This really should be considered a joke.

"The planned legislation, drafted with input from President Barack Obama’s administration, would replace Fannie Mae and Freddie Mac with a U.S.-backed mortgage-bond insurer that would cover losses only after private capital bears the first 10 percent, Senate Banking Committee Chairman Tim Johnson and Senator Mike Crapo said in a March 12 statement."

What is the default rate already on a 30-year mortgage bond? 3%?

So what if interest rates rise from 4% to 5%. That is a 20% loss. So the government is going to be responsible for 10% of these losses on top of the normal 3% default rate? What if rates go from 5% to 6%? Then the government (the saver) is going to be responsible for 30% losses on the homes? Furthermore all this money is based on the U.s. dollar which is losing about 5% a year.

Furthermore you got that debt leveraged 6:1 in a mortgage reit. Low interest to allow money managers to speculate with it with massive fees, then when the thing goes belly up the stockholder gets wiped out and the government pays the insurance to help the banks and mortgage etfs.

In 20 years, the average mortgage interest rate will be 15%, the people will either lose their life savings or they will eventually catch on to the fraud by government.

That isn't the type of loss they are guaranteeing against. There is no guaranty against paper losses. It is a guaranty that if you loan someone $100,000, that if they don't pay, you only lose $10,000. Nothing more than that. That means that if the house is foreclosed on and the proceeds are greater than $90,000, there is nothing paid by the government.*

I deleted the rest of your analysis that requires that the guaranty be what you incorrectly think it is. You are entirely wrong (due to your misunderstanding of the guaranty). I will admit that I am giving an opinion, but only to the extent that my saying 1+1=3 in base 10 is wrong is an opinion.

*It is slightly more complicated than that, but not much more.

Senate Committee Delays Vote on Fannie, Freddie Bill
2:33p ET April 29, 2014 (Dow Jones) Print
Senate Committee Delays Vote on Fannie, Freddie Bill
By Nick Timiraos

Lawmakers delayed Tuesday a committee vote on legislation to overhaul Fannie Mae and Freddie Mac in a bid to widen support for the measure, the latest sign of the uphill battle confronting a bipartisan bid to settle the firms' fate 5 1/2 years after the government rescued them.

Sens. Tim Johnson (D., S.D.) and Mike Crapo (R., Idaho), the heads of the Senate Banking Committee, said at a hearing Tuesday they had enough support from the 22-member panel to pass the bill. But they said they believed waiting a few days could allow them to pick up a handful of uncommitted lawmakers.

Negotiations over technical changes to the bill have accelerated in recent days as supporters seek to gain a larger majority, which analysts say is a prerequisite for the Senate to bring the measure to a floor vote before attention shifts to the fall's midterm elections later this year.

"We're going to have a little more conversation," Sen. Bob Corker (R., Tenn.) told reporters after Tuesday's hearing. "We've narrowed it down to a very small group of points that potentially could bring a lot more members on."

Sens. Johnson and Crapo agreed last month on a bill that would replace Fannie and Freddie with a new system in which private entities would package mortgages into securities sold to investors. Those bonds would carry federal insurance that would kick in if private-sector guarantors took initial losses.
The setup aims to keep the 30-year, fixed-rate mortgage widely available while minimizing the prospect that taxpayers would need to bail out companies like Fannie and Freddie. The White House has expressed support for the bill.

The bill has faced particular scrutiny from the left. Obama administration officials have in recent days tried to quell unease from liberal consumer and civil-rights groups that say the bill doesn't do enough to force lenders to serve low- and moderate-income borrowers.

The opposition has made it harder for centrist supporters of the bill to attract backing from any of six uncommitted Democrats, including Sens. Charles Schumer of New York and Robert Menendez of New Jersey, who have raised similar concerns. But backers must walk a fine line to ensure any concessions don't alienate Republicans that are wary the government will put taxpayers at risk of future losses.

Fannie and Freddie required $188 billion in taxpayer support between 2008 and 2011, but buoyed by extensive government support and a recovering housing sector, the firms have returned $203 billion to the Treasury in dividend payments.
The firms remain in a government-managed conservatorship, and they can't escape federal control without an act of Congress or the Treasury Department. If the bill falters, U.S. control would continue, though lawmakers might eventually look to restructure rather than replace the firms. The Obama administration has said it flatly opposes that option because it wouldn't address the firms' duopoly status.
Even if the bill clears the Senate, it appears unlikely to move through the House, where Republicans have sought to pass a different measure without any Democratic votes.
"Inertia is a powerful ally of Fannie Mae and Freddie Mac," said analysts at Keefe, Bruyette & Woods Inc. in a note to clients on Tuesday. "The longer Congress avoids acting on mortgage-finance legislation, the greater the chances the two companies survive."

In the meantime, courts are set to hear cases brought by private shareholders in the companies later this year that could determine whether the Treasury Department fairly interpreted federal statutes in 2012 when it began requiring Fannie and Freddie to send all of their profits to the U.S. as dividend payments.

On Tuesday, an advocacy group called United for American Homeownership ran full-page ads in The Wall Street Journal and The New York Times touting the profitability of Fannie and Freddie. It has also purchased television advertising arguing the companies should be preserved.

The group's funding came from Fairholme Capital Management LLC, the Miami-based mutual fund that has invested heavily in the shares of both companies and could see a big payout if the companies are returned to private ownership. Fairholme is among shareholders that have sued the Treasury.

Fannie Mae Soft Pedals $4 Billion Mistakes

http://www.thestreet.com/story/12700...-mistakes.html

nice timing with ackman's sohn speech

or did he acknowledge that and i missed it

Curious if anyone has current thoughts on FMCC. Thanks!

As Jim Cramer would say, BUY! BUY! BUY! This thing is nowhere near over. We've lost a round on points but the final scorecard will determine if we win the fight.

Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that "The time to buy is when there's blood in the streets."

He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that's not the whole story. The original quote is believed to be "Buy when there's blood in the streets, even if the blood is your own."

source: http://www.investopedia.com/articles...-investing.asp

lol this thing is so swongy

Keep buying things that you don't have an edge in and cannot possibly understand, and you will go down in flames like Bill Miller did. Where were the Fannie and Freddie threads when the stock was at 25-30 cents, which is where it was for years. You gotta dig these up before the masses develop their idiot theories. Most of you bought Fannie at 10 times the price you could have bought the years before...lol, because a few hedge fund guru idiots came on the scene and starting pumping their idiot thesis.

http://online.wsj.com/articles/SB122886123425292617

What's up? Did you send Buffett a letter with your thesis? Lots of financial geniuses on the scam that is Fannie Mae. The thing should have gone to zero years ago, and in a fair world it would have. Nice call on a zombie company. Do you have your silver stacked and bitcoin hoarded away? Fuggin Goofs.

You're right I did not predict the bottom for the stock correctly.

No person on earth can tell you what Fannie or Freddie is worth. That is why there is no bottom. It could go to 50 cents, or up to $5 or more. Most of the pumpers of these paid outrageous prices. The price was 25 cents for years and years. People could have taken a flier there, with the idea that at some point there would be some rumbling if/when housing rebounded and they started to show profits again.

I can't claim to have made the right move. I bought it three times near the lows, but only held a few months each time. I also bought AAMRQ two or three times, the last time at 48 cents in late 2012. Of course it went up over 50 times within a year after I sold. They pulled that one off without the media figuring it out. There are some crazy opportunities out there, but you gotta get in when only an idiot would buy (usually).

Speculation most always leads to loss. The types of people pumping Fannie Mae with their numbers and earnings analysis have always missed the whole point. At the end of the day this was basically a criminal company that should have gone to zero, and all bondholders should have gone with them, with 100 percent losses, but the government didn't want to stick it to the foreign entities that held the bonds, and they also didn't want to make the financial crisis worse by having people actually have to qualify for a mortgage in the private market.

Who knows where it goes, but anybody who spends time on serious analysis is wasting their time. You cannot expect the taxpayer to bail everyone out all of the time. People say that the government got paid back, or is getting paid back in full. Well, maybe, but there was risk of a complete loss, and it would be one of the most unethical things ever in finance if a few criminal hedge funds were allowed to profit on this. Those same hedge funds paid a high price as well. None of them bought at 25 cents. They are just looking for something that can move fast. They aren't true investors like they say they are. You never hear about them buying Exxon, which is something that nobody could possibly lose money on in 80 years, even if that was their goal.

A motion to dismiss by the government in Iowa has been denied. First definite trial of the 30 lawsuits filed so far.

It isn't a "definite trial." The judge ruled that their motion was moot.

http://www.housingwire.com/articles/...e-freddie-fate

Appeals court transcript: http://www.valueplays.net/wp-content...Transcript.pdf

Ruling within the next 6 weeks most likely.

New Reddit post that is pretty good and has a lot of upvotes in the r/stocks area of Reddit:

https://www.reddit.com/r/stocks/comm..._are_the_most/