He will do whatever Obama ask him to. In this budget squeeze time, Obama needs all the pennies he can get from FnF, so don't expect a quick release of C-ship. Still, it doesn't matter because court will make it happen regardless...
I believe this is the moment like a few before when the floodgate is opened, torrents will ensue. Remember the time when netzero was a "pipedream", or settlements with big banks were "wishful" thinking? Politicians have played there cards and they have no tricks left to stop FnF. Court judgments will be the last draw to release FnF from C-ship, and it will happen by next summer...
So, how's the winddown possible? Delinquency rate drop also accelerated in October! We'll see Q4's result much better than Q3, and more than $10B and definitively put FNMA way beyond netzero!! Let's hope a steady runup to $5+ by early next year, in time to get really accelerating for the lawsuit court actions....
Sentiment: Strong Buy
We all have much to thank for this Thanksgiving, thanks to FnF!! Happy Holidays!
I can see $3.00 a few times between now and year's end, but averaging in the range of $2.80 - $3.00, still not bad at all if you see where FnF have come from merely a year ago....
What about all the profits from this point and on, still all swept to Treasury? Most "experts" expect any reform, even signed into law, would take years to accomplish.
How much time are you talking about? And, how long do you think the dividendes will start flowing our way?
It took past two days to recover a day's drop prior. So I expect tomorrow to be still volatile but with $3.10 EOM. Over the holiday season, I expect FnF to swing back and forth but mostly in the low $3.00 range. Still, it is better than the $2.2 - $2.4 just a few weeks ago. $1 a month gain on average is not a bad thing at all...
In all fairness, DeMarco has done a much better job than other politicians. I expect the CSS to work and pave the way for an orderly transition of FnF shares (both preferreds and commons) to the CSS, eventually, unless, of course the lawsuits and Congressional bills get in the way which is highly likely.
So, "Our goal was never to make a profit" from GM. FnF are churning out huge quarterly profits and we are shutting them down. Less than a quarter's earnings will pay for $10B, so don't worry, Uncle Sam, you have your FnF big brother and sister to cover for you - FOREVER!
There are a few people like dgplexus2 who bought lots of FnF at pennies so it's a no brainer to sit on the shares at a price of $2.50+. They have already appreciated maybe 600-700%. Once the PPS is getting higher, fewer people would be willing to take the risk (it's human nature) with lots amount of money. I can see people still will be willing to buy a few thousands here and there, but not in the range of 100K+ (which I believe dgplexus2 is holding now).
For 100K shares of commons bought @ $0.30- $0.40, we are looking at "just" $30K-$40K. At today's price, one could only get maybe 15K shares with that investment.
So, it's all relative. I am also sitting on a large pool of commons (disclaimer: I am not a professional trader) and got in @ $0.40 in June 2010. My potential multiplier for gains is probably greater than most people who only bought after March 2013.
The $13B is for commons only, right? Doesn't treasury also own senior stocks? Uncle Sam hasn't completely sold its remaining GM shares because at the current price, taxpayers will lose money from GM's bailout (p.s., I believe Chrysler had paid all the bailout money back). So in a way, Uncle Sam is just like us, waiting for GM's stock to appreciate further to relinquent their preferred shares.
The preferreds are much more valuable, even at today's prices.
The anti-GSE sentiment from politicians is all politics, and nothing else. If politicians really want to do the right thing, they should study what have been done (and reformed) on FnF, relative to the go-go years prior to the 2008 meltdown. We all educate our kids on lesson learned, but politicians (most of them lawyers) did not seem to have learn anything.
The title of the wired news was misleading. Usually, when "U.S." was used, it was either State Department or DOJ. This was just coming from a guy's mouth and at best just a trial balloon to test the market's sentiment and to hold certain position. Neither Gene Sperling nor the White House could legally do anything on FnF - it's Congress. Speaking of which, the more dysfunctional the Congress is, the more advantageous to FnF beyond netzero to demonstrate there have been fixes to past "sins". Congress should now focus on what actually had worked in the past 5 years from the GSE's. Opening old wounds does not help moving forward.
Politicians are great actors so don't expect a confession session or a U-turn. Still, a hearing is a record so better having advocates than absent.
OK, the same Gene Sperling nonsense got picked up by 3 Yahoo reports today alone. For the laymen, it'd be like a series of bad news for FnF but in actuality, just another political move to dampen the inevitables....