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The Most Shorted Stocks: Past, Present and the Market Implications
By Economic Forecasts & Opinions
This is an interesting segment from Fox Business aired on Dec. 28, 2009 where John Tabacco from locatestock.com talked about the top five most shorted stocks. The following is a summary of the interview along with some of my thoughts.
The Biggest Shorts - Past & Present
According to locatestock.com, the top short of the decade, and you guessed it, is Lehman Brothers.
But did you know...
- Other biggest shorts for the decade include TARP and bailout recipients: Fannie Mae (FNM), Freddie Mac (FRE) and CitiGroup Inc. (C).
- Overstock.com (OSTK), at number five, had 140% of its entire outstanding shares shorted at one point of time; giving rise to one very impassioned advocate against naked shorts - Patrick M. Byrne.
- Some big players base their short strategy on fundamentals, and sometimes will increase positions over time, or hold their short positions long (more than a year).
The new champion, according to Tabacco, is MSCI Emerging Markets Index Fund (EEM) - the most popular short by volume requested.
Dollar's Gain Is Commodities Loss
The rising short interest in MSCI Emerging Markets Index Fund (EEM) suggests a continued flight into the perceived safer U.S. market. This trend could further prop up the Dollar, and will likely have a negative impact on commodities, with natural gas probably being the only exception, as the flaming fuel is generally non-dollar reactive.
Dollar & Stocks May Rally Together
However, equities might stand a better chance since the inverse correlation seen between the Dollar and stocks remains broken, as discussed in my article just before Christmas. In fact, this view is reinforced by Dr. Marc Faber, who told Bloomberg yesterday:
"U.S. stocks and the dollar may keep rallying together, reversing a relationship that existed from March to November."
Faber also said that Dollar may appreciate 5-10% against the euro in the "near term" as bearish betting on the greenback becomes too crowded while equities advance.
The Three Amigos?
Shares of Fannie Mae (FNM) and Freddie Mac (FRE) soared to their highest since October on Monday after the Treasury Dept. signed over the checkbook by removing caps on federal support. Meanwhile, some analysts see Citigroup Inc. (C), with both explicit and implied government support, as "The Can’t Lose Trade Of 2010."
So, here is Question of the Day:
Would you buy Fannie, Freddie, Citi, and why?
Hint #1: The pay packages the Treasury announced last Thursday for Fannie and Freddie chief executives consisted exclusively of cash compensation; no shares were offered.
Hint #2: The Treasury Department had to shelve its plans to sell $5 billion of Citigroup Inc. (C) common stock in a public offering just two weeks ago.
Hint #3: CitiGroup, Inc. (C) has boldly gone for a zero valuation allowance since 2006 in its deferred-tax asset; whereas JPMorgan Chase & Co. (JPM) had a $1.3 billion, or 10%, allowance in its $13 billion net deferred-tax asset as of last Dec. 31.
Video Source: YouTube
"Masses are always breeding grounds of psychic epidemics." ~ Carl Jung
Economic Forecasts & Opinions
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Heck, all I know is the Goobermint isn't even paying on their leases. They're into me for 6 months already. Have fun with that 28 year horizon.
I'll preface this by saying I'm short w/ a third of my $ and the rest sitting in safety...BUT, the economy is better. Whether first derivative or second derivative, things are getting better (or worse more slowly). There is some modicum of stability. BUT, if after spending Trillions of future tax revenue we didn't see any "improvement", WTF. However, all this is at a cost and doesn't seem to be addressing many of the underlying difficulties. So, I find it hard not to see that "things are better" but the real question is the sustainability and the costs for this "better". You know my answer.
cH
I'll take door number 2, Monty...
I just read a comment that used the phrase, " if the economy continues to improve,". Am I at the wrong ZH website or, did I miss the beginning of the improvement?
Will someone tell me how and when the economy began to improve?
dog,
Thats like when they anounce that housing starts "unexpectedly" declined.
They must be doing headstands when they look at the graphs.
my favorite solar supplier, just lowered his base price, from $1.98 per watt, to $1.78, I'll prabably be buying some, before leo sells his shares. good technology, bad trade, right now. china, will sell at a loss to stay in the game. when you are fighting, for survival, profits, are not necessary. US natural gas, has more upside, than chinese solar. and you can lose your ass on a company, thats getting shorted big time. you can fight something bigger than you, cause you know you are right, but it still kicks your ass.
My thought has been that the best current alternative energy is natural gas, if the bureaucrats want to get serious they would switch from coal to gas on a large scale.... They are all blowing black smoke so far.
Leo,
Does the solar sector have any earnings? "Manipulation" is the new normal, is the Fed shorting solars?
The amount of naked short-selling going on in the solar sector is criminal. I don't really care because it allows me to add to my long positions but this has to be one of the most manipulated sectors out there.
Oh Boo Hoo!
I am clueless which way to trade. Based on previous patterns the SPX will likely trade off about 30 points back to 1100 before the January option expiration date and then move higher.
Citigroup will be a big turnaround story if the economy continues to improve. Most of the conversions have been completed and now it is ready to catch up with the rest of the financials.
time123
http://invetrics.com
What about Citi's off-balance sheet SIV's that it is supposed to claim in the new year?
"if the economy continues to improve"
Newsflash! It's not improving, in fact, it's getting worse. But I see how ya need some web hits to go along with the sweet beverage you are serving
MS
That's a mighty big "if".
Lonewar, why do you want to play your approach from the deep rough. Look at the yen crosses particularly AUD/JPY. Long AUD and playing the carry related to that will pay off your house quicker than all that agency stock. But then some people are very good out of the rough, so what do I know right?
johnny9iron,
Also, Fannie runs in 2 to 3 month cycles. With a share value of ~$1.00 it will run up about 50 to 100% and then drop off again another 50 to 100%. That is what I have been playing this year, the pure volitility of these shares.
If I could play with Other Peoples Monies, I would be buying Fannie common right now as we are set for another run up, and in about a month or two I would let a trailing stop sell it off and then buy some shorts on it at the same time.
But, since I have to play with my money (Of which right now I have no free cash in my Roth), I just buy when its low, and wait for it to go up enough so I like the profits, and then set my trailing stop.
And because I have an 8 to 6 pacific time zone job and can not watch the market all day, I usually set my stops at about 10 to 15% as the daily volitility on these stocks are huge; however, a 10 to 15% stop usually prevents me from being stopped out before the peak.
But, if you have some gambling money (Remember please, this is PURE gambling, not investing), we should be on another run up. Actually, I think is has already started about 3 weeks ago, but I do see some more short term gambling profits to be made here over the next monthish.
And if it goes down from here, just sit on it. Dont set your stops until the price has gone up enough to make you a profit after it starts going down and triggers your stops.
Is it sloppy, you betcha.
But this isnt investing, this is pure unadulterated gambling, or speculating if you prefer. =)
lonewar, i really admire your pluck.
you're essentially doing what pimco, wilbur ross, paulson, and the smartest others have been doing, albeit in an analog fashion.
piggybacking the big boys on the gov't gravy train isn't such a bad idea. and studying the trade for 8 months is what gives you the confidence to go against the grain and hang on through thick and thin- and going against the grain and hanging on through thick and thin is what it takes to make serious coin.
i dunno how your trade is going to work out, but you're learning what it takes to really make it in these mkts- setting up a trade that fits your parameters and doing your research and then going for it- every single great fortune in the world was made that way.
maybe you've stumbled upon the greatest trade of all time. or maybe this is just a great learning experience, getting your feet wet, or maybe just provides enough dough to move on to the next good trade or start your own business or whatever.
i can personally, firsthand because i know the guy, give you an example of a minimum-wage worker who made around $25m in a few years (trading futures)- he started with a few grand like you did. this guy is an autistic genius, can barely relate to others, lives and acts like a 10 year old, etc, but the point is that it can be done. and in my view it's done the way you're doing it.
i guess all this is just meant to be encouraging- i think you're doing the right thing and i think you should keep doing it. i say this because i like to see smart ballsy and decent people do well because that means society and evolution are headed in the right direction.
to the naysayers or 'realists' too paralyzed to trade i'll just say that the total capital at risk is negligible, the profit opportunity (although skewed by gov't largesse) is compelling, so the risk:reward ratio is advantageous. besides, it's fun! why the hell not? and if you're pouring the profits into gold, so much the better (i hope).
given your patience and focus and confidence i'm sure you'll do quite well sooner or later. every fortune started small.
devil take the hindmost!
Anonymous 177314,
Thank you for the compliments.
Truthfully, I am hoping to have roughly enough money to pay off my mortgage faster than paying on it for 30 years. That is my goal in life, at this point. So if in five years I have made enough to pay it off, wonderful, but right now I am betting on about 20 years as the break point - The point in time where my money in my Roth, minus penalties and taxes, equals what I owe on my mortgage, and I pull it out to pay off my house.
I dont like being a slave to my mortgage holder, but I do like my house, so a slave I am. But I yearn for my freedom, and that is what this bet is all about.
As for the $25 Million your friend made in a few years, to me that is fantasy land. That is the point where I pay off all the bills for my immediate and extended family, build a castle on a hill, and retire.
I am a simple sort of person, money is not my goal in life, so I doubt I will ever be rich, however, it is nice to dream sometimes. Meanwhile, I will just wait to get some more seed money before I can go back to playing again.
anon here again.
i just really like your attitude. if i were hiring, you'd be hired.
again, i won't guess how this trade of yours will turn out. i will say that i see a few possible endings here:
1.) goobermint finally allows F&F to fail (unlikely because F&F are essentially the Treasury at this point, and for the reasons you stated earlier).
2.) F&F continue muddling along like a comatose brain-dead prom queen kept alive as long as she's plugged in, in which case those preferred bounce along the bottom until the end of time with the divvies "suspended".
3.) F&F become the undercover conduit by which the goobermint keeps the entire financial sector alive, in which case they just might pay off everything at par.
i think #2 is quite likely as that would be maintaining status quo, which seems to be the goobermint's plan. but no status quo lasts forever, in which case the question becomes one of what the next phase will look like- likely either option #1 or #3. If the goobermint has decided that they can keep printing stealthily then it'll be option #3, or if we get anything approaching a recovery then it'll also be option #3 as FNMpH rises on fundamentals. so in all i think you stand a decent chance of doing quite well, esp because of your time horizon.
this is not a trade to rush into because the "muddle-thru" phase is likely to be prolonged, but you'll get some clues as to the likely outcome if the shares drift up or trend down. no matter what you'll be watching grass grow/paint dry for 28 years and 11 months- all the action will take place over a few weeks or it'll all just fizzle out. (see the "punctuated equilibrium" part of the theory of evolution.)
again, the key i think is the low investment to big reward ratio, and the fact that the trend (as ugly as it is) is your friend. another key, and this is important, is that you have tied the potential profit to a fixed debt- if these babies go to par the dollar will likely be toilet paper, in which case $50k will barely be lunch money, but your mortgage (assuming it's fixed rate) will remain the same. all in all, a perfect match.
28 years is a long time and alot can happen- so much in fact that it's truly impossible to predict. there's a real magic to the market- over such a time horizon a few thousand properly invested can generate much more than any salary over the same timeframe. so, while it may or may not be the right trade, there's no way to know so you are doing the right thing.
i can give you so very many examples of people who have done very very well over long timeframes, assuming they're properly invested, patient, and confident. maybe next time.
i just want to encourage you to not set your sights too low- you apparently have the intelligence, dilligence, confidence, and independence to do very well investing. this little streak of beginners luck i think is a sign you should continue exploring the mkts- be cautious in doing so, experiment and research, and perfect the style that works for you (it took me a while to discover options, but they suit my disposition/mindset and i enjoy them).
there are many brokerages/websites that allow you to paper trade- you open a fake account and there's a few hundred k$$$ in there for you to experiment with- neither the profits or losses are real, but until you have more real cash to invest these "games" will give you an opportunity in the meantime to get a feel for things and test new theorems. Thinkorswim.com has a 'paper money' thing- just register and start faux-trading!
i started where you are in 2004 and i am not loaded but i'm not 9 to 5'ing either! i have the benefit of not giving a damn about money, yet i'm not a gambler either. someone once said "i don't trade unless i see money just laying there on the ground"- there are some trades that are obvious but that few see. your individual perspective, needs, disposition, and intelligence allowed you to nab one. move slowly, but keep it up!
again, i just want to see society and evolution moving in the right way.
good luck, and all the best in 2010!
Anonymous 177691,
Again, thank you for your insights.
First, I dont plan to stop trading. My family seems to take a while to grow up, but when we do (Usually very late 20s early 30s), we find solid, stable jobs, and get down to the business of being boring middle class. However, we also dream, and as my father always said, the fastest way to get rich is to find a stream of money and find an honest way to make yourself a part of that stream.
Retail stocks and bonds are the way that I have found at present to make myself a part of a couple of streams.
And yes, I also see an outside chance of hyperinflation in the future, which is why I have fixed rate debts (Home, car). It is also the reason that I am in the market, as I figure if hyperinflatio does hit, stock will hit orbit allowing me to take out my money and pay off my obligations. Fortunately, I live in California under Prop 13, so if we do get hyperinflation my property taxes wont do the same thing.
What I dont understand is why people refer to government debt default and hyperinflation as two separate things. The outcome for both is the exact same, a zero state for debts of a country. Its just in one the receiving party gets nothing, and in the other the receiving party gets toilet paper... Well, maybe there is a difference, with debt default, only the government has their debts resolved, with hyperinflation the common person gets to join the fun too. So of the two, I think I would prefer hyperinflation.
As for your prior comment about taking the profits and investing them in gold, at this point gold is still out of my price range. I did look into it, but the local dealers around here wanted spot plus 25% for the 1/10 fractional. That is just an absurd amount of mark up - So I bought silver instead. =) Besides, I think silver has a better potential for holding wealth in the short and medium term (Both of them being equal in the long term).
But I am most comfortable being an old style dividends investor. I am not truely after capital gains, I play that way with my FNM and SIRI, but I am most comfortable with my JNK that I bought at $25 and change. Why more people arent buying this ETF is beyong me (Well, at its current price I can understand, but back when it was $25 and $26!?!?!) It pays a monthly dividend of between $0.35 and $0.40 per share, that was a guaranteed 15% annual simple return. That return will even beat SGS inflation numbers. Why a retirement fund didnt drop $500+ million into it then is beyond me. That is my ideal trade, which probably only exists in ETFs these days - Find a fund that has a monthly payout and buy into it when it is down - Then I dont care what happens to the price, the income stream is based on the number of shares.
I am just hoping that if we have another crash this year that it happens after I have my additional seed money available. I plan on staying in cash for a bit for the first part of the year. (At least through March) If we get the crash I load up more JNK (Or if the price goes low enough more FMNpH). If we dont then I have cash to play the FNM volitility.
The problem with the paper trade accounts is that if I actually had say $250,000 it would all be in JNK via my Roth as that works out to a ~$2187 per month tax free income stream. While that amount is not quite what I make a month right now by working, it is awfully close, and given a few more years of dividend reinvestment would equal what I make working. Then how would I get to help people while retired? (I work in government public service so that I can help people, it seems to be a genetic defect with my family that we have to try and help people)
Anyways, again, thank you for the coversation and the insights.
johnny9iron,
I am really a joe6pack investor. I have NO FRIGGIN clue about Forex, currencies, etc. Basically in that market I am nothing but a mark.
I dont play with leverage, and I dont short. My losses are limited to what I have on the table at any given time. It severly limits my profitability; however, it contains my risk.
I have a 28 year time horizon as I said earlier. So for me, if a trade has unexpectly gone against me, I can afford to just sit on it for a while. The money I am playing with is totally written off already, I dont need it for the daily bills, and I trade inside of a Roth IRA so I dont worry about short term gains or losses.
I'm not a pro here, but long AUD only has a potential upside of what? $0.65 from here? Also, it requires some action to get going no? The FNM/FRE plays are more like, sit back and let the horrible government do its thing.
besodemuerte,
BINGO.
When I went into this trade I only wanted one thing out of it - 1000 shares of Fannie Mae to sit on for 28 years. I am a two bit investor, my total value at play in the market is the $2500 I wrote about earlier, so I wanted in on something that had an enormous upside potential in that timeframe. Something that was identifyable. And something that was at least reasonably safe in not loosing everything.
I studied Fannie for 8 months before jumping in, and I jumped in at one of the mini peaks that they had anyways. (But that was because of when my investing money became available). I got to watch my investment get cut in half before it shot up again. I lost some potential profits as I was unfamiliar with Trailing Stops for the first six months.
I am not an investor, I am a gambler.
Please do not confuse me with someone who is in this market and studies their charts (Either Technical or Fundamental). I only have two things going for me. My time horizon, and a belief that the US Government is too afraid to let F&F fail as that would probably kill every bank in America, and a large percentage of the worlds banks as well.
And I did lie a little bit, I did look at Fannies quarterly and annual reports, and what I saw was this - Fannie has 5 Trillion dollars in mortgages on the books at about 5.5% - Fannie is currently getting money at about 2%. A 3.5% spread on 5 Trillion dollars is $175 billion a year. Currently most of that is off balance sheet in Special Investment Vehicles which means that the profits are going to those investors. When FSAB 166/7 comes out all of that should come back onto the balance sheet, and I believe that there will be a noticable change in F&Fs profit and loss; however, they will first need to stash those profits into loss mitigation, which should take about 3 years. (That would give them a $525 Billion cushion). After that those profits then become available to paying back the Private Fed, and Treasury for the bailouts, and then the shareholders start making some money again.
Fannie is reasonably intelligent, take a look at their redemptions and offerings over the last year. They are redeeming every friggin thing that they have and issuing look term bonds at ~2% to pay for them. Their cost of capital has drops almost a full percentage point in the last year, and for $5 Trillion that is a $50 Billion dollar savings.
The Fed is also not stupid, assuming the whole thing doesnt fall apart and go to revolution, the Fed is looking at 2% of 5 Trillion for 30 years, guaranteed. $100 Billion dollars per year will buy a LOT of politicians, and keep them bought.
Fannie and Freddy together represent the largest annual movement of money in the world that I am aware of, so yes, I am willing to gamble on trying to get a piece of it.
And if I am wrong, I am out my initial investment of, oh thats right, the profits I have made this year means that my cost basis for the Preferred H's is $0.00... (My original cost was $650 for the 1000 shares of Fannie Commons, but that money has been reinvested in JNK, SIRI, and GDXJ.)
If I am right my preferreds either get called and I made $50k, or they start paying dividends again and I make ~$2700 per year.
Thats a gamble I can live with.
I am not trying to be obnoxious, but you would have to trade currencies to know the value of that type of trade. Since Lonewar was brave enough to play the napalmed finacial agencies, he would not mind the risk involved with currencies. Then again, if you can't shoot under 90, don't waste your money on a nice course.
As long as you go into each day with a trading plan, do your homework and understand that it is THEIR pool, currencies are a fair place to make some money.
The AUD/JPY trade doesn indeed have very limited upside potential. The pari has been banging its head against the resistance level at 82.5 for several months.
As the funny money runs out of the central banks and investors actually have to take risks, the AUD will get crushed by the yen in a move toward safe-haven currencies.
If you are long AUD expecting some giant upside surprise. The best thing to do is to set a limit to sell at 82.5000 and wait for the results. Otherwise, I think you're asking for some trouble.
:D
Orly
I actually own shares of FNM. (Currently FNMpH). I bought Fannie in February of 2009 at $0.30 per share, and sold and rebought them several times throughout the year, changing my initial investment of ~$800.00 into ~$2500.00 today. However, last time my FNM shares sold off due to my trailing stop I did not reinvest in them, I invested in the Preferred H series.
I did all of this as a complete and utter gamble. No analysis, no research, just bought them because I knew the government would support them short term.
My FNMpH bet is a lot longer term however. This is a bet with 3 possible outcomes:
1.) The government nationalizes FNM and FRE and wipes out the stock-holders - I lose some of my profits, and a LOT of banks that can hold these preferreds on their balance sheets at par and have it count as Tier I capital become insolvent - Not likely, but definately possible (This should have happened a long time ago)
2.) FNM and FRE magically get better, or get nationalized and the government wipes out the common, and pays the preferreds and bonds at par - Much more likely and I make about a 3500% profit.
3.) FNM and FRE get better slowly via income streams from $5 Trillion in mortgages - They eventually start paying dividends again on their Preferred Stocks - My preferred stocks currently have a guaranteed dividend of roughly 200% of what I paid for them (Assuming the are ever declared - Non-Cumulative dividends suck...) (My long term wet dream)
Yes, they are a gamble. There is no difference in what I am doing and going to a casino and setting down $1500 on 32 black and spinning a wheel, however, with my bet, I dont loose unless number 1 happens. This is because my investing horizon is 28 years, and as long as they arent nationalized I get to keep spinning the wheel.
Oh, and for all you shorts out there, can you please step it up in late February - I should have another chunk of change to invest by then and I would love to see FNMpH down to $0.30 per share again, or FNMpS at $0.05...
My goal is to eventually have 3000 shares of FNMpH or 1000 FNMpH and 4000 of FNMpS so if they ever recover I can cash them out and pay off my house; which is fitting I guess.
Very interesting bet Lonewar, I applaud your courage to maraud into unpopular/'taboo' areas. I read somewhere that the Fed would make an announcement sometime in February/March, is there any truth to that?
You bring up a great point about banks being able to hold preferred shares as tier 1 capital, and with mark to market rule being "eased" there's no saying what the banks value those preferred shares in their balance sheets. What I do wonder is, what is the total par value of all the preferred shares series issued by Fannie Mae? Because the Fed will only intervene if there is systemic risk to the economy, so the par value should of all combined preferred shares should be in the 10s of billions at least before the Fed will look into the issue.
superpico,
From what I remember off the cuff there is a few tens of billions in preferreds sitting out there on Fannie. I believe the Preferred H Series was about 5 billion at par when issued.
And to the post above superpico's,
Nope, I cant identify any banks that are holding F&F at par; however, I can assume that any banks that have it can list F&F as held to maturity, and with mark to fantasy accounting this means that they can hold it at par, and it also prevents them from taking a 90% haircut on these assets.
"Nope, I cant identify any banks that are holding F&F at par; however, I can assume that any banks that have it can list F&F as held to maturity, and with mark to fantasy accounting this means that they can hold it at par, and it also prevents them from taking a 90% haircut on these assets."
You know what happens when you assume...
http://www.cfo.com/article.cfm/12229793/c_12207327
While the federal government is bailing out Fannie Mae and Freddie Mac, a number of already embattled banks are starting to issue warnings about the hits they must take on their balance sheets as a result of the historic deal.
As a result of the deal with the government-sponsored enterprises, which suspended the dividends shareholders would earn, many classes of Fannie and Freddie’s preferred stock plunged around 80 percent in value on Monday, according to the Associated Press. Banks typically hold the preferred stock as part of their core capital and will likely have to write off those losses, the news services reported.
PNC Financial Services Group, for instance, warned in a regulatory filing it expects to record a "significant other-than-temporary impairment charge" in the third quarter on the shares of perpetual preferred stock in Fannie Mae, as well as the Federal Home Loan Mortgage Corporation, with an aggregate cost of $80 million.
http://www.lloyds.com/CmsPhoenix/DowJonesArticle.aspx?id=405227
Daily List Of Companies Reporting Fannie/Freddie Exposure
The following is a list of companies who hold or had recently held equity or debt of Fannie Mae and Freddie Mac. The list, which runs in reverse order by date of disclosure, will be updated on a daily basis as companies continue to report their exposure.
Anonymous 177080,
The problem with both of those stories is that they are from September 2008. This was when we had true mark to market accounting still in place. I March 2009 we got to switch to Mark to Fantasy accounting, which allowed banks to re-revalue their Fannie and Freddie at par.
Funny how banks had an awesome first quarter 2009 isnt it... especially after a ravaging third quarter 2008.
Like I said though, I am assuming (Making an ass out of u and me), that banks are currently marking their F&F to fantasy, just like I am. =)
Those stories are all from September 2008 because that's when the government took over Fannie & Freddie and the preferred and common stocks blew up. By March, 2009, every bank or insurance company holding those stocks would have either sold them at a loss or written them down.
" I March 2009 we got to switch to Mark to Fantasy accounting, which allowed banks to re-revalue their Fannie and Freddie at par."
The mark to market issue pertains to relatively illiquid securities or loans or other bank assets that can't be easily valued. It doesn't allow banks to carry preferred stocks on their books at par after they have suspended their dividends and trade in the market every day at roughly 5% of par. Securities like that are considered permanently impaired and no auditor is going to allow them to be carried on the books at par.
Even if you're speculating instead of investing, I'd think you'd be better off doing so on the basis of facts instead of assumptions.
"a LOT of banks that can hold these preferreds on their balance sheets at par and have it count as Tier I capital become insolvent"
Could you identify ONE bank or insurance company that is carrying Fannie or Freddie preferred at par?
There are none, the preferreds are worthless. Fannie and Freddie owe the government more than they have earned in over 20 years, and going forward are not being run for profit.