Freddie (FRE) & Fannie (FNM) 01 (May 08 - Feb 12)

[ishak]

K: Thanks.
Trying to enjoy the volatility in the financials. Now need another catalyst to trigger the downfall again.
Stop loss @100 for SKF with new open position @115.4.

[kennynah]

i have been watching spx....my chart actually has a fibo 38.2% exactlt at 1291...which this morning hit and turned... same same for dow...11615 (23.6%) again now hovering there...

i am not absolutely sure that this mkt is losing strength....surprisingly, it is strong, all things considered...

but i think, one can either wait for clarity or take a chance....

same like yesterday... it appeared weak and then...boom....it flew to the roof...

so, cant tell for sure...

only sure thing is....it's really now a trading market...

good luck man !

[millionairemind]

Profits are split among the shareholders but losses are socialized by the American consumers

Fannie and Freddie rescue, a bailout for whom?
Wed Jul 23, 2008 6:49pm EDT

NEW YORK (Reuters) - The rhetoric from the Washington backers of the Fannie Mae-Freddie Mac rescue effort has been consistent on one front: this is no shareholder bailout.

But that message seems to have been lost on the stock market, particularly holders of Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) shares. After being on an apparent trajectory toward zero just over a week ago, both stocks have more than doubled since the beginning of last week when the Bush administration unveiled its plan to shore up the two lynchpins of the U.S. housing market.

"The real winners are the investors who bought Fannie and Freddie shares last week," said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey.

True, many long-time shareholders are still reeling, with both stocks still down by some 80 percent since the credit crisis erupted last summer. And no one argues that the primary goal of the plan's architects is to put a floor under a shaky mortgage market. Fannie and Freddie are two biggest U.S. providers of mortgage finance.

"This is a bailout for the mortgage market -- not for Fannie and Freddie shareholders," David Dreman, chairman of Jersey City, New Jersey-based Dreman Value Management, LLC, said in an interview on Wednesday. Dreman is one of the largest holders of Fannie Mae and Freddie Mac shares.

On Wednesday afternoon, the U.S. House of Representatives approved the measure, sending it on to the Senate. The White House earlier had dropped a previous threat to veto the legislation.

The plan allows Fannie and Freddie, which are chartered by Congress but are privately run companies, to have access to an expanded credit line from the Treasury Department and even access to money from the Federal Reserve if needed. Also, it would permit the Treasury to make unlimited equity purchases in Fannie and Freddie to prevent a collapse in the firms.

(Truncated)

[millionairemind]

U.S. House Approves Fannie-Freddie Bill by 272-152 (Update1)

By Brian Faler

July 23 (Bloomberg) -- The U.S. House of Representatives approved legislation designed to shore up confidence in Fannie Mae and Freddie Mac and stem the record surge in mortgage foreclosures, sending the bill to the Senate.

House members voted 272-152 in favor of the measure, which lawmakers and administration officials expect will be passed in the Senate and signed into law by President George W. Bush. The bill gives Treasury Secretary Henry Paulson power to inject capital into Fannie Mae and Freddie Mac and provides for a federal agency to insure refinanced home loans.

Paulson overcame opposition within his own party after some Republicans said the bill risked taxpayer funds and fell short on overhauling the mortgage-finance firms. The Treasury chief said the measure was critical to U.S. financial-market stability and persuaded Bush to drop a veto threat.

``This is the most important piece of housing legislation in a generation,'' Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, told reporters in Washington today. Paulson said he was ``pleased'' with the vote and would ``look forward to working with the Senate'' to get the bill to Bush's desk this week.

Senate Majority Leader Harry Reid, a Nevada Democrat, said earlier that he aimed to get it through the Senate by the end of the day. The bill is ``a very good piece of legislation,'' he said.

DeMint Amendment

Senator Jim DeMint, a South Carolina Republican threatened to postpone a final vote until later this week unless he's given a chance to amend the bill. He has proposed an amendment that would bar government-sponsored enterprises Fannie and Freddie from lobbying Congress during the course of the bailout plan. Reid rejected the request, saying it would delay the measure by forcing the House to vote on it again

The legislation divided Republicans, with House Minority Leader John Boehner criticizing the Bush administration for supporting a bill he said didn't go far enough to reform Fannie Mae and Freddie Mac and would leave taxpayers on the hook for ``billions and billions of dollars.''

``I am disappointed that we couldn't do better -- I'm even more disappointed that the White House will sign this,'' Boehner, an Ohio Republican, said in a speech on the House floor. Three-quarters of the chamber's Republicans voted against the bill.

Equity Purchases

The Treasury secretary would get power to make unlimited equity purchases in and lend to Fannie Mae and Freddie Mac to prevent a collapse in the firms that account for 70 percent of new U.S. mortgages. The bill also provides for a federal agency to insure as much as $300 billion of refinanced mortgages for struggling homeowners.

The Treasury chief said today that the bill will send a ``very strong message'' and is ``key to helping us turn the corner'' after a slide in confidence in the firms.

The White House dropped a veto threat over a measure to buy up foreclosed properties, spurring Reid to predict the Senate would also approve the bill.

Fannie Mae gained $1.59, or 12 percent, to $15 at the close in New York Stock Exchange composite trading. Freddie Mac added $1.10, or 11 percent, to $10.80. The Standard & Poor's 500 Stock Index gained 0.4 percent to 1,282.19.

Bush to Sign

White House spokeswoman Dana Perino said today that Bush will sign the bill, removing the previous veto threat over a provision to include $3.9 billion in aid to communities hit by the housing recession. The administration had maintained the measure would aid lenders who now owned the vacated properties rather than struggling homeowners.

Bush met early today with Chief of Staff Josh Bolten, senior counselor Ed Gillespie and others, and they sided with Paulson's recommendation that he sign the bill, Perino said.

Paulson's ability to sway the president and his willingness to abandon the government's opposition to giving financial succor to the two mortgage companies demonstrates the Treasury chief's clout within the administration, analysts said.

Paulson and predecessor John W. Snow had repeatedly urged limiting the role of Fannie Mae and Freddie Mac and reducing their implicit government guarantee.

``There's no other person in the administration with the experience and influence Paulson has in these matters,'' said Bruce Bartlett, who served as a Treasury Department economist under President George H.W. Bush. ``There was a political necessity to be seen as doing something, regardless of ideology.''

Stronger Regulator

The bill would create a stronger regulator for Fannie Mae and Freddie Mac and give the Federal Reserve a consultative role in overseeing their capital.

``The legislation will give the new regulator the tools necessary to ensure the safety and soundness of the GSEs so they fulfill their mission of providing stability, liquidity and affordability to the mortgage market,'' James Lockhart, director of the current regulator, the Office of Federal Housing Enterprise Oversight, said in a statement.

Representative Barney Frank, a Massachusetts Democrat who chairs the House Financial Services Committee, helped steer the talks after backing Paulson's call for the emergency measures for Fannie Mae and Freddie Mac, which would last through 2009.

Lawmakers, intent on limiting any losses to taxpayers, tied the potential aid to Fannie Mae and Freddie Mac to the federal debt limit. They also raised that ceiling to $10.6 trillion from the current $9.815 trillion.

$12 Trillion

Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac own or guarantee about half of the $12 trillion of U.S. home loans outstanding. The companies face mounting losses stemming from the collapse of the subprime market.

``This is about not only our housing markets, but it's about our capital markets more broadly,'' Paulson said in an interview with Bloomberg Television yesterday.

The housing bill would create a program aimed at helping an estimated 400,000 Americans with subprime home loans refinance into 30-year, fixed-rate mortgages backed by the government.

Fannie Mae and Freddie Mac would have a new, higher cap on the size of mortgages they may purchase. The new limit would be $625,000, or the median home price plus 15 percent, whichever is lower, Frank said. The cap wouldn't drop below $417,000.

States would be able to offer an additional $11 billion of mortgage-revenue bonds to refinance subprime loans.

The Congressional Budget Office yesterday estimated the cost of Paulson's plan at $25 billion.

``It's pretty good news -- a lot of people thought it would be much higher,'' Senator Richard Shelby of Alabama, the Senate Banking Committee's top Republican, said yesterday.

[ishak]

New regulator mulls over fresh capital standards for Fannie, Freddie
Home finance firms seen reporting losses until Q12009
Business Times - 06 Aug 2008

(WASHINGTON) The head of the new regulatory agency overseeing Fannie Mae and Freddie Mac said he is mulling fresh capital standards for the mortgage-finance companies, and said he expects the agency to move with 'deliberate speed'.

James Lockhart, chief of the newly formed Federal Housing Finance Agency (FHFA) and who also headed the predecessor regulator, told Reuters in an interview on Monday that protecting the country's housing finance infrastructure is his biggest priority.

The FHFA was conceived as part of a sweeping, housing-rescue bill meant to aid the battered homes market and buttress Fannie and Freddie which had been pushed to the brink of collapse.

The FHFA, which replaces the Office of Federal Housing Enterprise Oversight (OFHEO), will oversee Fannie and Freddie, the two largest US home finance providers, and the 12 Federal Home Loan Banks. All 14 entities have government mandates to make investments in the housing market.

Mandating the capital cushions that Fannie and Freddie must hold against possible losses is one of the most nettlesome duties facing the new regulator. The predecessor OFHEO needed nearly nine years to set those standards.

'I can guarantee you that . . . we won't take anywhere near that time,' Mr Lockhart told Reuters. 'We will work on it. I can't give you any deadlines.'

Mr Lockhart said protecting the housing finance infrastructure is his biggest priority. 'I think our key goal has to be, our No. 1 focus has to be, the safety and soundness of these 14' government- sponsored enterprises, he said.

Since Mr Lockhart became the overseer for Fannie and Freddie in mid-2006, he had argued for consolidation of all the federal housing regulators.

When President George W. Bush signed the housing legislation on Wednesday, Mr Lockhart became the new agency chief.

He is likely to be replaced soon after a new president moves into the White House in January but will help build many new systems before then.

Mr Lockhart said that he has spent the last two years mulling over how to set risk-based capital rules for Fannie and Freddie but that establishing such standards would come only after much input from mortgage industry stakeholders.

Mr Lockhart was one of the strongest advocates for creating a new housing regulator but recent turmoil gave those arguments an important boost.

A year ago, shares of Fannie and Freddie were trading above US$60 but were driven to single digit early last month as investors worried about future mortgage losses. The crisis subsided only after the US Treasury Department and Federal Reserve promised to backstop the companies. Creating a new housing regulator was one condition of government aid.

Fannie and Freddie may report net losses through the first quarter of 2009 as home-loan delinquencies rise to the highest on record, analysts' estimates show. Freddie probably will say today when it releases second-quarter results that it had US$1.9 billion in credit-related costs, while Fannie will report US$2.4 billion, according to Credit Suisse analyst Moshe Orenbuch in New York. The companies' regulator said on July 22 that they may need to write down the value of US$217 billion in securities.

'We see them continuing to lose money for the next several quarters,' said Mr Orenbuch, the top- ranked analyst covering the companies, according to Institutional Investor magazine. He rates Fannie and Freddie 'underperform'. Their credit losses are still going to be stubbornly high and that's only partially offset by the better revenues for guaranteeing loans from default, he said.

Freddie has yet to write down the value of US$150 billion in privately issued sub-prime, Alt-A, option adjustable-rate mortgages and home-equity loan securities because the company considers those losses 'temporary' and expects to recover the full investment when the debt matures, according to Mr Orenbuch.

That could lead to potential losses of US$24 billion more, he said. -- Reuters

[ishak]

Freddie Mac reports $821 million loss as it cuts dividend
By Steve Goldstein

LONDON (MarketWatch) -- Freddie Mac said it swung to a second-quarter loss of $821 million, or $1.63 a share, after taking $2.5 billion in provisions for credit losses. Revenue fell to $1.69 billion from $2.34 billion. Analysts polled by FactSet Research had expected a loss of 38 cents a share. The mortgage giant is going to cut its third-quarter dividend to 5 cents a share or less from 25 cents a share and pay the full preferred dividend. In addition, the company continues to review and consider other alternatives for managing its capital including issuing equity in amounts that could be substantial, reducing or rebalancing risk, slowing purchases into its credit guarantee portfolio, and limiting the growth or reducing the size of its retained portfolio. Estimated regulatory core capital was $37.1 billion at June 30, which represented an estimated $8.4 billion in excess of the company's statutory minimum capital requirement, Freddie Mac said.

[kennynah]

Freddie Mac Drops In Pre-Market On Quarterly Results
8/6/2008 8:22 AM ET

(RTTNews) - Freddie Mac (FRE: News, Chart, Quote ) is tumbling in pre-market trading on Wednesday following the release of worse-than-expected quarterly results.

At 8:20 am ET the stock is trading at $7.20 down $0.77 from Tuesday's close.

With the decline, the stock stands to open below recent support and at its lowest level in about two weeks.

[ishak]

Freddie warns it may dilute existing shareholders
Mortgage giant says it will consider raising more than $5.5 billion in capital
By Alistair Barr, MarketWatch
Last update: 10:49 a.m. EDT Aug. 6, 2008

SAN FRANCISCO (MarketWatch) - Freddie Mac said on Wednesday that it is considering selling a "substantial" amount of new stock to meet regulatory capital requirements and warned that this could dilute current shareholders.

The mortgage giant also said its new regulator, the Federal Housing Finance Agency, may increase its capital requirements. The company has committed to raising $5.5 billion in new capital, but it will consider raising more than that, depending on what it needs and market conditions.

Freddie reported an $821 million second-quarter loss on Wednesday, slashed its dividend and set aside $2.5 billion in provisions to cover credit losses, more than twice as much as in the first quarter. The stock fell 14% to $6.89 during morning trading.

Freddie and rival Fannie Mae guarantee roughly half of all residential mortgages in the U.S. With home prices falling and foreclosures surging, they're suffering billions of dollars in losses and have been under pressure to raise new capital.

A plunge in their shares last month forced the U.S. government to say it will lend more money to the companies and possibly buy equity stakes in the businesses if necessary. But that support also came with strings attached in the form of a more muscular regulator, the Federal Housing Finance Agency, or FHFA.

Freddie noted on Wednesday that since the middle of June there's been a big drop in its shares. That will probably affect the company's approach to raising new capital, it added in a filing with the Securities and Exchange Commission.

While noting that it has committed to its old regulator, the Office of Federal Housing Enterprise Oversight, or OFHEO, to raise $5.5 billion of new capital, Freddie said it "will evaluate raising capital beyond this amount depending on our needs and as market conditions mandate."

Despite losses in the second quarter, Freddie said it still has capital that's 20% above the level required by OFHEO.

"Given the challenges facing the industry, we expect to take actions to maintain our capital position above the mandatory target capital surplus," the company said.

In addition to cutting the common stock dividend, "we continue to review and consider other alternatives for managing our capital including issuing equity in amounts that could be substantial and materially dilutive to our existing shareholders," Freddie warned.

The company said it may also slow purchases into its credit guarantee portfolio and limit or reduce the size of its retained mortgage portfolio.

The Federal Housing Finance Agency and the recent new housing law may "increase our capital requirements, limit our portfolio and new product activities, increase our affordable housing goals, or limit our ability to attract and retain senior executives," Freddie also warned in the quarterly filing with the SEC.

[ishak]

Fannie Mae takes $2.3 billion loss, slashes dividend
Washington Business Journal - by Bryant Ruiz Switzky Staff Reporter
Friday, August 8, 2008 - 9:27 AM EDT

Continued credit problems pushed Fannie Mae to a $2.3 billion second-quarter loss, prompting it to cut its dividend to 5 cents per share, the company announced Friday.

Losses at D.C.-based Fannie Mae (NYSE: FNM), the largest buyer of home mortgages in the U.S., totaled $2.54 cents per share, while analysts polled by Thomson Financial were expecting losses of only 69 cents per share. Last year, the company posted a $1.83 billion profit, or $1.86 per share in the second quarter.

Losses were driven largely by $5.3 billion the company spent on credit-related expenses, including $3.7 billion which was added to combined loss reserves. Fannie predicted 2008 will be the peak year for credit-related expenses.

“Our second-quarter results reflect challenging conditions in the housing and mortgage markets that began in 2006 and have deepened through 2007 and 2008,” said Daniel Mudd, president and chief executive officer in a statement. “We have already undertaken a series of initiatives, including raising more than $7 billion in additional capital in the second quarter, to help us manage through the most difficult U.S. housing market in more than 70 years.”

While Fannie says it is well capitalized with $47 billion in the coffers, it announced a series of initiatives to conserve capital. By slashing its dividend to 5 cents a share from 35 cents a share, the company will preserve $1.9 billion in capital through 2009. It also will reduce its annual operating costs by 10 percent by the end of 2009 and increase its guarantee fees by a quarter of a percent, the company said.

Revenue at the mortgage giant was $4 billion, up 46 percent from 2007 and up 5 percent from the first quarter 2008.

Earlier this week, Fannie’s government-sponsored rival Freddie Mac (NYSE: FRE) also posted higher than expected losses and cut its dividend to a 5 cents a share.

Fannie’s stock was down 14 percent to $8.66 in pre-market trading Friday. Its 52-week range is $6.86 to $70.57.

Latest Price: $8.7 down $1.2

[ishak]

Fannie Mae Announces Offering of New Issue 3-Year Benchmark Notes

WASHINGTON, Aug. 12 -- The following is being issued by Fannie Mae (NYSE:FNM):

3-Year Pricing Date August 13, 2008 Settlement Date August 15, 2008 Maturity Date August 15, 2011 Issue Size $3 billion Coupon TBD Payment Dates Each February 15th and August 15th, beginning February 15, 2009 CUSIP 31398ATL6 Listing Application will be made to list the securities on the EuroMTF market of the Luxembourg Stock Exchange

Deutsche Bank Securities Inc., Lehman Brothers Inc. and Merrill Lynch Government Securities are the joint lead managers. The co-managers include Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co., and J.P. Morgan Securities Inc.

Fannie Mae is a shareholder-owned company with a public mission. We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. In 2008, we mark our 70th year of service to America's housing market. Our job is to help those who house America.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of Fannie Mae. Nothing in this press release constitutes advice on the merits of buying or selling a particular investment. Any investment decision as to any purchase of securities referred to herein must be made solely on the basis of information contained in Fannie Mae's Offering Circular dated April 1,2008, and that no reliance may be placed on the completeness or accuracy of the information contained in this press release.

You should not deal in securities unless you understand their nature and the extent of your exposure to risk. You should be satisfied that they are suitable for you in the light of your circumstances and financial position. If you are in any doubt you should consult an appropriately qualified financial advisor.

Benchmark Notes is a registered mark of Fannie Mae. Unauthorized use of this mark is prohibited.

DATASOURCE: Fannie Mae