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Federal National Mortgage Association Message Board

wynkwyn 25 posts  |  Last Activity: May 9, 2013 8:49 AM Member since: Mar 31, 2013
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  • From AmeriTrade. Also, "7:36a Fannie Mae Doesn't Know Whether It Will Continue To Exist After Conservatorship (Dow Jones) " So, the source is "Dow Jones".

  • "American Funds’ $78 billion Capital Income Builder fund, which owned about 12.5 million Fannie Mae shares as of Jan. 31." Why is a mutual fund that says it specializes in buying income-producing securities and 'companies with proven records of increasing dividends' owning these stocks"
    The NYT author raised the question, but, unfortunately, he wasn't able to answer. Are American Funds staff also "fools"?

  • The last several paragraphs are exclusively on the GSEs. The issue is left open, so it's not bad at all. Here they are:

    "Until the government decides what to do with Fannie and Freddie, the Treasury can milk the billions in dollars it gets from the agencies.
    Some investors are betting that the housing giants will soon repay the government and have money left for shareholders.
    That idea disregards political reality, according to some analysts, since neither party has any desire to return the agencies back to their private form.
    The budget proposal may contain some language that allows for private capital to return to the mortgage market, such as further increases in the agencies' guarantee fees and charting a path towards sharing credit risk. "

    Will the government be so foolish as to kill its cash cow summarily?

  • The article is interesting to read. Bud, the last paragraph (Asset Sales) contains something difficult to understanding. It runs:
    Vanden Houten said the "firms may use asset sales to come up with the money for any unusually large payments tied to the non-cash accounting gains", ...."they probably will turn to the debt market, creating additions to their interest costs"... In January, Fannie Mae’s portfolio of liquid investments jumped by almost $28 billion, a sign it “may already have taken the first step toward raising longer debt for a Treasury payment,” Does that mean FNMA is aiming at paying off debt to the Treasury by selling assets and drawing money from the debt market? Does anyone one have a better explanatioin?

  • With billions of profit and a relatively steady profit prospect, do the two GSEs look like a man dying of a terminal disease? It's time for our leaders and law-makers to have a second thought. Congressmen and senators presumably don't have any irreconcilable vested interest againt the two institutions, do they?

    Sentiment: Buy

  • Reply to

    common/perferred difference?

    by thetomw2000 Apr 7, 2013 2:14 PM
    wynkwyn wynkwyn Apr 7, 2013 5:00 PM Flag

    Does that mean: whatever is good to Fannie and Freddy must be bad to congressmen and senators? And what ever is bad to Fannie and Freddy must be in the interest of Congressmen and Senators? The two sides are irreconcilable in interest? What's the rationale under this logic? Then, how about the American people and US economy? Whatever the outcome of the two GSEs will not affect them?

  • Since the start of the recession in 2008, we heard a lot of how big companies like Golden Sach, AIG, GM survived through timely bailout or restructuring and thus were able to turn a new leaf. If that's the case with these companies, why NOT GSEs? Is there any absolute reason or obstacle that must seal the fate of the two GSEs and any previous resolutions or agreements that are absolutely irreversible EVEN when both Enterprises have shown steady profitabilty and vitality?

    Sentiment: Buy

  • Reply to

    common/perferred difference?

    by thetomw2000 Apr 7, 2013 2:14 PM
    wynkwyn wynkwyn Apr 7, 2013 4:04 PM Flag

    Well said that "Commons and Preferreds are all in the same boat "

    What is critical for shareholders in both categories is to see the GSEs re-emerge after necessary reform or restructuring that is good and healthy for the mortgage finance system. Since banks, or AIG and GM can survive through crisis and restructuring, why not the GSEs? So long as the two GSEs are profitable and can maintain their profitability, there should be a solution that is good fot the two institutions as well as good for the recovery of thenation's economy and hence, happy for all..

    Sentiment: Buy

  • Reply to

    Henry Paulson's opinion means...

    by patrickmecimore Apr 7, 2013 2:18 PM
    wynkwyn wynkwyn Apr 7, 2013 2:35 PM Flag

    The remarks of the former Treasury secretary who helped place the GSEs under "Conservatorship" further exposed the issue to the public for an open debate.  Nobody denies the share of responsibility of the GSEs in the housing bubble that caused the current recession and nobody denies the GSEs need "overhaul", reforming, etc.  But, what about the banks?  Did they do any better in the whole financial crisis?   If they had been clean and had not passed on bad mortgage loans to GSEs, they would not have been demanded to pay huge amounts of settlement money or buy back bad loans from GSEs.   Then, take Goldman Sachs for example.  Paulson was its CEO before coming to head the Treasury.  That bank was near bankruptcy in 2008 and survived only through a multiple billion bail-out from Warren Buffet.  And only recently a former Goldman Sachs trader was reported to admit guilty to a fraud concerning a 83 billion affair.   Banks or GSEs, each has its own problem and they all need reform and "overhaul", but such reforms or re-organization should be done in a way that is best for the recovery of  US economy and hence best for the nation as a whole.

  • wynkwyn wynkwyn Apr 5, 2013 3:18 PM Flag

    The 11.603B is marked on page 16 (I'm sorry, it's 16, not 18) of the same document as "Perferred stock dividends", NOT the 4.224B of "Undistributyed earnings available for distribution to senior preferred stockholder". It's really mind-boggling.

  • wynkwyn wynkwyn Apr 5, 2013 3:12 PM Flag

    You may be more accurate. The "Net income (loss) attributable to common stockholder (Note 11)" as shown on p.18 of the "Fourth Quarter and Full Year 2012 Results" is: 1.397B (after minus 11.603B of "Preferred stock dividends"). So the "Earnings (loss) per share" listed there is: 0.24 (1.397B divided by 5.762B shares). If we time $0.24 by a moderate p/e of 6, the share value would be $1.44. By this calculation, the Commons are undervalued. I have no idea, however, what that "Note 11" is about. It's not in the document. Anyone knows what that Note is about?

  • wynkwyn wynkwyn Apr 5, 2013 3:00 PM Flag

    If this 3.02/per share is timed by a P/E, say 6, the value of each share should be $18.12. In this sense, both preferred and common are underpriced. But all this calculation won't make real sense until the GSEs are allowed to redeem the debt and the C-ship be terminated.

  • wynkwyn wynkwyn Apr 5, 2013 9:56 AM Flag

    Yes. Redemption of debt and hence the end of C- ship is the core beneath the current debate on the GSE future.

  • The March 15 FNMA announcement kicked up a wild drive that led to a 4-day rally of the two GSE stocks soaring from $0.29 to $1.08 (FNMA). In addition to confirming its profitability, the FNMA announcement zeroed in on one point, namely, its need of more time on the accounting of the defered tax assets (DTA) made it necessary to postpone its 4th quarter earning report. As the DTA ran over 60B, the company stated the "accounting change would result 'in a significant dividend payment' to the U.S. Treasury." (WSJ article, March 18).

    The April 2 4th quarter and full year report, however, indicated a change in tone on the DTA benefit. Instead of reclaiming its tax benefit for the 4th quarter, it decided not Why such an abrupt turn within just two weeks? A MarketWatch article on March 20 by Sital S. Patel may give us a clue. It writes: "The Federal Housing Finance Agency said the two mortgage lenders will be able to return money to the U.S Treasury after new terms were negotiated." The report did not give its source, but apparently "new terms" to "return" money were being or will be "negotiated".

    The gap between the March 15 announcemnt and the April 2 report on DTA treatment is, therefore, not a simple accounting consideration. The change was very likely occasioned by the uncertainty on the prospect of debt redemption. The "negotiation" of "new terms" discussed by MarketWatch has not started or progressed as FNMA leaders had expected when they decided to postpone the 4th quarter report on March 15; the company may have found within the 2-week interval that more time is needed for that prospect of debt redemption to mature. Hence, a new postponement. The company does not say how long to wait for the DTA reclaiming, but it gives the impression that once the signal comes that the GSEs are allowed to redeem their debt, they, as hinted in the April 2 earnings report, can reclaim the tax benefit in the very next quarterly report.

    Sentiment: Buy

  • wynkwyn wynkwyn Apr 4, 2013 10:09 PM Flag

    The FNMA fourth quarter earnings report is a bit mind-boggling. It's all because the Fed bail-out funds are not a pure and simple financial loan like the 10-B loan from Warren Buffett to Golden Sach a couple years ago, and are further complicated by the August 2012 changed terms. Some of our fellow investers have made admirable efforts and done fairly thorough study of the existing documents to an extent of almost exceeding the depth of what some journalists have gone. The current Fed terms on FnF ARE rigid and formidable, but the very existence of the "profitability" of the two GSEs has created a new atmosphere, which may gradually induce our leaders and law- makers to have a second thought. Nobody would say the change is certain and it's just this little lingering element of uncertainty that has kept the shares of the two GSEs from soaring to the range of 5 to 10 dollars at least.

    Sentiment: Buy

  • Is this formula correct? The number 7.224B is "Balance as of Dec.31, 2012" as shown at the end of page 18 of the "Fourth Quarter and Full Year 2012 Results" report. This 7.224B is, in turn, from the formula of 18.839B ("Total comprehensive income") - 11.608B ("Senior preferred stock dividends".[the same page]. Since 4.2B is the money paid to Treasury March 31, 2013, I guess, the 7.224B of the "Balance as of Dec.31, 2012" should be the same as the so-called net worth of the immediately preceding quarter.

    Sentiment: Buy

  • Reply to

    Paulson coments are nothing...

    by goodoldtruth Apr 4, 2013 8:51 AM
    wynkwyn wynkwyn Apr 4, 2013 9:00 AM Flag

    Paulson's remarks are actually good for the two GSEs. Why? Because, with remarks of the former Treasury secretary who helped place the GSEs under "Conservatorship", the issue is now more exposed to the public for an open debate. Nobody denies the share of responsibility of the GSEs in the housing bubble that caused the recent recession and nobody denies the GSEs need "overhaul", reforming, etc. But, what about the banks? Did they behave any better in the whole financial crisis? If they had been clean and had not passed on bad mortgage loans to GSEs, they would not have needed to pay huge amounts of settlement money or buy back bad loans from GSEs. Then, take Goldman Sachs for example. Paulson was its CEO before coming to head the Treasury. That bank was near bankruptcy in 2008 and survived only through a multiple billion bail-out from Warren Buffet. And only yesterday a former Goldman Sachs trader was reported to admit guilty to a fraud concerning a 83 billion affair. Banks or GSEs, each has its own problem and they all need reform and "overhaul", but such reforms or re-organization should be done in a way that is best for the recovery of US economy and hence best for the nation as a whole.

    Sentiment: Buy

  • Paulson's remarks are good for the two GSEs. Why? Because, with remarks of the former Treasury secretary who helped place the GSEs under "Conservatorship", the issue is now more exposed to the public for an open debate. Nobody denies the share of responsibility of the GSEs in the housing bubble that caused the recent recession and nobody denies the GSEs need "overhaul", reforming, etc. But, what about the banks? Did they behave any better in the whole financial crisis? If they had been clean and had not passed on bad mortgage loans to GSEs, they would not have needed to pay huge amounts of settlement money or buy back bad loans from GSEs. Then, take Goldman Sachs for example. Paulson was its CEO before coming to head the Treasury. That bank was near bankruptcy in 2008 and survived only through a multiple billion bail-out from Warren Buffet. And only yesterday a former Goldman Sachs trader was reported to admit guilty to a fraud concerning a 83 billion affair. Banks or GSEs, each has its own problem and they all need reform and "overhaul", but such reforms or re-organization should be done in a way that is best for the recovery of US economy and hence best for the nation as a whole.

  • "Numerous voices will be asking why the Treasury doesn't want its preferred investment -- the taxpayer bailout -- to be repaid. Fannie is now a profitable company with $3.2 trillion in total assets as of Dec. 31. It's not simply going to disappear, despite what we hear from various politicians.
    There is also a possibility of the junior preferred shareholders filing a lawsuit against the government.
    Australian hedge fund manager John Hempton, said in an interview with TheStreet on March 21 that the government's windfall on Fannie and Freddie could cause an "enterprising lawyer [to] take the case all the way to the Supreme Court and win."
    Hampton said the August deal for Fannie Mae and Freddie Mac to effectively pay unlimited dividends to the government violated the Fifth Amendment of the U.S. Constitution, which requires "just compensation" to be given if the government seizes private property for public use."

  • Click this link to read the CNBA analysis from the political point of view.
    http://www.cnbc.com/id/100610000

    Sentiment: Buy

FNMA
1.70-0.01(-0.58%)Apr 29 3:59 PMEDT