Seeking Alpha

Ackman's slide deck on the GSEs

  • Now making the rounds is Bill Ackman's 111-page slide presentation laying out the bull case on Fannie Mae (FNMA +2.9%) and Freddie Mac (FMCC -0.7%)
  • Yesterday: Ackman pitches Fannie and Freddie at Ira Sohn
  • Ackman notes much of the GSEs losses during the financial crisis - which pushed their capital levels far below minimum requirements and precipitated the bailout - were due to credit provisions. What actually happened, though, were losses of "just" $102B, or $142B less than the cumulative provisions taken from 2007-2011.
  • Further, much of those losses were the result of an ill-fated move to guarantee Alt-A and subprime loans. Losses from just the core portfolio of prime mortgages would have been only barely enough to push the GSEs below their minimum capital levels.
Comments (13)
  • Adam Young
    , contributor
    Comment (1) | Send Message
     
    Boom Roasted! Thanks for coming out Treasury and FHFA! Lockhardt should be on trial for gross negligence. Hey Wilbur Ross..... Better cover your shorts!
    6 May, 12:37 PM Reply Like
  • dindin21
    , contributor
    Comments (45) | Send Message
     
    Wait only 111 slides? I will only be convinced if there are 300.
    6 May, 02:01 PM Reply Like
  • Brian Sanders
    , contributor
    Comments (794) | Send Message
     
    very good point.
    7 May, 03:39 AM Reply Like
  • BULRUN100
    , contributor
    Comments (205) | Send Message
     
    Goverment have their money back plus and can gain 300-400 billion more when all is said and done. If the general public knew the government wanted to throw away billions just to close Fannie and Freddie what do you think they'd say. There is part of your Medicare fix morons!
    6 May, 02:15 PM Reply Like
  • Caludio
    , contributor
    Comments (221) | Send Message
     
    to BULRUN100
    you just hit the nail when you said "if the general public knew" . That is exactly the problem that we have. The general public doesn't know even what Fannie Mae is , let alone what is going on.
    We have to do something to make the people aware that a group of senators are trying to kill their dream. We should organize weekly rallies in different cities to wake up the media !
    I already have a bumper sticker in my car that says
    DON'T KILL HOME OWNERSHIP!
    SAVE FANNIE MAE!
    7 May, 08:20 AM Reply Like
  • halflink123
    , contributor
    Comments (269) | Send Message
     
    Can't invest in anything that's part of the too-big-to-fail Wall Street cabal. This monstrosity also misallocates capital in the United States in alarming amounts, shifting investment from productive assets into housing. No no no Fannie Mae is one of the biggest problems in America, it should probably be disbanded. Does way more harm than good, keeps house prices artificially high. No FNM is a disaster
    6 May, 03:02 PM Reply Like
  • Caludio
    , contributor
    Comments (221) | Send Message
     
    The consequences of winding down Fannie are so bad that it will never happen.
    7 May, 05:39 PM Reply Like
  • BULRUN100
    , contributor
    Comments (205) | Send Message
     
    Halfwit123......Haha! Is that you Mr. PRESIDENT.
    7 May, 05:57 PM Reply Like
  • bbro
    , contributor
    Comments (9741) | Send Message
     
    "Further, much of those losses were the result of an ill-fated move to guarantee Alt-A and subprime loans. Losses from just the core portfolio of prime mortgages would have been only barely enough to push the GSEs below their minimum capital levels."

     

    The point being if you go back to lending standards with adequate collateral and
    decent credit history it would be a viable operation. GSE's however have too many dim witted
    politicians (from both sides) engaged in the conversation...
    6 May, 03:30 PM Reply Like
  • evan.prospect
    , contributor
    Comments (694) | Send Message
     
    Wind these babies down...I want them to be totally privatized in 10 years because where in the Constitution does it enumerate the powers of the Federal Government regarding housing?
    6 May, 04:57 PM Reply Like
  • Caludio
    , contributor
    Comments (221) | Send Message
     
    It will not happen. We need FnF to stay FOREVER. Otherwise we will sink into a deep depression. Nobody wants it for America
    7 May, 05:37 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (874) | Send Message
     
    After reading the various above comments the ONLY thing that is fairly apparent is that there are a lot of people in the United States that would rather cut off their noses to spite their face for partisan political ideology reasons then make an easy buck.

     

    "Stupid is as stupid does" --- Forest Gump

     

    Assuming no macro economic issues in the future, both Fannie and Freddie could easily triple in the next couple of years. I said this two years ago (I was too conservative in my estimate) and I'll say it again.
    6 May, 06:38 PM Reply Like
  • BULRUN100
    , contributor
    Comments (205) | Send Message
     
    Unfortunately the bumbling fools up in Washington are in it only for themselves. I think iq test should be mandatory when sworn in to office then check every couple days after. Dumb must be in the water or whisky in Washington.
    7 May, 06:02 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector