FNM, FRE a buy now?

Quote from Subdude:

Yes - go short above $1.3
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Go short above $1.3 because you see a favorable chart pattern or because you've got some other reason?
 
Quote from blnbr:

Go short above $1.3 because you see a favorable chart pattern or because you've got some other reason?
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If you knew a little bit about GSEs as well as what happened last year and the total amount they owe to the taxpayer and government, you'd have no need to ask that question.
 
Quote from Subdude:

If you knew a little bit about GSEs as well as what happened last year and the total amount they owe to the taxpayer and government, you'd have no need to ask that question.
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But the 'Government' owns most of the shares now, isn't it?

If that's the case, then, the 'Government' would want the share price to go up sooner or later (even though the exact timing is hard to say). But that's my imagination, correct me if I'm wrong.
 
The Treasury cannot lose money on FRE stock - you can, though. Read this to understand why: http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac

The bottom line is this: "Also each GSE contracted to issue common stock warrants representing an ownership stake of 79.9%, at an exercise price of one-thousandth of a U.S. cent ($ 0.00001) per share, and with a warrant duration of twenty years."

What this means is that at any moment the Treasury can dilute you and other bagholders, without regard or prior notice. So far they have bought $14B worth of common stock in both FNM & FRE combined, out of the total possible $200B. Any other questions?
 
Quote from Subdude:

The Treasury cannot lose money on FRE stock - you can, though. Read this to understand why: http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac

The bottom line is this: "Also each GSE contracted to issue common stock warrants representing an ownership stake of 79.9%, at an exercise price of one-thousandth of a U.S. cent ($ 0.00001) per share, and with a warrant duration of twenty years."

What this means is that at any moment the Treasury can dilute you and other bagholders, without regard or prior notice. So far they have bought $14B worth of common stock in both FNM & FRE combined, out of the total possible $200B. Any other questions?
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Thank you!

The two stock prices have been within 5% difference in the last 10 months. Do you or anybody know why FRE is currently trading over 50% higher than FNM in price?
 
Quote from blnbr:

Thank you!

The two stock prices have been within 5% difference in the last 10 months. Do you or anybody know why FRE is currently trading over 50% higher than FNM in price?
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Last week FRE reported a (dubious) profit, while FNM posted a huge loss. Other than that, I don't see why the feds haven't yet merged the two together.
 
Yeah, in times of widespread euphoria, this is known as "dash to trash". It will be a lot fun watching this run unravel in the coming weeks.
 
The Fannie and Freddy will be a good run to 5 as the rest of the market comes back. They have been loading up with alot of assets and I point to the rates climbing up. I see fre and FNM at 60% in the next 12 months. Long term they both hit above 3 dollars. fre- 1.69 fnm-1

BTW I called these back in February at much less.
 
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