You know - you are right they should do that. But, for example laws are often changed and people not compensated for the effective taking... For example in South Carolina a few years ago they had these Video Poker machines the state outlawed them and didn't compensate squat. I think the government can change a law and as long as its not directed at any specific party they face no issues.... I think that is what is gonna trip them up, it will be that they will have to specifically "change the law" directed at these two entities and only these two entities and such they will have to compensate.
Problem is... once the private investors are done being raped over here.... do you think they'll be ever so inclined to put $$ intot #$%$'s folly? or the corkulator and lose more money - given the uncertainties of changing government "promises".
ITs a trust issue - and all about credibility - which the government's is dimming.
Just asking... general question... If you took 30% of or lets say you own want to own 200 shares. So you buy 200 and pay for it with 145 purchased shares and 55 margined. So you then get 9% on 200 shares and pay 4% on 55 shares. Is the extra 20% net income stream worth it?
OMG - what a head case.
"everybody knows" garbage out of his mouth....
Well no everybody doesn't know squat or they'd had this fixed.
What a disgrace to his constituents. They should send him back and put him in a home. He needs assistance.
What an amazing self serving - dummy. How does something like him actually get elected.
I'd really like to have a conversation with him and see how committed he is to his stupidity.
He has totally lost touched with any proximity to reality.
We showed very light volume friday after mid morning. If that continues, it will drift.- just a guess. I have to figure between the Bigs (fairholme, ackman, the capital investor in Tennesse, Mr. Unknown, and all the peeps on these boards, etc.) that 35-50 % of the shares are on ice. Maybe more. Then others are holding / trading ... but if not for shorting / or borrowing shares to sell.
Who is SELLING? Really ... Who?
I've read enough to know if there are no shares trading that there are forces that will... walk price down and try to enduce folks to sell out.
I would like to see these shares.. creep up in to the mid 7's ... and create a base... and then... into the 8-9's... If we get to 10... my gut is we get to 100.
NO WAY - The lawsuits and self dealing will not allow (hopefully) the warrants to dilute 5-1... hoping a compromise is a foot and the dilution instead of 80% is ... a palatable 15% or so.
Remember... EVEN After the dilution... that F and F will have to raise some fresh capital. Doing so... will depress the shares.... you could end up with 10B out standing at a share price of $40 a share.... where the governemnt rapes fannie for $160B..... at 80% or $80B at 20%... its. all in the numbers.
Wow... What a nice discussion. Not like the years prior... how remarkable.
Edsha and Stin and AirL - we've all been in Fly for a few years.
I continue to hold a position but will not add to it.
Management has lost its mojo and while there is certainly value in the planes and relationships, I don't see them knowing how to monetize it. Very disappointed overall and yes they are the runts of the liter now.. and there is likely less food for them to make it on their own longer term. I would expect some continued consolidation in the business amongst the largest competitors and frankly haven't sold because I do expect Fly to be taken out.
The urge to merge. There is no longer term reason for them to go in circles ... chasing their tail...
Management gets a C- at best.
My big concern are those warrants that Treasury "stole" from FandF.
The biggest thing we need to work on at this point should be dispelling belief and make sure the treasury - returns them to FandF. They were put in place to "secure" the preferred stock and now that the preferred stock has been redeemed in substance those need to be canceled. Unlike other Tarp related entities F and F have paid 10% rate and actually repaid the $$ without issuing STOCK!
To me this is the Key issue today.
People.. go back and read what was said / written when these warrants were "created" and what the purpose was and the intentions.. not to ever use them.
I can't emphasis this more... its critical to F and F recovering and raising capital at fair value.
Government is bad for people too... add that one. I don't see the government adding less government. In fact they write more stupid stuff than ever. So... Add that one.
I've written several times... that "if it goes to $10" it goes to $100. I still believe in this concept.
If not them ... then someone else would be on this story. Its too ripe. Too low hanging. And Too Juicy!
Good post Eck...
Also, Fannie over reserved its loan and mbs losses.
Take into consideration the 10% loans instead of tarp at 3%
I think you'd probably surmise that Fannie may not have really needed any money.
But, Fannnie (and Freddie) were actually stuffed full of cash by the Feds (by these reserves) in order to buy "toxic" assets and absorb losses. If you read the fed minutes... you will see that f and f ... actually contracted there business (SMARTLY) in order to reduce credit losses in 2008 ... but that when the feds took over... because there was NO PRIVATE BANKS LENDING they upped their business and bought paper... to grow to the size they are today. This is what the governemnet was wanting to unwind...
There is so much "self dealing" here as to make one sick ... Lots of fraud issues that will need to be fixed.
And... the taxpayers would have to compensate FAnnie for its "backing" of the affordable housing biz and homes in general. This is done with a fee. I see this as near net neutral. So yes the cost of capital would rise... but so would the income from invested $$. Meaning the spreads would stay very similar. So... no big deal... move on....
I get it... Buffett likes a "regulated" monopoly. He in fact loves it... he'd own the bridge into NY if he could. Which is why he loves the railroad. He also is for investments of "gotta" have companies... which is why he is in on Coke and AE. He loves a good story ... DQ and See's Candy for example and now Hienz.
Frankly i'd have thought he'd buy out something like WD-40 years ago. or such household brands as Clorox.
As to Fannie and Freddie; I'd think if he thought he could push from some separation from "government" policy making (regulaiton) that he'd be all over these two IF he thought they'd survive and flourish.
From this angle... I would not put it past him. The only problem is he could easily acquire 10% in each with a phone call. And it would be so accretive as to be mind numbingly insane. But, does he want to "be a me too" to Berkowitz and Ackman? Or does he care? Money is MOney and green is green.?
Could this be a case of too many cooks in the kitchen? That would keep him out? Or do they fall in line behind him ... all the way to the End Zone... and TD! I don't think he cares. So. He should be in.
Yep. But like Maloni wrote on his blog; he won't without "direction" of the WH / Treasury ... which means to me ... HE (FHFA) ARE NOT INDEPENDENT
Yes - they estimate $40 or so with "dilution". So... w/o dilution it would be $200 or so. Which is consistent with others and many would consider conservative. The big question for many is simply, will the government be allowed to steal 80% of fandf - for free. This is a 5th Amendment "takings" issue; I just don't see them winning.
I only wished
Fairholmes would get away from this one concept::
This is superb news
for all stakeholders, especially taxpayers via
Treasury’s economic owners
hip of 79.9% of the
Company’s common stock.
I just don't believe the fed / treasury is due this 80% business. Its a total THEFT - its such an over reach as to be totally slapped down and I wish they'd bust their chops on it.
There is no way treasry is due 80% of FandF for RAPING them.