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All 110 Slides Of Bill Ackman's Fannie Mae Pitch
Everything (all 110 slides of it) you wanted to know about the GSEs but were afraid to ask... (with Bill Ackman's biased long perspective)
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zero hedge...news you need to cover....
Obama Regime Science Czar John Holdren Wants To Sterilize Whole Populations
http://survivalbackpack.us/obama-regime-science-czar-john-holdren-wants-...
Yeah, well now the policy is overt. Before you had to eat GMO processed foods sprayed with glycophosphates to sterilize yourself. Sure it was a bargain (organic foods are expensive) but now you need to pay for fertility treatments or adopt.
how about elaborating on FINRA's commitment to attacking investors privacy by means of tracking their trades?
Do I have to do everything around here?
http://www.zerohedge.com/news/2014-05-07/big-brother-coming-your-brokera...
Ackman has a serious Power Point obsession...they are almost always over 100 pgs...
I'm fond of the Johnson / Crappo proposal. It's a good old bipartisan "path to hell paved with good intentions" legislation.
Thanks to zh for posting info on Ackman's 10 % position in November.
I gave up on a house last year. Just stopped paying (I moved to another state for work/life). Finally got auctioned in early March. Fannie is involved. After two months, they STILL can't tell me what I owe (or maybe they owe me). I would prefer to get this settled somehow, pay what I gotta pay, and move on with my life.
And to boot, this is before the next housing market crash.
But, this is the new normal, where capital collapses into a financialization singularity emitting profit particles or some other magical bullshit. Jump in, the gravity well feels great!
Regards,
Cooter
Fannie and Freddie should not have private shareholders period. The government backs it 100%...they should own it 100% and profits should go straight to the Treasury. Or let social security take it over so they can earn an honest return. Why the hell should we allow the Acikmans of the world to profit instead?
Why? Because it's a big club and we ain't in it.
I read up to the point where he said the $5 Trillion "guarantee business" was "low risk". Then I stopped.
i guess you could get long housing here. afterall, it cant get much worse.
That's 110 pages of book-talkin there - impressive...
The point he's making is that it is low-risk relative to the FIA business, and it could be low-risk if you stripped out the riskiest portions (Alt-A, Subprime), and perhaps there are better ways to "insure" against losses than just doubling the guarantee fee... So, you missed some good points if you stopped that early.
Many of his slides are contradictory - he points out that most of the rest of the developed world does not use 30 year fixed mortgages, then says that preserving 30 year fixed mortgages is essential. Why? He gives a few reasons that are easily disputed:
Long term amortization - just because the rates are not fixed for 30 years, doesn't mean you can't amortize over 30 years.
Ability to refi - ask the millions of underwater borrowers how easy it has been to refi, versus a floating rate product that automatically floats down when rates decrease in a crisis.
His presentation is filled with logical flaws like this.
Mel Watt has a speech coming up next week - with a few words he could kill the Fannie investment thesis. He could do a number of things to destroy the profitability of these companies instantly.
“If you can't dazzle them with brilliance, baffle them with bullshit." - W.C. Fields
Here's another inconsistency - he claims private capital wouldn't generate adequate returns at current gfee levels, and then goes on to evaluate the returns assuming 5%, 7.5%, and 10% equity levels.
But THEN, he claims the GSEs should only have to hold 2.5% equity, based on the quality of the business. In terms of a leverage ratio, that is 40:1 risk to capital (a level nearly equal to, btw, the leverage the AAA financial guarantors held when he criticized them back in 2003).
So how come 40:1 leverage is OK for the GSEs, but not OK for private capital? Under the proposed J-C legistlation, private capital would still have to pay 10bps annually for a government backstop, and hold 10% cushion against losses (maybe 5% of that being equity).
Easy to make the numbers tilt in your favor if consistency isn't a binding constraint.