% | $
Quotes you view appear here for quick access.

Federal National Mortgage Association Message Board

  • jupiter_symphony33 jupiter_symphony33 May 30, 2013 11:45 PM Flag

    FNMA considerations - serious investors only

    I agree with Nader's POV on this one and don't want to pass up the opportunity to buy a distressed company showing great potential After the recent price fal I am tempted to scoop up some shares as an intermediate to long term hold.
    One big concern: seems like for shares to acquire value FNMA needs to be privatized, but this outcome seems highly improbable based on currently available info. Are there any true investors in this stock? Message board seems like mostly gamblers, some short, some underwater, all using CAP LETTERS to push their agenda. Is it possible to build a case for buying this stock based on something other than hope? Would like serious longs to respond to points raised in the article below. Are they legit?

    Article excerpt:

    Investors betting on junior preferreds and common shares are hoping the record profitability will soon allow the agencies to repay the government and offer investors a chance to recover some of their investment.

    But there is no provision in the bailout agreement that allows the agencies to repurchase the senior preferred shares from the government and become private.

    Political analysts say shareholders betting on junior preferreds and common shares are in "total fantasy" as the government seems to have little inclination to change the status quo.

    For one, the agencies are now government cash cows, filling the Treasury's coffers and reducing the deficit .

    For another, there is no desire on either side of the political aisle to return the GSEs to their former quasi-government selves. Policymakers agree that they need to wind down the agencies, but there is no agreement on how to do so without hurting the already fragile mortgage market.

    Still hedge funds are piling on to junior preferred shares which has a higher claim on profits than common shares. They do so knowing the political risk is considerable but some believe they will be able to win their case in court, if necessary.

    Common shares, however, are viewed by

    SortNewest  |  Oldest  |  Most Replied Expand all replies
2.130.00(0.00%)Nov 24 3:58 PMEST