Fannie Mae (FNM)
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FNM Forum Topics
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- General Discussion on FNM
- Forget the Moral Outrage: Just Restore the Mortgage Markets [view article]
- Fannie and Freddie: Bailout, CDS [view article]
- A Closer Look at the Treasury's GSE Preferred Stock Purchase Plan [view article]
- Paulson Rolls The Dice At Taxpayer Expense [view article]
- A First Look Inside the Fannie / Freddie Bailout Plan [view article]
- 8 Quick Comments on the Freddie/Fannie Bailout Plan [view article]
- Nationalizing Fannie and Freddie: Latest Move in the Housing Crisis [view article]
- Historic Financial Collapse Underway? [view article]
- Fannie and Freddie: 80% Dilution [view article]
- GSEs Into Conservatorship: Can Housing Stabilize Now? [view article]
- What Will Fannie / Freddie Mean for Monday? [view article]
- Bill Ackman's Letter to Paulson On Restructuring Plan [view article]
loading ...Recent FNM Articles
- Nationalizing Fannie and Freddie: Latest Move in the Housing Crisis
- Paulson Rolls The Dice At Taxpayer Expense
- GSEs Into Conservatorship: Can Housing Stabilize Now?
- Fannie and Freddie: 80% Dilution
- A Closer Look at the Treasury's GSE Preferred Stock Purchase Plan
- What Will Fannie / Freddie Mean for Monday?
- A First Look Inside the Fannie / Freddie Bailout Plan
- Fannie & Freddie - and Others - Overstate Their Capital Base
- Fannie and Freddie: We All Support You!
- Problematic GSE Bailout
- Full List of Articles »
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Father
Historic Financial Collapse Underway? [view article]
Richard Neva I suggest you pick up a copy of "The Road to Serfdom" by F.A Hayek. Socialism, along with fiat currency, are major contributors to the situation at hand. Centralized power and "planned economies" are the things of despots, I hope for your sake we get an Augustus and not a Nero.I am glad however, that many of the other comments on this board seem to reflect a sound understanding of history and our corrupt system. It is good to see that most of us are not "reactionary"... but more thoughtful in our approach. We certainly should not seek the largest nipple to nurse from like Richard Neva suggest. Let the markets work and to those that are financially incompetent then let them take accountability. Reply
Fannie and Freddie: 80% Dilution [view article]
Another reaction:BASEL, Sept 7 (Reuters) - Hong Kong welcomes moves by the U.S. government to seize control of mortgage finance firms Fannie Mae (FNM:$7.04,00$0.62,009... and Freddie Mac (FRE:$5.10,00$0.15,003... as this should stabilise the stressed market, its central bank chief said.
Speaking to Reuters, Joseph Yam, who heads the Hong Kong Monetary Authority, said the bailout of the two government-sponsored Enterprises was an unusual and "possibly controversial" step but necessary given the circumstances.
"As investors in debt issued by the two GSEs, we of course welcome the measures," Yam said.
"It should have a useful, tranquillising effect on the very stressful market," he said on the sidelines of a bi-monthly meeting of central bank governors at the Bank for International Settlements. Reply
Forget the Moral Outrage: Just Restore the Mortgage Markets [view article]
Mr. Borchstein:A reasonable person can see that a financial disaster may be just around the corner. These bailouts and guarantees are nothing but a bandaid to help prop up a failing financial system--a system based on uncontrolled borrowing made possible by printing more and more fiat currency.
The model is terribly flawed. The mounting debt, both public and private, is no longer sustainable. It is like an individual who needs to borrow from one credit card to make monthly payments on other credit cards which are over the limit. Eventually, one runs out of credit and defaults. "Capitalization&q... a euphemism for unfettered borrowing, is just sending us down a one way street to failure.
If there is a real solution to our financial problems, I would certainly like to hear it. It seems to me that the system needs to wash out the corruption before it can be viable again. Reply
GSEs Into Conservatorship: Can Housing Stabilize Now? [view article]
"Just because it's government backed doesn't make it good and taking on this much debt doesn't make the treasury's sheets any better either."What a stupid comment. Government backed is risk-free. You'll see mortgage rates drop now. Watch it happen. Paulson may be a lot of things but he's no dummy and this is all planned. Reply
e
GSEs Into Conservatorship: Can Housing Stabilize Now? [view article]
So investorslive, how do you explain the spread between the fed rate and mortgage rates? The fed lowered rates and the mortgage rates went up. What makes you think having the government explicitly back $5 Trillion in bad debt will help the credit market or improve the spreads. Hank just affirmed to the world that the GSE's paper is toxic and virtually worthless. Just because it's government backed doesn't make it good and taking on this much debt doesn't make the treasury's sheets any better either. Your post might excite day traders, but it is just wishfull thinking. ReplyA Closer Look at the Treasury's GSE Preferred Stock Purchase Plan [view article]
Oops, typo. I meant to write above that it always seemed obvious to me that the govt's implicit guarantee for the GSE's would apply to the debt and *not* the shares, or at least the debt in preference to the shares.Reply
e
A Closer Look at the Treasury's GSE Preferred Stock Purchase Plan [view article]
There's a web site that shows which institutions owns what and how much they traded each day, but I can't remember what it is.The banks and mutual funds hold large portions of both preferred and common both. They bought it up as a safe investment because of the implicit guarantee and high divi's, even with losses. Sovereign Bank holds $600 Million worth which will wipe them out if they lose it. Lots of mutuals bought in as a stable investment for their retired investors. Many of them have been hit hard.
Common and preferred shareholders are going to bail at open which will further wipe out any value left in the GSE's. It's going to take $40 billion just to get back to Friday's levels, so don't look for any liquidity for the banks.
Another great move by the Bush administration. Reply
e
Fannie and Freddie: 80% Dilution [view article]
www.investorslive.com/.../ Replye
GSEs Into Conservatorship: Can Housing Stabilize Now? [view article]
www.investorslive.com/.../ ReplyA First Look Inside the Fannie / Freddie Bailout Plan [view article]
I am confused on how America can keep propping itself. What exactly do we do for other countries? We borrow money from China so we can consume their goods and buy our houses... We use others money to buy vast amounts of oil... What do we offer in return? Why do companies keep borrowing money to us? We can't take every one on in a global fight. So what does the world fear in saying no? ReplyWhat Will Fannie / Freddie Mean for Monday? [view article]
daytrading: Bondholders are not equityholders. They are debtholders. If FNM/FRE did not make good on their debt it would be a default and lead to bankruptcy. Then you'd have problems with CDSs, other countries' relations with the US, bank solvency, massive damage to bond funds, etc. Anybody still holding the common today is a speculator and deserves what they get. The same is not true of debtholders - FNM and FRE debt has been second only to Treasury debt for a long time and it's a much more significant issue than the price of the stock.While we're at it, in order to understand the impact on banks we have to look at:
a. how much preferred and common stock they hold (though any bank still holding FNM or FRE common should also be taken over by the government, as they have failed risk management) - this will be way down tomorrow.
b. how much FNM and FRE debt they hold - this will be way up tomorrow and is a significantly larger pot than the above pot.
c. how this affects bank's access to capital and ability to securitize mortages (complicated, may take some time to figure out). Reply
A Closer Look at the Treasury's GSE Preferred Stock Purchase Plan [view article]
Where I can find estimates of the absolute and relative amounts of GSE preferred, common, and debt that is held by various financial institutions?I'm a little surprised by Patsy's suggestion above that U.S. banks hold a lot of preferred stock relative to the size of their GSE debt holdings, and I'd like some pointers to research on this topic.
Beyond that, I'll offer that it always seemed obvious to me that the govt's implicit guarantee for the GSE's would apply to the debt and the shares. I'd have a hard time imaging it otherwise no matter who were the holders of each type. But if it was actually true that banks currently hold a lot of preferred relative to their debt offerings that would be worrisome.
Reply
69
A Closer Look at the Treasury's GSE Preferred Stock Purchase Plan [view article]
Reducing the value of preferred and common to junk is appropriate, and probably understood by the last six months of investors, who have turned over this entire float at least three times. Maybe there are some institutions out there with $70 shares still on the books, but most retail folks are in these firms around $7-10 or so if they are still holding.There will be a stampede tomorrow by folks who'll bolt in either direction, first to think this is some kind of new guarentee, then those that read the fine print and find out, govt GSE preferred is WORSE than private banking preferred, a quote from Paulson, traditionally lost probably SEVENTY YEARS.
After all, he just found out via JPM this is a "flawed model" and S and P took till conservatorship was announced to downgrade the stocks. Now that takes genius, doesn't it?
The truth, the common and preferred will be all over the place. Reply
What Will Fannie / Freddie Mean for Monday? [view article]
Hey lanaslinesdotcom,Buy stocks that are "positioning themselves". Can you give us the names of a few of these gems? Is there a fund manager alive who hasn't been trying to find these gems forever? I direct you to the mutual fund statistics for the past 8-10 years. Seems to me that Cash has been the best asset to hold over that time and zero risk. But I guess that there are many out there who just can't get over the "buy and hold" mantra that Wall Street has been selling for 30 years. Its over. Reply
69
Fannie and Freddie: 80% Dilution [view article]
FED said they'd NEVER EXERCISE WARRANTS, so the warrant are a cap on the preferred, AND, a cost free "gift" to FNM/FRE--in "payment" for Paulson's woeful last minute decision that after 70 years, the "business model is flawed".Rubbish. The mortgage granting model was deregulated to liar ninja loan status, the reserves these two firms fine, if regulatory guidance was enforced and in place. They said as much, their fault, their mess to get us out of.
The taxpayer pays, and the shareholders scapegoated for management incompetence, which escapes witht their millions. Japanese and our buddies the Chinese (!) get to continue to fund our wars, and the small investor continues to emulate Barney Frank, whether so disposed or not.
Paulson wisely left it to the markets to conclude the wipe out scenario this article incorrectly surmizes. S&P, those great harbingers of truth, downgrade the preferred and common to junk AFTER CONSERVATORSHIP?
Now that's the kind of forward thinking analysis we pay for....
In truth, this speculative stock will be all over the place the next three days. What a farce. Daytraders delight. Reply