Don't Be Out Of Fannie And Freddie Leading Up To Q2 Earnings
Freddie Mac reports Q2 Earnings on August 2, and Fannie Mae reports Q2 Earnings on August 4.
The sharp decline in Treasury yields means that another draw is almost certain to be required.
Due to the complications that another Treasury draw would bring about, there is a slight possibility that Treasury will allow the GSEs to be recapitalized before Q2 earnings are announced.
Declining US 10-Year Treasury Yield Means Another Treasury Draw is Almost Certain
Both Fannie Mae's (OTCQB:FNMA) and Freddie Mac's (OTCQB:FMCC) earnings are sensitive to interest rates. When Treasury yields tumble, both the GSEs record losses on interest rate sensitive derivatives.
In Q1, net fair value losses were $2.8 billion for Fannie Mae and total fair value losses were $2 billion (after-tax) for Freddie Mac. Fair value gains (losses) fluctuate with the movement of interest rates. Interest rate volatility results in volatile earnings quarter-on-quarter for both Fannie and Freddie.
Q1'16 Q4'15 Q3'15 Q2'15
Net Fair Value Gains (Losses) ($2.8 billion) $135 million ($2.6 billion) $2.6 billion
Fair value gains (losses) can be rather volatile and can shift from gains to losses on a quarterly basis depending on interest rates.
Anyone notice that IHub is not updating for FNMA? ot since 11:30AM today–Friday.................
What the hell does this mean anyway?
MOTION TO SUBSTITUTE FEDERAL HOUSING
FINANCE AGENCY AS PLAINTIFF
The Federal Housing Finance Agency (the “FHFA”) hereby moves the Court for entry of
an order substituting the FHFA as plaintiff in the above-captioned action. The grounds for this
motion are set forth in the Memorandum of Law in Support of Motion to Substitute Federal
Housing Finance Agency as Plaintiff, filed contemporaneously herewith.
possibly--maybe the next day--which is Friday the 5th----could be a lot of shorts sweating over the weekend---ahem---Yank
Don't Be Out Of Fannie And Freddie Leading Up To Q2 Earnings http://seekingalpha.com/article/3987828-fannie-freddie-leading-q2-earnings
Restating earnings, as a result of accounting fraud, will result in immediate capital addition---MUCHO BIG
$11Bill Rev/1.16 bill shares X 17 P/E= $161.00
$40/share….perhaps after a 4/1 forward split–warrants are invalid= the biggest variable is what the P/E should be
P/E is variable—floating target===could be a lot higher–like 40
Net income/outstanding shares * P/E multiple==PPS
thus 11/1.16*40===PPS of $379.00
PPS should be $379.00 $11bill/1.16X P/E 40==$379.00
So treble damages—-=$483/pps…that’s with P/E of 17===could be higher–A LOT===think like TRUMP—not only do we have TBTF
screwing us–now it’s confirmed that accounting Fraud screwed us too–Un-F*****ng believable–Deloite will probably go the way of Price Waterhouse–IMPLOSION. ..the sky is the limit as far as the PPS is concerned