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Federal National Mortgage Association Message Board

  • chrisanja chrisanja Jan 9, 2011 3:51 PM Flag

    One last time - 3 weeks away

    I once found an article that was written a couple of weeks or a month before c-ship.

    Remember: Bazooka was out and FnF were 'safe' (except Jim Cramer was watching the price of the common and saying quite the opposite - that someone knows something and they should halt trading in FnF common). We NOW know that Paulson was shopping the idea of the c-ship and has Morgan Stanley take on the job for $64,ooo. (And the knowledge that they could short FnF with reckless abandon).

    The article: Said that Jr. pfd. would probably be safe. After all, the govt. had backed up the regulators and called the capital in jr. pfd.s Tier 1 safe.

    The "funny" part: The article estimated that *if* the govt. surprised us and halted the non-cumulative preferreds that the price COULD GO DOWN To $5. Yes, $5 on the $25 pars.

    The article, very incorrectly, assumed that the US govt. would someday be forced to honor the commitment and sure, people & institutions would have to sell or be frustrated.

    This is where every naysayer needs to pay attention. The time for c-ship will NOW have a clock running. The plans that will come from Geithner may be:

    a) a completely new structure that sees the ultimate wind-down and simultaneous wind-up of a WS funded co-op or a bank-centric Covered Bond system.

    b) a transformation and reforming of FnF to a co-op which could be bought out by the WS and big banks.

    Perhaps oversimplistic, but Congress and Tsy can write themselves out of eixstence and take a huge loss (also writing FnF into the Federal budget as an official ward of the US taxpayer) or they can rejuvenate and re-capitalize using common stock as they have for every other US venture - C, AIG, GM.

    Will they give WS and big banks the mortgage industry or will they retain FnF for goog and bad times, using tried and tested methods of recapitalizing?

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    • "would-be-basket-fillers"

      --awesome! let's start with Paulson!

    • "Hypothetical question here, what would 'austerity measures' look like in the US?"

      In NYC it would look like teacher and fireman layoffs, which are in the works. Doubt a Bloomberg or a Sharpton gets beheaded. ;)

    • Hypothetical question here, what would 'austerity measures' look like in the US?

      higher gas, higher taxes, less exemptions, etc etc? Fill me in. Oh, and I've been expecting a french-style revolution to occur here at some point in my life-time. It won't be national, not all at once, anyhow, until the pols themselves see the flames headed in their direction, at which point they'd handily jump in tune with the populace, and a hanging we will go.

      One major expectation of the French Revolution was the extermination of aristocracy. Of course, Louis lost his head, but many would-be basket-fillers got away, leaving more innocent yet serviceably deserving folk to dull the guillotine.

      4 hours of sleep and you'd be rambling too!

    • Rosie
      Yes, - it's time!
      (Just wonder - how they'll ACT? The whole task of re-building F@F looks like a lose-lose situation)

      So far our whole way of life is a spectacular triumph of the Blah:-)
      The Dems believe everything; and what they don't believe, the Repuks do. Neither of them stands for anything they believe in, anyway.

      And from this, we've built a great nation?

      Methinks, if in charge:-)) I'd rather put my head in the oven, than act!

    • G12: events in the ME are rather above my pay grade. I sincerely hope the will of their people is honored no matter what the outcome.

      Seen from the middlewestern USA, the situation appears on a knifes edge and could go either way with slightest provocation. Thoughtful careful words are wanted / deeds are needed.

      Here in the USA our credit line is _way_ overdrawn as you seem to suggest. I would be much less worried about this if others were more worried ...

      instead our People seem otherwise preoccupied with mega 'mounts of mindless brain-candy. Movie stars and swimmin' pools (Jed).

      It's (way past) the time to be serious.
      Tick-tock, the debt clock spins:
      Austerity is coming.
      Our turn?
      JMO. GL,

    • RS
      I admire your vision:
      *A nice fantasy monkey, but 'Mericans are too busy watching Dancing with the Stars and American Idol to bother with small matters like the Entities ...

      just so long as the trains run on time.
      And the ATMs work properly.
      And so on ...*
      - what do you think about bloody uprising in Tunisia and Egypt?

      As far as I know, Dancing with the Stars and American Idol, other TV programs were available and properly translated there:-)

      The ATM might be running properly, but your debit card busted - could a manmade nightmare come to 'Merican Land of the Braves, LOL?

    • gmonkey: chuckle ... no need for a scathing retort, though I wonder why the Repuks get chastised (it was a couple Republicans who stood up for the community banks (and Entities in the process) while Democrats have done what? Answer: more of the same for more of the time.

      The two parties look equally inept and incompetent from where I stand, err, sit.

      "... American's apathy will be replaced with outrage and @#$% will start hitting the fan ..."

      A nice fantasy monkey, but 'Mericans are too busy watching Dancing with the Stars and American Idol to bother with small matters like the Entities ...

      just so long as the trains run on time.
      And the ATMs work properly.
      And so on ...

      </> scathing retort / counter-rant / also-rant

    • very disturbing to think they may issue just a paper

      it should never have been put in c-ship anyway, fasb screwed them with accounting rules that shouldn't apply to gse's the same, creating an immediate need to amass billions to fill this just made hole

      then they said we'd have plan by this time last year

      dodd-frank left it out, oops we need another year, but if you give us this time, we'll figure it all out, ok?

      ok, well we can't seem to make the jan 31 deadline, so 2 years wasn't quite enough time...huh???? give us another 2 weeks (what a bunch of sorry a-holes)

      repukicans serve the banks and clearly wanted gse lucrative biz (god save us from the greed party)

      democraps are too stupid to steal from taxpayers as well or as largely as the gop, and stick to liberal tax and spend bs

      treasury is appointed, TG should do the right thing and solve the problems if they have identified them yet

      funny that the plan to fix the gse's was supposed to arrive about the same time the FCIC report was to come out, wouldn't those charged with fixing the gse's want to know how all this happened in the first place?

      truth and politics don't mix, TG, Congress, Wall st, the gSE's all already know why the crisis happened. Repuks wanted to pin it on gse's, bail out the banks and give the biz to them and the media was happy to run that story as if that makes sense. are you f'n kidding me? Wall st has f'd the world with their greed and they were the first one's bailed out-unless people are brought to justice and things really change, American's apathy will be replaced with outrage and shhiitt will start hitting the fan

      why do i bother with these rants? preachin to the choir except RS, from whom I expect a scathing retort

    • What happens in three weeks?

    • In the past 3 weeks, FNMAS has gone to 1.20

      I wonder why Boiler Room flunkies were not here telling us that we should be selling? (Oh, they were - remember Red G.?)

      Now, we have new ones.

      "It has risen a lot, so maybe you should sell?"

      "I'm new - just bought yesterday. Man, it has gone down already and now, I think it could go back to .50. What should I do?" (how about the guy that bought yesterday, saw it GO UP, and then announces that he's upset with the decision and now wished that he was short?!)

      Funny, but those "Boiler room tactics" *may* work on some other 'penny' stocks, but I certainly do not hope or think they will work here.

      You see, this is binary event stock. Turned on, it's worth $25. Turned off, it's worth, well, nothing.

      When it got turned off, it has gone from .40 to 2.00 to .32 to 1.20

      Where will it go from here?

      There seem to be more people thinking it will be turned 'on' at some point. Facts are:

      1) C-ship was NOT supposed to last 2.5 years
      2) TSY is to submit plans for how to end c-ship
      3) Economy and housing improving steadily
      4) Common stock has been the way US Govt. has gotten out of all their other investments. Even without the 4B of warrants they are sitting on, the sr. pfd. conversion to common is very likely.
      5) Jr. pfd. will get that $25 (or close, if also converted) if the US govt. has a common restructure plan considered.

      Most of the YMB here have held and my confidence grows every day that ~$25 will be the result and not zero. I felt that way when it was .35 and Red G. didn't talk me into selling.

      Boiler room flunkies - keep coming, but I'm not budging.

      • 1 Reply to chrisanja
      • >Most of the YMB here have held and my confidence grows every day that ~$25 will be the result >and not zero

        I can only hope - I got in at about $14, and then held on when it got down less than 50 cents and was delisted. I actually invested almost 20% of my IRA in this, when I read some articles online that stated that the stock was backed by the US government, and that they could not afford to stop paying the dividend, because of the side effects to the economy. So much for that. I thought it was a safe investment which would have low volatility.

        At this point, I'd be happy to get my $14 back, but of course I'll take the $25 if it is offered!

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