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re: Some common myths about the markets that are untrue and/or 99% do not know
Posted on 4/17/24 at 4:01 pm to wutangfinancial
Posted on 4/17/24 at 4:01 pm to wutangfinancial
quote:I mean, yes? It's been several years since I stopped tracking it, but I just looked now and Fannie booked net income of over $17B in 2023. I think they could fully service the pref dividends for like $500M annually. If they re-instated them like that, the prefs would basically instantly go to par. So for sacrificing like 3% of their earnings they could make this eyesore go away. Who is it good for to have them trading at cents on the dollar and with tons of court cases?
You serious, baw?
2
Posted on 4/17/24 at 4:28 pm to Big Scrub TX
All those names are vastly higher now, but I still think it's crazy that the agencies haven't just started paying the divvies again. For like $1B total annually, they could make them all go back to par and get rid of all the lawsuits.
Also, Lehman exposure wasn't that bad - I think almost all counterparties got paid in full.
This right here tells me you are a professional money manager of some type, cheers. This issue with Lehman is if you are at a public company you still usually have to sell before the full recovery occurs. This is how vulture investors make money. But you are spot on. As for the FNM/FRE they got close to going back private back during Trump but it has been a long wait for investors like Paulsen who has a BIG bet on the prefs. And even if they start paying the divs are not cumulative.
Also, Lehman exposure wasn't that bad - I think almost all counterparties got paid in full.
This right here tells me you are a professional money manager of some type, cheers. This issue with Lehman is if you are at a public company you still usually have to sell before the full recovery occurs. This is how vulture investors make money. But you are spot on. As for the FNM/FRE they got close to going back private back during Trump but it has been a long wait for investors like Paulsen who has a BIG bet on the prefs. And even if they start paying the divs are not cumulative.
This post was edited on 4/17/24 at 4:32 pm
Posted on 4/17/24 at 4:54 pm to Big Scrub TX
The FHFA and the Treasury have been sweeping all of their profits ever since they found out the GSEs were profitable. They forced them into conservatorship on the hilarious grounds that they had solvency risk even though it was just some deferred tax liability reversal causing cashflow issues. The Feds knew it was B.S. but frothed at the mouth over the billions in profits they could steal. I think the sweep ended a few years back but not sure.
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