If you have common shares in this company you are doomed but if you have bonds their yield is about 25%. So thats 25,000 per year on 100,000.The way I see it is that they have to pay these high yiels rates to keep tens of billions being pulled out of the bonds side. A guy might take a risk and pull his 100 grand and then buy common shares at these almost bankrupt levels around.80 cents per share. They were at $ 68 at one time. So with 100,000 I can buy 128,000 shares . Assuming these went back up to a 25% increase at .80 thats only a $ 1.00 per share which ='s the 25% yrly yield .But if the shares ever climbed back to $ 8.00 / share in the future then you would stand to make 10 x your money or a million dollars on your $100,000 which would take 20 years at 25% yeilds which will rop in the future as the company becomes solvent again. Even if the Moslem idiot gets in and he does get the long term capital gains increased, the sorry jerk , then you would still clear making half a million. But ,now you risk the chance of losing your 100 grand if the stocks go to zero.I don't think they will do that. People like me will probably buy and that will help bring the common shares back up. Personally I'm going to risk it.And if Fannie goes under then the whole world economy is going to probably collapse so whats the difference.
William Mc Farland
of OK
@
Sep 12, 2008 04:06:16 AM
FNMA
This is my daughter's tuition money. She is an out of stste student so tuition is high. She lost 10 % yesterday. Do I sell or wait for the federal government to come to the rescue ?
HELP !
KW
KW
of FL
@
Jul 16, 2008 18:49:17 PM
i
f
they have 5 trillion out @ 5%=$250 billion in revenue..
of
@
Jul 16, 2008 14:01:36 PM
Freddi and Fannie
It is reported that they currently buy 80 per cent of current new mortgages. It seems to me that the common perception is a lack of liquidity. They seem to lack moneys to buy yet they buy.
How much of their assets have fixed, adjustable etc. interest rates and what is the percentage they do not hold in their coffers ( off the book obligations) ?
Are all mortgages re-insured ?
Are Paulson, Bernanke and Lockhart telling the truth and which of the truth is exempted for publication ?
Wolfgang Moller
of CA
@
Jul 14, 2008 09:09:52 AM
fannie and freddie
I know one thing - those that know are getting out while the getting out is good, those that stay behind will be left holding the bag - remember the ones that said bear sterns was alright while they were getting out of the mess? then the bottom fell out...
of NY
@
Jul 13, 2008 23:55:11 PM
Capital to Debt Ratio
The problems at Fannie and Freddie is not the level of capital but the ratio of debt to capital that has become unreasonable. Any high school accounting student would give negative marks to a company such as these that have negative equity and growing liabilities. We have yet to see numbers on non-performing assets and the level of write downs expected or in current positions. It is the silence in these issues that have spooked investors. No ship is too big to sink. All it took is a single iceberg for the Titanic. Where are we steering these ships today?
Timothy G. Bean, M.Ed.
of WA
@
Jul 13, 2008 17:14:32 PM
Author's last paragraph - Concentrate on that
Do you really want a "private-equity" firm (maybe even a sovereign-wealth fund from another country) to buy Fannie and Freddie WITH GOVERNMENT SUPPORT, meaning your tax dollars going to protect the downside for yet another corporation (maybe a foreign one) with the upside going to the corporation?
Nationalization may not be as bad as "conservatives" would have you believe. Bear in mind that the regulatory malfeasance of "conservatives" these past few decades---as they howled to "get the government off our backs" is WHY we have one mess after another. Interest rates ARE too low, they have been for a long time. Don't just buy the minimal government intervention argument again without THINKING.
Daniel David
of NM
@
Jul 12, 2008 12:10:37 PM
Government Bailouts
The Savings and Loan crisis of the late 1980's was caused by mis-management of interest rate regulations by the US government. Charles Keeting did not cause the mess. Once again, the government sponsored concept of securitizing loan packages has proven to be an opportunity for loan originators to neglect "attention to detail" and make enormous fees, while setting up the taxpayer to have to bear the cost of another bailout. We can't afford much more help of this kind, from our government "leaders".
Unfortunately, we are fast approaching the next Great Depression. Entitlement program give-aways and the bailout of increasing numbers of financial institutions, pension plans, (fill in the next shoe to drop) etc., there isn't enough money in the world to cover all the government commitments. In the near future, the debt service on the US National Debt will become unsustainable.
Government "Leaders" could have used the $160 billion they just threw away out of airplanes to subsidize clean energy and rebuilding of our country's infrastructure. These moves could have created good paying jobs at home and been a start toward solving the global warming problem. That would not have been rocket science. Unfortunately, the politicians were too busy trying to look like heros to the voting public as we approach the next election.
Will our leaders wake up and abandon their personal agendas in favor of the national interest before it is too late?
William Mc Farland of OK @ Sep 12, 2008 04:06:16 AM
KW of FL @ Jul 16, 2008 18:49:17 PM
of @ Jul 16, 2008 14:01:36 PM
Wolfgang Moller of CA @ Jul 14, 2008 09:09:52 AM
of NY @ Jul 13, 2008 23:55:11 PM
Timothy G. Bean, M.Ed. of WA @ Jul 13, 2008 17:14:32 PM
Daniel David of NM @ Jul 12, 2008 12:10:37 PM
Jim Barko of TX @ Jul 11, 2008 20:46:27 PM
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