FYI: Fannie Mae and Freddie Mac shares took a nosedive Tuesday following a federal appeals court decision to stay a previous ruling that disallows investors from suing the U.S. government. The cases alleged that the government (taxpayers) illegally seized billions of dollars from the mortgage giants. Teresa Rivas reported on it Tuesday.
Over-the-counter shares of Fannie (FNMA) and Freddie (FMCC) slid 34.7% and 38.1%, respectively. Preferred shares were down similarly.
Call it a hitch – hedge funds and other distressed asset investors, who snapped up shares for pennies on the dollar expecting to get paid back won’t go quietly. Bill Ackman’s Pershing Square Capital Management is a major holder of common shares; Perry Capital and Bruce Berkowitz’ Fairholme Funds are major owners of the preferred shares.
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2017/02/22/fannie-and-freddie-took-a-big-fall-will-bruce-berkowitz-fairholme-come-tumbling-after/tab/print/
Comments
As of 11/30/2016, Freddie and Fannie were 35% of FAIRX portfolio.
These managers took huge bets.
Derf
M* Still has no clue. Shows down 2.83 today. Like Yesterday never happened. BUT YTD it shows it is still 12% up.
Why only FAIRX has this problem on M*. I think M* is waiting to publish a seriously negative comment on FAIRX. They were in love with SEQUX and still are. I think they have had a falling out with Berkowitz especially after they published their analysis. Berko is not happy, and even expressed in last conference call "5 years back M* thought I was great...." etc.
Anyways, like I said, I'm in Vegas and playing with the house's money. So I'm taking a chill pill.