Tuesday, January 21, 2014

The Path of least Resistance

Remember the whitehouse projected 20 years for fannie and freddie to payback, this was reported early 2013. it took 9 months after the report. DC was off 19 years on their estimate.!! how is that possible?
It wasn't . And the current movement on these two GIANTS is because of the early payback. The govt is fully aware they will lose the court case and want to rectify all of it NOW. But they cant figure out how to do it without wrecking the economy. This leaves only one choice, take the easiest path. That path is to use the system that is working and tweak it. Give it back to the shareholders and charge a fee for the backstop. Everyone wins. Dont forget to do risk sharing from now on, for ALL the BONDS. And there ya go. The path of least resistance. This risk sharing is already happening NOW with fannie and freddie, and was working the entire time with multi-family. even in 2008-2013. Multi always made money and held its own. the only thing that went belly up was the BANKS FRAUDULENT loans they sent to F&F. This is the path of least resistance. FHFA regulate the two GIANTS to hold less new mortgages and have fannie and freddie open up the Common Security platform for the banks to sell there more risky crap that is non conforming, Like Bear Sterns did, and allow the Bond holders to share the risk with the banks on that garbage they write loans on. Im ranting now. sorry. The topic still holds true.

dr_curious1  7 hours ago
Yes, I remember very clearly--like it happened yesterday! Our government has effectively backed itself up into a very uncomfortable corner. Delay tactics will only work for so long. In fact, that "window of opportunity" that is so carelessly thrown around is almost shut. We (shareholders) have a major "win" coming just around the corner which is not emphasized enough. That "win" will be this forthcoming quarterly earnings in which we escalate beyond "net-zero" with no reform bill in sight. Once this is announced the dynamics will change drastically. There will be no more "almost paid back" and this is psychologically relevant. The media will sway public opinion in our favor as taxpayers are made whole and as we continue to be exonerated via winning countless BANK FRAUD lawsuits.
1st major win= Net-Zero
2nd major win= Court Ruling against net sweep of profits (IMO- window closes for any major reform)
3rd major win= NYSE re-listing or Release from Conservatorship

Warrants should be cancelled and stock should not be diluted unless there is an agreement of some sort which presents itself before the courts make a ruling. (I personally believe all warrants should be cancelled) Longs be patient,...sit back,…accumulate, and enjoy the ride! Be thankful that we were able to scoop up shares at such a ridiculous discount to value :) 2014 will be the year to remember! 

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