GSE investors head for the exits all at once


Fannie Mae (FNMA -11.7%) and Freddie Mac (FMCC -12.1%) are lower again in volatile action one day after a the release of a Senate proposal to wind the two down. Both stocks earlier took out the panicky lows made yesterday, but have bounced since.

SA contributor Achilles Research reminds yesterday's news was completely expected and provided zero new information. The bill is the prototypical DOA legislation, especially with upcoming elections.

The selloff, says Achilles, is a classic market panic in a couple of highly speculative and overextended names. Congress will do what it likes, but the fate of shareholders will ultimately be decided in the courts.

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Comments (8)
  • rwiniarek
    , contributor
    Comments (8) | Send Message
     
    Not investors, speculators!!!
    12 Mar 2014, 11:12 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (12649) | Send Message
     
    Good. They should be dismantled, however, I don't like the replacement proposal either. 10% of the value of the house should not go to cover losses and a 5% down requirement is ludicrous. Most all of it should before making taxpayers pay for defaults. The simple fact is the government should not be behind home mortgage insurance because all it means is unscrupulous selling to those who don't qualify and making taxpayers pay for it.

     

    Socialized housing doesn't work in the USSR and won't work in the US either. Fannie Mae and Freddie Mac are very close to a socialized housing market. More so that France, England, Italy, Greece, or the rest we accuse of being overly socialized and plagued with problems.
    12 Mar 2014, 02:42 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (10727) | Send Message
     
    Anybody who thinks that the president (Obama or Mrs. Clinton if it takes that long) will see a bill on their desk regarding eliminating F&F are living in a fantasyland.

     

    If there is one thing our congress is excellent at it is disagreeing on massive reforms.

     

    There is big money on both sides of this issue and as long as the congressional puppets are being made to dance in two directions on this that is all we will see.

     

    Meanwhile, F&F will make billions while the owners (shareholders) see NO dividends.

     

    Illegal and unfair!
    12 Mar 2014, 07:05 PM Reply Like
  • oilman545
    , contributor
    Comments (64) | Send Message
     
    I don't see how the government can just kill FNMA and FMCC. They sold this stock to the public just like any corporation would have. Corporations are bound not to do anything that is not in the best interest of stockholders. Government same. TARP was repaid and the stockholders have rights too. Its a profitable business and the stockholders deserve dividends from it. Its going to court and I am sure the government position will be impossible to defend.
    12 Mar 2014, 04:26 PM Reply Like
  • philipmax
    , contributor
    Comments (371) | Send Message
     
    Somehow everyone is convinced that the Courts are just and fair; that they will fix any injustices to the shareholders and the public.
    Surprise! The Courts are fickle and unpredictable. That is the scariest aspect of our system. What is patently unjust to one person is perfectly just in another's eyes.
    There are politically appointed Judges who must toe their bosses lines. There are Judges out there who are uninformed, misguided, as well as, doctrinaired, who render incredible decisions. And, yes, there are appeals and more appeals, but these could drag on for generations.
    There has got to be a quicker way to fix this mess. Congress is tainted, the Executive branch is tainted, and the Judiciary is a mystery.
    12 Mar 2014, 05:50 PM Reply Like
  • s404n1tn0cc
    , contributor
    Comments (118) | Send Message
     
    Well I do Declare what"s this

     

    It's official Freddie and Fannie have gone into the Black. See here http://yhoo.it/Mhj7m3

     

    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.
    12 Mar 2014, 07:39 PM Reply Like
  • pak man
    , contributor
    Comments (3) | Send Message
     
    Don't know how this could be called socialistic housing. By keeping mtg rates low, aren't they encouraging home ownership. If interest rates go up, less housing. Less housing, less consumer spending and hence decline in the economy. So isn't the capitalistic markets benefitting from f and f?? And it is odd that the timing if the senate announcement came a day after the announcement that ff would pay off another 185 b in the next ten years. If citi bac jpm and aig were backed by the govt, why are ff d ifferent? Ff has an explicit gty vs other entities have an implicit gty. But a govt gty nonetheless. All entities were treated just the same during the crises. So why such a big stink on ff? And personally, with the large inflows from the bric countries in the 90s and early to mid 2000, they had to open up ff to allow for more housing. The govt had no choice.
    13 Mar 2014, 03:08 AM Reply Like
  • pak man
    , contributor
    Comments (3) | Send Message
     
    Don't know how this could be called socialistic housing. By keeping mtg rates low, aren't they encouraging home ownership. If interest rates go up, less housing. Less housing, less consumer spending and hence decline in the economy. So isn't the capitalistic markets benefitting from f and f??
    13 Mar 2014, 03:08 AM Reply Like
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