about the trading activity in FNM/FRE preferred shares. It was clear
then that there was a buyer. The buy side interest has continued:
There are a number of possible explanations for this unusual price action.
-A broad base of ‘punters’ saw the signs that I saw and said, “What the heck”.
I would give this a very low probability.
-A large Prop desk is behind this.
buying is going on across 40 separate share issues. This is a well
organized effort by a large player. This is a good guess, but those
‘desks’ are very close the desks that run the big Agency business that
goes on every day. That is a stinky conflict.
-The Agencies are behind the buying.
can’t be. They are NYSE listed and subject to disclosure. In addition
they are owned by the Treasury. As such the must live to a higher
standard of disclosure. A ‘sneaky Pete’ buy back just doesn’t fit in
with that picture.
-This a completely random event of no significance.
market cap of these securities has appreciated by $1.5 billion over the
past five weeks. Big money. Someone appears to be wired. If the
Agencies and FHFA have a plan for the pref they should share it with