to how the GSE were run and basically mandating that they buy mortgages of questionable paper through the 'no homeowner left behind' mindset, and their 100% guarantee of the GSE debt, and their implied assurances to the bank the preferreds were secure - that they have an obligation to settle with the preferred stock/debt holders.
If the 'GSE stock' in the collateral schedule is indeed the FNM/FRE preferred, why else would they value them at 65% of par?
Joe Eifrid
A Curious Mix of Moves for Closed-End Funds [View article]
Thoughts?
CIT Group's Bankruptcy Plan: Goodbye Common and Preferred Stock [View article]
From the new 8K.
>>xml.10kwizard.com/fili...
>>>>>&g...
Reorganization;
Preferred Stock, Series A, B, C and D Contingent Value Rights
Common Stock No Recovery
>>>>>&g...
Update: Fannie and Freddie Preferred [View article]
I have been accumilating shares myself since the first of the year. Recently taking gains on some shares bought for trades with 200%+ gains as documented on my trading board.
investorshub.advfn.com...
My thinking is that someday the government will have to deal with the shareholders. The best strategy IMO would be to support them until they can more on their feet. Since the government has required FNM/FRE to support mortgage lending in ways that have not to the best interest of the shareholders I think they may have an obligation to form an exit plan that gives the common at least some value for their shares. The only other alternative is to confiscate them through a bankruptcy. I don't think the gov wants to do that. Of course if the shareholders are thrown anything at all, the preferred should be made whole.
Anyway, watch the trading. I have the whole series on a watchlist. Look for the series du jour. Everyday they is one or two and it is obvious.
Interesting thought on a government buy back. Volume is so thin on these that if we have big block buys coming through, where are the sellers coming from.
High Yielding Stocks Going Ex-Dividend in January [View article]
From the earnings transcript;
"Now our capital position and liquidity: Here are a few facts. We remain well capitalized and have strong liquidity. Our liability profile is quite stable. We have no exposure to institutional funding agreements, no securities lending activities and strong persistency in our core business lines. We also have no debt maturities until 2032 and our leverage remains low at 18.1%. Post-spin, our leverage will be about 21% and finally, our investment portfolio provides the liquidity necessary for our business needs. "
SECURITY DESCRIPTION: The Phoenix Companies, Inc., 7.45% Quarterly Interest Bonds (QUIBS), issued in $25 denominations, redeemable at the issuer's option on or after 1/15/2007 at $25 per share plus accrued and unpaid interest, maturing 1/15/2032, distributions of 7.45% ($1.8625) per annum are paid quarterly on 1/15, 4/15, 7/15 & 10/15 to holders of record on 1/1, 4/1, 7/1 & 10/1 respectively. Units are expected to trade flat, which means accrued interest will be reflected in the trading price and the purchasers will not pay and the sellers will not receive any accrued and unpaid interest. The Notes are unsecured and unsubordinated obligations of the company and will rank equally with all existing and future senior unsecured and unsubordinated indebtedness of the company. See the IPO prospectus for further information on the debt securities by clicking on the ‘Link to IPO Prospectus’ provided below.
LDK Solar Has Caught My Attention [View article]
The other five please..........
Thanks.
Bailout: Reaching a Deal [View article]
Maybe the assets of our banks will end up in the hands of those with links to Russian Oligarchs bought for a few pennies on the dollar? Look around you and look where the money is. So, what did we accomplish? We screwed the middle class, we expanded the lower class, and we upped the ante to join in the upper class.
You that think this bailout is un-American?...maybe unneeded in a free market? - you really need to look at the problem with more of an open mind.
Write your Congressman? I would bet that most here on theses boards saw the excesses and potential issues 2-3 years ago. I know I was writing about them in 2002. Why no calls complain about how things were too good - too good to be true before this mess blew up?
Greenspan said this in September of 2002;
"An example more immediate to current regulatory concerns is the issue of regulation and disclosure in the over-the-counter derivatives market. By design, this market, presumed to involve dealings among sophisticated professionals, has been largely exempt from government regulation. In part, this exemption reflects the view that professionals do not require the investor protections commonly afforded to markets in which retail investors participate. But regulation is not only unnecessary in these markets, it is potentially damaging, because regulation presupposes disclosure and forced disclosure of proprietary information can undercut innovations in financial markets just as it would in real estate markets.
All participants in competitive markets seek innovations that yield above-normal returns. In generally efficient markets, few find such profits. But those that do exploit such discoveries earn an abnormal return for doing so. In the process, they improve market efficiency by providing services not previously available.
He also said this in the same speech;
"No one can deny that fully informed market participants will generate the most efficient pricing of resources and the most efficient allocation of capital. Moreover, it could be argued that, if all information held by individual buyers or sellers became available to all participants, the pricing structure would more closely reflect the underlying balance of supply and demand. Thus full information would appear to be the unambiguous objective. But should it be?"
He argues against a well informed market and regulations that would make it more informed. Where was the outrage then?
I pray this bailout gets passed. It will save jobs, keep many in their homes, and especially guard against even more foreign financial influence in our great Country. We screwed up and must fix it now before we see even more harm to our economy and financial well being.
Joe Eifrid
Is AIG a Buy Following the Government Bailout? [View article]
Also, keep in mind that AIG may not need to borrow on the $85 billion line of credit anyways. AIG's problem has not been cash flow. The rating agencies downgraded them only because of their inability to raise more capital if needed to shore up collateral due marking to market of some of their debt. The warrants for 79% of the company are only good if AIG fails to payback anything they drew off the $85 bil line of credit. Again, that could very well be nothing. I think AIG is steal here at just over $2. But, like is I said, a lot less risk buying AVF or AFF as you get paid to wait to see what happens.
Joe Eifrid
Looking for an Inflation Linked Parking Spot [View article]
www.insidercow.com/his...