Taking their time, Fannie and Freddie plunge on wind-down proposal


In one of the great delayed reactions of recent times, Fannie Mae (FNMA -39%) and Freddie Mac (FMCC -36.4%) plunge in wake of the proposed bipartisan Senate bill calling for their wind-down. Like Wile E. Coyote after running off the edge of a cliff, the stocks hung around in positive territory for a couple of hours after the news hit ... then they looked down.

The Fannie "S" series preferred is off 9.9%, Freddie's is down 18.5%.

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Comments (29)
  • idkmybffjill
    , contributor
    Comments (1910) | Send Message
     
    Ouch! Fannie/Freddie common down 42% and 38% respectively now.

     

    Berkowitz you there? Ackman?
    11 Mar 2014, 03:09 PM Reply Like
  • Bear Bait
    , contributor
    Comments (913) | Send Message
     
    yeah but.....it has bounced 39% from its low of the day.... Wish I had the balls to have bought it at the low of $3.3 and then sold it for $
    4.30....
    11 Mar 2014, 03:29 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1910) | Send Message
     
    looks like it is strongly recovering actually
    11 Mar 2014, 03:35 PM Reply Like
  • mag1205
    , contributor
    Comments (2334) | Send Message
     
    Have patience. Congress will never pass this bill.
    11 Mar 2014, 03:11 PM Reply Like
  • grshah
    , contributor
    Comments (16) | Send Message
     
    Congress is never gonna pass this Bill. They can't rob the shareholders without fair compensation.
    11 Mar 2014, 04:21 PM Reply Like
  • SivBum
    , contributor
    Comments (2695) | Send Message
     
    Profit taking ... they were worthless a year ago! Big guns are simply taking insurance with new puts and call positions with the news.
    11 Mar 2014, 03:14 PM Reply Like
  • Trampoline
    , contributor
    Comments (148) | Send Message
     
    Siv, I dont see any options chains for these stocks, can you point us to where you see that?
    11 Mar 2014, 07:40 PM Reply Like
  • dacama1
    , contributor
    Comments (221) | Send Message
     
    Congress will never give away this source of money to hedge fund managers. It was taxpayer money that saved these two giants and they want every dime.
    11 Mar 2014, 03:17 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2860) | Send Message
     
    And the bottom drops out. Congress will never give up their golden gooses, so investors in the common shouldnt expect the cash Fannie and Freddie generate.
    11 Mar 2014, 03:20 PM Reply Like
  • User 13100952
    , contributor
    Comment (1) | Send Message
     
    Investors are taxpayer too. You think!
    16 Mar 2014, 12:03 PM Reply Like
  • Jonathan Bluhm
    , contributor
    Comments (393) | Send Message
     
    And finally everyone realizes that a worthless stock is... worthless. What a pipe dream, hope you cashed in at $6.
    11 Mar 2014, 03:25 PM Reply Like
  • David Durall
    , contributor
    Comments (3) | Send Message
     
    I bought at $1.18. I think for a stock to be worthless, it should be much closer to zero, shouldn't it?
    11 Mar 2014, 04:23 PM Reply Like
  • Yorick
    , contributor
    Comments (747) | Send Message
     
    No new catalyst until the bill is either approved or defeated...if defeated the gains begin anew...
    11 Mar 2014, 03:43 PM Reply Like
  • PCarson
    , contributor
    Comment (1) | Send Message
     
    uh oh... hmmm what to do...sell or hold....
    11 Mar 2014, 04:21 PM Reply Like
  • lord1nelson
    , contributor
    Comments (4) | Send Message
     
    What goes up, does come down, and HOW! A wild, wooley and woeful ride today!
    11 Mar 2014, 04:22 PM Reply Like
  • User 23792283
    , contributor
    Comments (22) | Send Message
     
    bouncing back.
    11 Mar 2014, 04:22 PM Reply Like
  • kevindaly
    , contributor
    Comments (11) | Send Message
     
    We have known that this plan from Crapo and Johnson was coming for a long time. It is basically the same as Corker's plan. Both are nonstarters. There is no financial company that will step forward to securitize mortgages with a 10% backstop. That is several times what Fannie and Freddie currently hold in reserve. It is just not a working business model. These bills are going nowhere. They can talk all they want about how there is a consensus that Fannie and Freddie cannot remain the same. That is a lot different from proposing an alternative. This proposed alternative will have no takers. The stockmarket will eventually come back to waiting for the court cases to be settled.
    11 Mar 2014, 04:22 PM Reply Like
  • Trampoline
    , contributor
    Comments (148) | Send Message
     
    Well said.
    11 Mar 2014, 07:41 PM Reply Like
  • tjunwu
    , contributor
    Comments (3) | Send Message
     
    Nice talk . not a working business model ? I can't understand what's different with before and after.
    11 Mar 2014, 10:20 PM Reply Like
  • Samuel Chan
    , contributor
    Comments (23) | Send Message
     
    By court order, conservator is the legal person to help client pay any bills or debts incurred from his/her available resources. Any remaining balances should stay with the client.
    11 Mar 2014, 04:23 PM Reply Like
  • s404n1tn0cc
    , contributor
    Comments (119) | Send Message
     
    Yup the shorters of FMCC got in there and shorted the shares to $3.38. Then officially closed at $4.04.
    What was omitted was .... after hours trading the shares went back up to $4.30 cents approx. Truly the market is smarter than the shorters.

     

    ALL IN OR NOTHING.

     

    CAUTION: DON'T TAKE MY POSITIONS AS ADVICE. I LIKE RISK. IT CAN BE YOUR BEST FRIEND. THE PROBLEM MAY LAY WHEN YOU CAN NO LONGER GAGE YOUR BEST FRIEND. AND ABANDON YOU.
    11 Mar 2014, 04:50 PM Reply Like
  • Jonathan Bluhm
    , contributor
    Comments (393) | Send Message
     
    Actually it is down to $3.55 in AH trading...
    12 Mar 2014, 03:21 AM Reply Like
  • D.B. Kim
    , contributor
    Comments (137) | Send Message
     
    Nothing like a little market manipulation.....
    11 Mar 2014, 06:56 PM Reply Like
  • dgfurr
    , contributor
    Comments (66) | Send Message
     
    Nothing here has changed, the suits will compensate for that which was done illegally, and wronged prior and current shareholders. What the government does or does not do in the future is of no consequence. If we win, they pay and are held liable for criminal acts. PERIOD
    11 Mar 2014, 09:25 PM Reply Like
  • Achilles Research
    , contributor
    Comments (834) | Send Message
     
    The long-term thesis hasn't been affected at all by yesterday's 'news'. The bill also was fully expected.
    12 Mar 2014, 12:49 AM Reply Like
  • User 19320641
    , contributor
    Comments (10) | Send Message
     
    Any advice for the little guy? FNMA has jumped up to 30% of my retirement portfolio. I know that was stupid, but, it kept gaining and I sold more solid stocks to buy more at $2, then 4, then 5. Should I cut and run or hold? This is half of my annual income if I drop out now.
    12 Mar 2014, 03:42 AM Reply Like
  • Palenque
    , contributor
    Comments (395) | Send Message
     
    Panic selling from day traders only. There is nothing new here. Everybody knew that a new bill was coming. The guys that are here for the long run have a buying opportunity! The bill will find critics and opposition just as the corker -warner . It is more of the same. IMO it is DOA
    12 Mar 2014, 08:34 AM Reply Like
  • alkmaar
    , contributor
    Comments (30) | Send Message
     
    Oh dear! Berkowitz and FAIRX'll get hit.
    12 Mar 2014, 11:15 AM Reply Like
  • alan777
    , contributor
    Comments (2) | Send Message
     
    Law makers need to be fair and retain their moral obligation. Slam doors at share holder is obvious no no way of being fair. They own 80% and they definitely can say with loud mouth but they still needs to be fair or they would setup themselves as a communist type of law makers. Steal the other 20% as well and run and hide with it.
    13 Mar 2014, 09:54 AM Reply Like
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