Fannie Mae (QB) (FNMAG) News

I don't care if we NEVER GET RELEASED
as long as we get RE-LISTED on the Big Board

Shit the bed tomorrow with all this $8,$10, all in, we all know what happens now!

Just the same scenario as last time he became president, up and away we go then blaaahhhhh, big nothing burger!
Until he says release it’s a trickle down maybe be a fast trickle tomorrow.
We shall see.

Trumps not doing an executive order to release fannie or Freddie , wish he was!

Trump’s executive orders and the policies that could affect housing

It's all underway - here's a summary:
https://www.housingwire.com/articles/trumps-executive-orders-and-the-policies-that-could-affect-housing/

I'm All in tomorrow in the morning. He better release Fannie. All my chips are going in.

$10 Tomorrow If trump signs to release Fannie tonight.

Definitely up tomorrow! Bessent’’s confirmation probably end of the week and then they need the FHFA director and Treasury to sign off. I doubt we’ll see an executive order this week if there is one. Bessent has to be confirmed first to get the wheels moving.Tomorrow we fly on Trump being the new President 🚀🚀 GLTA!

Definitely up tomorrow! Bessent’’s confirmation probate end of the week and then they need the FHFA director and Treasury to sign off. I doubt we’ll see an executive order this week if there is one. Bessent has to be confirmed first to get the wills moving. Tomorrow we fly on Trump being the new President 🚀🚀 GLTA!

I hope he signs. He signed to get us out of the Parris climate deal so Fock he should sign to release Fannie.

Probably 2Fiddy tomorrow!!

Do I here $10.50 anyone😂

I say $10.20

I swear on me nan FnF better be on day 2 agenda.

You seem to be related to alongz with his made up couzin, care to share your alter ego- rusty bed springs? Fnma

$10 would be awesome 

I can wait few days, Friday $10+ GLTA !!

When you talk about ending % you have to take into consideration the JPS. Everyone understands they will get par one way or another, that’s $33 billion, if the boys together are worth $300 billion the JPS has to end up with 12% minimum.

When you talk about ending % you have to take into consideration the JPS. Everyone understands they will get par one way or another, that’s $33 billion, if the boys together are worth $300 billion the JPS has to end up with 12% minimum.

I like $8 as well but I would be happy with $7.50

No, and it's skeerin' me big time

8$ tomorrow 

Up up and away🚀🚀🚀🚀

Tomorrow we go up 35 cents to close at $7.25.

If you’d managed to slip your eo among the pardons, FnF would be free today

Yeah I should have done that. I just read that he pardoned 1500 people involved in Jan 6 so he would not have noticed among so many. A golden opportunity.

Seriously, I am sweating that Trump may have revoked an EO that I was asked to comment on that Biden signed in Dec 2023. It had to do with security of Federal buildings and it was important that they implement it. That's the last one I was ever involved in.

His back to the office order reminded me of what I told an old boss when the Government first implemented telework. I wasn't sure what telework meant. He explained to me that I had the option to work at home if I wanted. "Work at home?" I asked him. "I don't work here - why the hell would I want to work at home?"

Not a career enhancing thing to say.

Nats

Are we up or down tomorrow Morning? Any thoughts?

Repost Ano's X post and tag everyone you can on X and Reddit ... cannot say this enough ... this needs to be front of everyone's mind dealing with and understanding the warrants, the value of our investment, regulators, those dealing with the treasury, and EVERY potential investor

Any Executive Orders about F&F

If you’d managed to slip your eo among the pardons, FnF would be free today 🤣.

Watching President Trump on CNN sign Exec orders listening for FnF release order, it could happen

Calling his price "conservative" means that you think somehow things are likely going to be better for legacy common holders than this. Do you really expect Treasury to have less than 71% of the common in the end, or for the P/E multiple to be greater than 15?

Yeah - I hear you. All these price predictions are just fun speculation. Any of them are possible. And its good to hear other people's theory of the possible. I still contend that $40 or so would not be unreasonable as I have explained in several posts. But a lot of assumptions on my part (also I would like to mention that I believe the utility Duke Energy had a P/E of 19 last I checked).

That being said, I do want to note that Paulson was among the rich folks at the Inauguration and was sitting with folks like Musk and Bezos. He was in the box seats and House members had to sit in the bleachers. So that bodes well for preferred. However, Trump did not sign the EO I submitted freeing the GSEs - at least at the rally. Maybe he is doing this as we speak (or as I type). I am going to bed early tonight as we are still trying to catch up on our sleep because of the fireworks the other night at Trump National and our dog (named "Freddie" of course, as he is a boy - otherwise it would have been "Fannie" as he was, as were the GSEs, supposedly, "rescued") still won't come out from under the bed. So maybe I will see where he signed our EO in the Post tomorrow.

Nats

Very weak and incompetent judge who was forced by Brandon to not certify the verdict. It gives Trump more power to go to congress and point finger to puppet of Obama and Obama and release the twins just like Jan 6th Protestors.

They are very scared tonight, GSE doing very well. almost never do they post in the evening, almost exclusively after a run up intraday, and it started to top, they pounce as if it has anything to do with their remarks, remarkable anyone thinks that highly of herself, what a lardo.

excellent points and acute observations

IT is worth a BOOM, only a fool, con man, or liar, would argue otherwise. thanks for info.

Ackerman. He and you are the only ones skeered the prices are going down. Ackman and the rest of us believe they going to the moon.

Ackerman or Ackman?

Which one helped you

Ask Ackerman to hold your hand. You’ll feel a lot better.

Understanding the Relationship Between FNMA and FNM

To analyze whether FNM (the stock traded on the Berlin Stock Exchange) follows the volatility of FNMA (the stock traded on the OTC market), we need to consider several factors, including market dynamics, trading environments, and the nature of both exchanges.

1. Overview of FNMA and FNM

FNMA, or the Federal National Mortgage Association, is a government-sponsored enterprise (GSE) in the United States that provides liquidity to the mortgage market. It trades primarily on over-the-counter (OTC) markets, which are less regulated than traditional exchanges. This can lead to higher volatility due to lower trading volumes and less stringent reporting requirements.

FNM represents FNMA’s shares traded on the Berlin Stock Exchange. The Berlin Stock Exchange is part of a larger network of European exchanges and operates under different regulations compared to U.S. markets. Generally, European exchanges may have more stringent listing requirements and regulatory oversight than OTC markets.

2. Volatility Factors

Volatility in stock prices can be influenced by various factors:

Market Sentiment: Both FNMA and FNM are subject to investor sentiment regarding U.S. housing markets, interest rates, and economic conditions.
Liquidity: OTC stocks like FNMA may experience greater price swings due to lower liquidity compared to stocks listed on major exchanges like the Berlin Stock Exchange.
Regulatory Environment: The regulatory framework governing trading practices can impact volatility. The Berlin Stock Exchange has stricter regulations that may contribute to more stable trading conditions for FNM.
3. Correlation Between FNMA and FNM

While both stocks represent ownership in the same underlying entity (FNMA), their price movements may not always align perfectly due to:

Currency Fluctuations: FNM is priced in euros while FNMA is priced in U.S. dollars. Changes in exchange rates can affect how investors perceive value between these two listings.
Market Conditions: Different market conditions in Europe versus the U.S. can lead to divergent price movements even if they are fundamentally linked.
Trading Hours: The trading hours for each exchange differ, which means that news affecting FNMA could impact its price before it affects FNM.
4. Conclusion: Volatility Comparison

In conclusion, while there is likely some correlation between FNMA’s volatility on the OTC market and FNM’s performance on the Berlin Stock Exchange due to their connection as representations of the same company, several factors suggest that FNM may exhibit more stability compared to FNMA. This stability arises from stricter regulations and potentially higher liquidity associated with European exchanges.

Thus, it can be said that FNM does not strictly follow the volatility of FNMA; rather, it tends to exhibit more stability due to its trading environment on a regulated exchange.

That's not at all what my sarcastic list of reasons means.

Step back through the thread here.

You: "And a lack of lawsuits can be for many reasons, not just a lack of confidence in the argument. Again, your opinions are not facts! Maybe I'm out of the country, maybe I'm agoraphobic and can't leave my house, maybe I have no money, maybe I'm wanted for multiple felonies and need to stay incognito... Or maybe, just maybe... I just don't feel like it because it's a waste of time and has no bearing on the money I'll make on this stock?"
Me: "All I see is a list of weak excuses."
You: "Of course that's what you see!! LOL! 🤣 The sarcasm is completely wasted on you!"
Me: "If what you had said was sarcastic, that implies that you agree with my assertion that you not having filed a lawsuit yet means you aren't all that confident in your legal theory."

My last comment stands. Keep backpedaling if you like, but it won't do you any good.

Just because someone hypothesizes that something is illegal and/or subject to a potential legal or contractual challenge or correction in the future does not mean they need to file a lawsuit.

Of course not. There's always the third unspoken option. It's also different if it's one or two offhand comments that aren't pursued, compared to constant and incessant harping about it like Rodney does.

How many logical holes do I have to poke in your posts for you to see it?

It would take you actually succeeding in doing so to find out.

Put it to a vote of the board

The argumentum ad populum logical fallacy in its purest form. Copernicus is turning over in his grave.

Oh so now there's uncertainty?

:earth: :astronaut: :gun: :astronaut:

You seemed pretty darn certain there was only one probable outcome - SPS LP Cramdown to Common.

I am "certain" that one thing is "probable"? I suppose you could word it that way, though the same applies to you.

To be specific, I said in the past that I thought there was a 75% chance of a senior-to-common conversion, and I upped that to 85% upon hearing John Paulson say on two different occasions that he expects Treasury's common ownership to be at least 90%.

What happened to - "Treasury thinks" it's illegal to write down the SPS, so that is not a viable path. Even if it's not illegal, that doesn't matter, because as long as they think it's illegal, they will act accordingly. Do you still think Treasury thinks it's illegal???

I guess you want to revisit this topic after all?

I used the quotes from Calabria's book to help form my 75% estimate, though it was the Supreme Court's Collins ruling that was (and still is) the primary reason I think a senior-to-common conversion is much more probable than a writedown. Even those quotes have been bumped down the list recently by John Paulson's comments.

Or maybe you can agree with my hypothesis that the PERSON who is in charge is more important than what someone said in a book quote in 2019?

No, I don't agree with this one. When it comes to specifically talking about the legality of a senior pref writedown, I don't think the personal opinion of the Treasury Secretary is relevant. It's the job of the DOJ to advise on things like this; they are the ones who represented Treasury in all the cases that had Treasury as a defendant.

Or - the AIG blue print says Treasury will take at least 92% because they had a fiduciary duty to shareholders, where they have none with GSEs so they will likely take MORE than 92%. Do you still think it's more likely that they will convert and take greater than 92% of the equity. Just so they can pad the Treasury with 15% more value than the warrants alone, because to do otherwise would be charity.

I'm glad you're keeping up with my arguments, and at least this time actually reporting them faithfully. I can see arguments for Treasury stopping at 90% or going all the way to 99%, but John Paulson's comments of 90-95% lead me to believe that going beyond 95% isn't all that likely.

Or - the government does not fear any lawsuits? So if 47 wants to get this done in a timely manner to add to his legacy, you don't see a few years tied up in the courts as something to avoid? You still think potential lawsuits are not a problem?

I don't think the threat of lawsuits will stop Treasury from either converting the seniors to commons or stopping at any given percentage of the companies. Injunctive relief claims would run smack into the 4617(f) bar, and takings/illegal exaction claims could only result in money damages being paid to legacy common shareholders later (they wouldn't undo the dilution and thus wouldn't hold up the release process).

If you have any other theories for potential lawsuits over a senior-to-common conversion that don't involve either takings/illegal exaction claims or injunctive relief, I might be willing to make a one-time exception to my first signature line. 😉

Ironically, you seem to be discounting the possibility that some person or group (I'm thinking of the Zandi/Parrott/Bright types) might file a lawsuit against Treasury if they write off the seniors! Lawsuits gumming up the works is a double-edged sword.

Hate to say it, but the current trends point to what the rest of us have been saying for a while - It was Political will and optics of the economy that got the GSEs into this mess, and it will only take Political will and optics to get them out.

I agree with this, but what does that have to do with whether or not Treasury converts the seniors to commons?

Remember - you think the value should be lower. So nothing is holding it back. The uncertainty is giving it artificial value.

The original post I replied to said "The balance sheet alone is bigger than Bank of America by almost a Trillion. This is essentially a large CAP stock with only 7-8 Billion in Market CAP? BAC has a 300+B in market CAP. The only thing holding this stock back is the conservatorship."

That made the implicit assumption that the price of the commons should be higher than it is now. I was following that thread and gave what I believe to be the primary reason that it isn't.

You are really digging deep to pick nits here.

Because I've seen it and was part of it when I worked on the federal regulatory side--long before I joined Fannie in 1983--solid capital is whatever the regulator says it is.
In this case. acceptable capital is whatever the WH-Treasury (in that order)--and the regulator say it will be.

No. 12 USC 4612(a) says:

(a) Enterprises
For purposes of this subchapter, the minimum capital level for each enterprise shall be the sum of—
(1) 2.50 percent of the aggregate on-balance sheet assets of the enterprise, as determined in accordance with generally accepted accounting principles;
(2) 0.45 percent of the unpaid principal balance of outstanding mortgage-backed securities and substantially equivalent instruments issued or guaranteed by the enterprise that are not included in paragraph (1); and
(3) 0.45 percent of other off-balance sheet obligations of the enterprise not included in paragraph (2) (excluding commitments in excess of 50 percent of the average dollar amount of the commitments outstanding each quarter over the preceding 4 quarters), except that the Director shall adjust such percentage to reflect differences in the credit risk of such obligations in relation to the instruments included in paragraph (2).


12 USC 4614(a)(1)(B) says:

(1) Adequately capitalizedAn enterprise shall be classified as adequately capitalized if the enterprise—
(A) maintains an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise under section 4611 of this title; and
(B) maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise under section 4612 of this title.


12 USC 4502(7) defines core capital:

(7) Core capitalThe term “core capital” means, with respect to an enterprise, the sum of the following (as determined in accordance with generally accepted accounting principles):
(A) The par or stated value of outstanding common stock.
(B) The par or stated value of outstanding perpetual, noncumulative preferred stock.
(C) Paid-in capital.
(D) Retained earnings.
The core capital of an enterprise shall not include any amounts that the enterprise could be required to pay, at the option of investors, to retire capital instruments.

The conclusion is crystal clear. In order for FnF to be classified as "adequately capitalized" outside of conservatorship, they must have core capital of at least 2.5% of balance sheet assets.

Neither Treasury nor the regulator (FHFA) can do anything about this. The only way to change the above conclusion is for Congress to change the law.

Can you re-look at the very recent changes in Capital Group's holdings? Commons, but also the JPS?
Posters on other sites are showing very large increases in the Commons by Capital Group, BOTH in FNMA & FMCC.
Have NOT seen anyone post on Capital Groups holdings changes in the Jr. Preferreds (JPS).

I have tracked AGTHX's quarterly holdings for several years. In Q4 2024 they added 122.4M commons (77.2 FNMA, 45.2M FMCC) and 30M junior prefs (15M FNMAS, 15M FMCKJ).

That brings their common ownership up to a bit over half of what it had been before the Collins ruling (127M FNMAS, 83M FMCC), and their junior pref position back up to where it was just after Collins.

If the increase in Commons is true, do they have an inside track, &/or Ackman's 'ear'?

I can only speculate on this, but I don't think either Capital Group or Ackman have any special influence on how Treasury will resolve its equity stake.

On the other hand, I think John Paulson will have a great deal of influence over this resolution given his proximity to, and large donations to, the current administration. That proximity was quite literal today; he was seated in the second row behind Presidents Clinton and Bush.

Kthomp - what is your estimate of value at 5% legacy common and 10% legacy common ownership for FNMA? How about FMCC?

I think Fannie's market cap at the time of Treasury resolving its stake (via senior pref conversion or warrant exercise) will be around $136-204B, which reflects $17B in earnings times a P/E of 8-12. 5% of that would be $6.8-10.2B, divided by 1.158B shares gives a share price range of $5.87-8.81. For 10% ownership, double that to 11.74-17.62.

That $5.87-8.81 range lines up pretty closely with what I have expected the endgame for the legacy common to be for a while.

Note that Ackman's presentation, with a share price target of around $31, assumes legacy common ownership of 18% of the companies.

Looking at Ackman as best case near term - what is the realistic worse case scenario? I am still thinking that John Paulson said 90 -95% UST ownership early on.

"Realistic" is a matter of opinion. I think a senior pref conversion is highly realistic, whereas Ackman downplayed the possibility with vague threats and platitudes.

Page 98 of Ackman's own presentation shows a legacy common value of zero if the seniors are converted to common. Treasury ends up with 92-96% of the common and outside investors get the rest; the junior prefs are not converted in these scenarios.

“” BOOM “ Ano on X.com

The only "boom" you will ever get from ano is him sticking his foot in his mouth at supersonic speeds, as he always does.

The illegal exaction finding by Judge Wheeler was overturned on appeal, which vacated Wheeler's ruling. ano is quoting a vacated, non-precedential ruling and acting as if it matters.

If the government wants to earn as much money as possible with the warrants, the price must be as high as possible as soon as the SPS are canceled.

On the other hand, if the government wants as much money as possible period (regardless of whether it comes from the warrants), they will convert the seniors to commons instead, which means they would actually want the per-share price to be lower. This is why Ackman fears that scenario so much.

I read it somewhere a few years ago. The free warrants are just-in-case measure to ensure government is in control if the GSEs go bankrupt.

Either your source or your memory is incorrect. The warrants were designed to both suppress the common stock price and provide additional value to Treasury.

Common shares cannot be collateral because they sit at the bottom of the capital stack.

Maybe UST can sell the warrants back to the GSEs, as an alternative. UST did the same to AIG.

Be careful what you wish for. Treasury exchanged its AIG preferred shares for a 92% stake in the common. The warrants were useless at that point.

Let's assume FNMA starts paying a dividend on $2 per share annually, on commons. (yes, big assumption)

What would be your best guess of stock price, based on dividend payment? with and without dilution.

I think this is a backwards way to go about things. Starting with a dividend amount per share doesn't work because you need a final, post-dilution share count to work with first.

The easiest way to do that is estimate what percentage of the companies that legacy common shareholders will have after all the dilution is overwith. That's a maximum of 20.1% if there is no capital raise or junior pref conversion, and can go all the way to zero (per Ackman's presentation) if Treasury converts the seniors to commons instead.

Ackman's presentation, adjusted to give Treasury an actual 80% for the warrants instead of a nonsensical 71%, gives the legacy common 9% of Fannie Mae. Since there are 1.158B shares of Fannie Mae common currently oustanding, that gives a total share count of 1.158B / 9% = 12.533B.

If Fannie makes $17B per year in income and is able to pay out 40% of it by regulation (see the payout ratio table in the ERCF), that comes out to about $0.54 per year per share in dividends.

Yeah - I think Ackman was on the low side. He needs to be conservative as his fund's reputation is as stake.

Ackman's price target is in no way, shape, or form conservative. It assumes that:

1) Treasury exercises the warrants but somehow ends up with only 71% of the common.
2) Treasury writes off the senior preferred shares for nothing in return.
3) The market places a 15 P/E multiple on Fannie at the time of the re-IPO.

Calling his price "conservative" means that you think somehow things are likely going to be better for legacy common holders than this. Do you really expect Treasury to have less than 71% of the common in the end, or for the P/E multiple to be greater than 15?

Increasing Treasury's stake from 71% to 80% in Ackman's base scenario cuts his share price target in half, for starters.

Don't look at Ackman's $31 as a worst case. It is far, far close to a best case than a worst case.



As far as his fund goes, FnF commons make up somewhere between 1% and 2% of total assets. If someone truly wants to claim solidarity with Ackman then they shouldn't have more than 1-2% of their own money in FnF commons either.