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   Strategies & Market TrendsFreddie Mac (FRE) pops the housing bubble

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From: mlkr11/26/2008 12:59:10 PM
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Moving up with recent demand side asset purchase directional change in policy.. Break tru $1.00 level? may be..

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From: mlkr2/5/2009 11:58:40 AM
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FRE and FNM had to add today should i say?

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From: mlkr9/8/2009 10:54:20 PM
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INTERESTING AHs trades: FNM and FRE 1.68 and 1.96 last trades..
FNM had over 2.5 millon shares traded AHs.. closed @1.68...FRE had close to 800 shares traded during AHs..Last trade was 1.95 according to Nazdog and 1.96 according to yahoo. May be short pricks had to pay higher prices AHs to close their positions expecting a reversal in share prices in better days of the week.....

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From: mlkr9/16/2009 10:09:48 PM
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By Lynn Adler

NEW YORK, Sept 10 (Reuters) - The government's seizure and support of home funding companies Fannie Mae (FNM.N) and Freddie Mac (FRE.N) a year ago will likely muddy efforts to restructure the companies, according to a Government Accountability Office study.

Tasking Fannie Mae and Freddie Mac with limiting the scope of the housing crisis "may be necessary," the GAO said, but it may also "significantly affect the costs of the conservatorship and transition to a new structure."

Since the takeover, which the Congressional Budget Office estimated will cost taxpayers nearly $400 billion, the government has relied heavily on both companies to revive U.S. housing, the bane of the economy during a deep real estate slumpthat began more than three years ago.

As part of the conservatorship, the companies can increase their mortgage investment portfolios to help restore housing market stability before having to start cutting the holdings in 2010.

But the government had to come to the rescue of the two finance companies who had more than $5 trillion in outstanding obligations by pumping tens of billions of dollars in capital into Fannie and Freddie through stock purchases among other financial supports. As of June 30, the Treasury had provided about $85 billion to the GSEs.

"Investors might be unwilling to invest capital in reconstituted enterprises unless Treasury assumed responsibility for losses incurred during their conservatorship," the report said.

The GAO said the two companies have a mixed record in meeting their housing mission objections and both capital and risk management problems compromised their safety and soundness.

The GAO said its study, released on Thursday, was prepared with broad input from regulators and the entities, to guide Congress in its debate about the fate of Fannie and Freddie.


The two companies are structured as government agencies owned by shareholders, but investors grew to rely on expectations that the government would bail out Fannie Mae and Freddie Mac debt in a crisis.

Although the debt did not carry an "explicit guarantee", the U.S. a year ago did intervene and commit to backing the finance companies via company stock and debt purchases. This only reinforced the market's perception of a government guarantee that may be hard to sever.

The debt of both companies has rallied through the last year, pushing risk premiums down from record highs versus Treasuries during the worst of the markets meltdown in the past year to record lows.

"While the enterprises are now a critical component of the federal government's response to the housing crisis, such support would not be possible without Treasury's financial support and the Federal Reserve's plans to purchase almost $1.45 trillion of their MBS and debt obligations as well as those of other entities," GAO said in the study.

The U.S. Federal Reserve has set a goal to buy up to $1.25 trillion of agency MBS and $200 billion of agency debt before the end of this year to help lower home loan borrowing costs.

The Fed purchases of agency MBS total $836.5 billion so far in 2009 while the Fed's purchases of agency debt totals $122.366 billion.

Fannie Mae, through spokesman Brian Faith, declined to comment on the GAO report.

Sharon McHale, Freddie Mac spokeswoman, was not immediately available to comment.


The main options Congress will consider, with some overlap, are as follows:

-- Reconstitute the GSEs as for-profit corporations with government sponsorship but add restrictions to control risks. This could eliminate or reduce portfolios, establish executive compensation limits, or convert GSEs from shareholder-owned corporations to associations owned by lenders.

-- Create government corporations or agencies. The entities would focus on buying qualifying mortgages and issuing mortgage-backed securities but eliminate portfolios. The Federal Housing Administration, which insures mortgages for low-income and first-time borrowers, could assume more responsibility for promoting homeownership for targeted groups.

-- Privatize or terminate Fannie Mae and Freddie Mac. This would disperse mortgage lending and risk management through the private sector. Some proposals involve establishing a federal mortgage insurer to help protect lenders against catastrophic mortgage losses.

Each option has its trade-offs. All would need probably need a transition period to mitigate market disruption and ease the development of a new mortgage finance system, GAO said.

See the report here

See also a scenarios factbox on likely options for Fannie and Freddie in the future [ID:nN10402864]

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From: mlkr12/28/2009 2:50:44 PM
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Last update: 12/28/2009 2:16:15 PM
U.S. stocks rose slightly Monday, as the Dow Jones Industrial Average gained 7.3 points to 10527, the Standard & Poor's 500 rose a fraction to 1127 and the Nasdaq Composite climbed 3.2 points to 2289. Among the companies whose shares are actively trading in the session are Fannie Mae (FNM), Freddie Mac (FRE) and 3PAR Inc. (PAR).
Shares of mortgage-finance companies Fannie Mae ($1.26, +$0.21, +20.00%) and Freddie Mac ($1.58, +$0.32, +25.55%) gained Monday. Late last week reports surfaced that the U.S. Treasury Department has agreed to provide Fannie Mae and Freddie Mac with as much capital as they need over the next three years. The companies were placed in government conservatorship in 2008. American International Group Inc. (AIG, $32.08, +$1.96, +6.51%), which also received a bailout from the government, also gained.

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From: mlkr12/29/2009 10:26:39 AM
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FRE 1.71 vs FNM 1.38.. Active extended hrs and regular hrs trading..

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From: mlkr3/4/2010 1:11:00 PM
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FRE 1.22 vs FNM 1.01 ; looks new wave of upward move underway! Way too oversold by shorties despite good reporting and new capital raisings tru their own means!

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From: mlkr3/10/2010 3:33:53 PM
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FRE 1.36 FNM 1.17 NEW WAVE of increases: GSE have more to offer with wounded financial giants' positive news today

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From: mlkr6/21/2010 10:55:00 AM
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FRE 050 vs FNM 040 after delisting decision by FHA.

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From: mlkr7/8/2010 10:14:29 AM
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Fannie, Freddie find new home over the counter
Published: Wednesday, 7 Jul 2010 | 6:04 PM ET

McLEAN, Va. - Shares of Fannie Mae and Freddie Mac will begin trading over-the-counter Thursday, nearly a month after the government-sponsored mortgage buyers said they could no longer meet the requirements of companies listed on the New York Stock Exchange.

Freddie Mac's common stock, now unlisted, will trade under the symbol "FMCC." Investors will be able to trade Freddie Mac's 20 classes of preferred stock.

Fannie Mae's common stock will trade under the symbol "FNMA." Its preferred shares also will be listed.

Last month, the companies' regulator, the Federal Housing Finance Agency, said that Fannie's shares have been below the $1 average price level for 30 trading days. NYSE rules require a company to take action to boost its shares or delist. Freddie's shares have hovered close to the $1 mark.

Fannie and Freddie were created by Congress to buy mortgages from lenders and package them into bonds that are resold to investors. Together they own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.

During the housing boom, the two loosened lending standards for borrowers and were broadsided when the housing market crumbled.

The government took over the two companies in September 2008 after they suffered huge loan losses.

In 2007, shares of both companies traded above $60. As the housing crisis deepened the stocks lost almost all of their value, plummeting below $1 by September 2008.

During the last day on the NYSE Wednesday, shares in Freddie Mac closed down 5 percent at 34 cents, then tumbled another 5 percent in after-hours trading.

Shares in Fannie Mae slid 17 percent to close below a quarter each.

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