So you are stuck in the last decade.
At $80 a share... Fannie had 1/2 the business it has now and 1/2 the Fee % revenue (when they were demonized for trying to allocate risk).
So $80 x 2 = $160 x 2 = $320
This is the "potential" in raw figures.
I think you could figure up around $250 to $275 as a fair point - just cause.
So how does the look on a PE basis.... at $260 figuring a 12x multiple would be $21 a share in income.
In a regular economy that would be around $5.7B a quarter . - it did near $4 last Q in a cruddy environment of the Feds own making.
So.... how unrealistic are the $100+ estimates?
Thought you'd agree. .
Most people would agree at this point that a release is eventual.
Its going to happen eventually, might as well make it happen now and get on with it.
This would be in the best interest of the economy to just get it over with so we as a nation can move on.
Tell me why this isn't a gross over reaction in price?
Linn is hedged into the future with strong reserves. Even if it were to reduce the divi to cover the debt the multiples are still favorable.
Hard to figure 'timing'. At some point the pressure will be to much and this will blow. I've written several times if it goes to 10 it goes to 100.
They are going to refile in another district with a judge that is not tainted.
If these folks would just end the swipe. Recalculate and reallocate the interest rate and payments at 3% retroactively, They'd be owed $30 Billion in overpayments and building capital. That would mean an end to conservatorship in a year or so with over $50 Billion of capital. Job done.
After reading the narrative and commentary I can't help - maybe its my wishing - that things really turned today. I consider the discussions were not about winding down fannie and freddie; but more understanding how the fhfa met its goal fo sound and solvent. Operationally sound but now how to become solvent.
My worst fear is that the government would do a hook and lateral....
They'd enter a 4th amendment... convert the pspa $ to common shares at current market value - squashing us commoners. And then further dilute by "doing the warrant deal". That would dilute commoners by near 100%. Leaving the preferred's. But, by the same stroke of the pen Mel would deem all preferred converted to common and then dilute the fire out of them.
This would give the government near 98% of the entities. Which they then could sell for $400Billion. Thereby taking all of the profits and then cashing in on all of the equity.
So, both good and bad news. If they did the lateral... thing the lawsuits would flow. I'll be dead and buried before its resolved.
Since Ackman likes to include those bogus warrants the real target is $160 - $200. I'll take it.
This is a stupid statement about the judge.
Aren't they suppose to care about the law no matter what?
I mean, if ya'll recall a couple years ago the Hurricane in New Orleans, Katrina they called it. Caused a lot of damage, people were going nuts, total chaos, lots of the world is ending paranoria going on. If you recall, their were some dude shot and killed on a bridge. And after all was said an done some dude went to jail for killing him.
It was, like just because the world is going to Heck in a handbasket don't mean you can forget the rules.
Similar to this situation, just because of panic and nutzo people doing crazy things can't suspend the laws to meet the "whim" of the other people.
So, no . I don't buy it.
Just let fannie and freddie go!
Most everyone with any active brain cells that has studied the Fannie and Freddie situation know and accept that they were hijacked and taken over in a conspiratorial fashion by an imperialistic government bent on destroying them for some reason. That reason does not matter. What matters is what happened is factual.
Fannie and Freddie - neither were in trouble (even after the chicanery of the government to pose them in that light). But after an orchestrated set of lies; were invaded by the us treasury and other felons. Placed in the stockade and made to pay at first usurious rate (10%) v- 3% going rate; have 80% of their owners "ownership" stolen and further manipulated their financial statements using "cookie jar" accounting tricks that have lead many to jail (Just do a search on the subject SEC enforcement of Cookie Jar accounting). All proven to be lies upon lies upon more lies - a massive coverup.
So, why is no one in government doing anything about it. are they to perpetuating the lies and coverup.
When is this real story going to "break"! Where is the outrage. It took 7 years after a loved one of mine died at the hands of the VA that to become a story... What about this.
Thanks for the reply.
Heck yes i've heard of the 5th amendment.
I totally agree; a scenario i wrote about is 1000% wrong. And id be mad.
Personally, I see no real alternative but to end the sweep and return $$ back to fannie and freddie. I think the number is around $50 to 60 billion. And then stay in a "conservator" mode for 2-3 years, but being allowed to build capital thru earnings.
Once this occurs peg a "release" from conservatorship and payment by government of some settlement to shareholders; including canceling or voiding those warrants.
This is a 4-5 year play.
You don't understand do you.
The compensation the "government" gets from the GSE's is the ability to "manage policy through them"
This is the offset for their ability to borrow funds and buy loans that has historically offered access to the 30 year fixed rate rate loan.
Absent the government's meddling the GSE's would not be in this problem today; as they would have never underwritten the risk they bought into; because they were instructed to do so by FHFA to save the economy. Remember, the GSE's have always been "two of the most highly regulated businesses in the world" and see what it got us? What responsibility is the government taking for their poor decision making?
LOL... Chess... I don't recall seeing a recent proxy... then how can it be a duly constituted and elected board?