RE prices improving for like 10 consecutive months.
Delinquency rates dropping.
Harp reaching more and more people.
Banks settling losses.
SEC 33 on the horizon (distant granted 2014 is long term)
no way to forecast the BOTTOM line
the operating result IMO will be quite profitable
however - FNM sits on top of a TON and another TON of what I assume is grossly marked down MBS securities
At any point if FNM adds a charge for a further write down that will IMO swamp the operating result and could turn profitable operations - temporarily - into a negative quarter - on paper
Likewise - if based on a rising price for homes? - or better experience on the old written down paper - FNM decides to write up those holdings - watch out - the earnings will be huge
all IMO as I watch this stock - as an owner of common and much pfds - since BEFORE the decline over night
this junk can have gigantic profits, and yet the pps will not move.
Why is this?
Its because nobody in their right mind will invest into a government-controlled stock. Once the Feds got involved, this company was forever tainted and contaminated. Its ok to trade and play the pops whenever they happen, but to expect the pps to ever return to pre-c-ship levels is shear lunacy.
Personally, I dont see this mess ever seeing 1.00 again.
The government simply cannot be trusted, and the public has finally realized this.
GSEs are like Communist SOES. That is right, communist China has lots of state owned enterprises and they trade on the stock market just like GSEs. Many of them are hold overs from coooperative farms days. Perhaps our government is taking a leaf out of Mao's little red book. Could the Obama administration be going #$%$?
see the stock of GM or Citi or soon AIG
the markets have ZERO memory
right now - NO ONE - NO ONE knows what percent - 0-100 of the company the current equity own
right now - NO ONE - NO ONE knows what the future company will look like in scope size and job
thus the market - looking at the extremes keesp the stock trading but at very low levels
Using what I think is optimistic but realistic assumptions - I believe the current equity owns 20% of a 20-40B company --- at some point in the future (or common owns 10% and pfd 10%?)
but that is a GUESS GUESS
It's old news. We need a fwe more profitable quarters (there's no reason to believe otherwise), and show everybody (duh) that FnF are really paying DOWN the debts owed to Uncle Sam to realistically see anything meaningful happening.
Jack Lew's likely confirmation to the next Treasury Secretary is a good sign to retain FnF, whether in current forms or in new entities, and hopefully to start an orderly process to restore FnF's fair market capitalizations.