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Earnings highlights: Cisco, Ford, Humana, MasterCard, Starbucks, Toyota ...

Here are some highlights from last week's earnings coverage from BloggingStocks:

Continue reading Earnings highlights: Cisco, Ford, Humana, MasterCard, Starbucks, Toyota ...

Fannie Mae will rent to owners in foreclosure

Fannie Mae (NYSE: FNM) has initiated a new Deed to Lease program in which homeowners facing foreclosure will be able to stay in their homes as renters.

During the first half of the year, Fannie Mae has acquired 57,000 homes through foreclosure. These are owners who do not qualify for mortgage restructuring. They must demonstrate that they could not pay their mortgage but can pay rent. The rents paid are lower than their previous mortgage payment.

Continue reading Fannie Mae will rent to owners in foreclosure

Fannie Mae, Freddie Mac plunge on MBA's proposed overhaul

If you're wondering why Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) have been bombarded by selling pressure today, look no further than this Wall Street Journal article (subscription required). The newspaper reports that the Mortgage Bankers Association (MBA) is pushing for the government to split up Fannie and Freddie "into several smaller privately held companies that would issue mortgage related securities carrying an explicit government guarantee."

Under the terms of the proposal, Fannie and Freddie's offspring would no longer be permitted to sit on massive mortgage portfolios. Additionally, all mortgage-backed securities created by the duo would be backed by a federal insurance fund, replacing the rather abstract implied government guarantee that's currently in place.

Continue reading Fannie Mae, Freddie Mac plunge on MBA's proposed overhaul

Cramer on BloggingStocks: Reasonable speculation

TheStreet.com's Jim Cramer says the bizarre rules these days make it worth looking at stocks through a different lens.

How much should we care about low-dollar speculation? How much should we care about the incessant trading in CIT (NYSE: CIT) (Cramer's Take) and Fannie Mae (NYSE: FNM) (Cramer's Take), Alcatel-Lucent (NYSE: ALU) (Cramer's Take), or Vonage (NYSE: VG) (Cramer's Take) and Sprint (NYSE: S) (Cramer's Take)? Or even Citigroup (NYSE: C) (Cramer's Take)?

First, I have to tell you that I worry about it less than I used to. Why? Because when we used to have rules and government officials that were willing to speak the truth about stocks, we wouldn't have these single-digit players out there every day. But without it, how in heck can people not believe that Fannie and Freddie Mac (NYSE: FRE) (Cramer's Take) are the biggest and best bets on a turn in housing?

Continue reading Cramer on BloggingStocks: Reasonable speculation

Options Update: Fannie Mae and Freddie Mac volume and volatility suggests movement

Fannie Mae (NYSE: FNM) closed at $1.86. FNM option volume was active on August 25 with 173,103 contracts trading. FNM overall option implied volatility is at 151.

Freddie Mac (NYSE: FRE) closed at $2.06. FRE option volume was active on August 25 with 53,469 contracts trading. FRE overall option implied volatility of 139 is near its four-month average of 138, according to Track Data.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

White House wants to split assets of Freddie and Fannie

The government is in another pickle. Last September, Freddie and Fannie were effectively nationalized when the Fed stepped in and promised to buy $100 billion of preferred shares in each company and created warrants effectively diluting existing shareholder holdings.

Now the government finds that they have taken on a mountain of debt and wants out of this mess. According to the Washington Post, talks are underway to split the assets of the two companies along the lines of good bank/bad bank.

Continue reading White House wants to split assets of Freddie and Fannie

Barney Frank encourages Fannie, Freddie to relax lending standards

Outspoken congressman Barney Frank has no shortage of critics, and they're sure to be out in force today. This morning, The Wall Street Journal reported that the chairman of the House Financial Services Committee, along with his colleague Anthony Weiner, is actually recommending that Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) relax their lending standards on condominiums.

The controversial request follows a decision by both Fannie and Freddie to tighten mortgage-lending standards for condos. In March, Fannie said it would no longer guarantee mortgages on condos in buildings where fewer than 70% of units have been rented, up from its previous benchmark of 51%. Freddie is due to implement similar measures in July. In a letter to the CEOs of both mortgage lenders, Reps. Frank and Weiner expressed their concerns that the higher standard "may be too onerous," and asked the lenders to "make appropriate adjustments" to their approach.

Continue reading Barney Frank encourages Fannie, Freddie to relax lending standards

$12.9 trillion for economic recovery. Where is it?

Here is today's quiz. If you were given $1,000,000 to spend each day, how many days would it take you to spend $12.2 trillion dollars? You are probably wondering where the number $12.2 trillion came from? Well, this is the amount of money the government has committed for economic recovery.

Some of the monies can be accounted for but its still a big mystery where the rest went. So far we know this:

Continue reading $12.9 trillion for economic recovery. Where is it?

The 'big picture' of our economy

In celebration of Barry Ritholtz's critically-acclaimed new book Bailout Nation, he held The Big Picture Conference, which I was fortunate to attend.

Here are the main points from the most reputable speakers, Congressman Alan Grayson, Nassim Taleb, Doug Kass, and Josh Rosner.

Florida Congressman Alan Grayson discussed how systemic risk is an excuse for socialism and that interconnectedness is the main reason that these institutions are "too big to fail." In fact, these institutions no longer hold social or economic purpose, they are simply too big to exist.

Continue reading The 'big picture' of our economy

Should we say goodbye to Fannie and Freddie?

Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) have similar purposes but different structures. Fannie Mae was founded in 1938 during the Great Depression for the purpose of purchasing and securitizing mortgages to keep funds flowing to institutions that lend money to home buyers. In 1968, the government converted Fannie into a private shareholder-owned corporation. Freddie Mac, on the other hand, was created in 1970 as a government-sponsored enterprise to expand the market for secondary mortgages in the US.

In September 2008, the Federal Housing Finance Agency (FHFA) director James B Lockhart announced that Fannie and Freddie would be placed under the conservatorship of FHFA.

Continue reading Should we say goodbye to Fannie and Freddie?

Closing Bell: Set up profit taking on news (CVX, DNDN, FNM, GS, JNJ)

Today was just a day of selling the news. We had weak retail sales and we had lower than expected PPI data showing no inflation. But after a 5-week straight rally, investors were selling into earnings despite many estimates looking excessively easy to hit.

Here are today's unofficial closing bell levels:

Dow 7,918.11 -139.70 (-1.73%)
S&P 500 841.87 -16.86 (-1.96%)
Nasdaq 1,626.40 -26.91 (-1.63%)

Top Analyst Upgrades
Top Analyst Downgrades

Continue reading Closing Bell: Set up profit taking on news (CVX, DNDN, FNM, GS, JNJ)

Fannie Mae, Freddie Mac planning massive retention bonuses

According to a report today in The Wall Street Journal [subscription required], Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) -- those twin titans of mortgage mayhem -- are planning to dish out $210 million worth of retention bonuses over the next 18 months. James Lockhart, director of the Federal Housing Finance Agency, explained that $51 million in payouts were distributed in late 2008, with the rest of the bonuses to be disbursed through 2009 and into early 2010.

The news is already raising politicians' ire, since Fannie and Freddie are staying afloat only through the grace of government bailouts. The two lenders reported combined losses of roughly $108 billion in 2008, says the Journal, yet 80% of Freddie's employees and 61% of Fannie's payroll will score retention bonuses based on this bleak operating performance.

Continue reading Fannie Mae, Freddie Mac planning massive retention bonuses

Fannie Mae next in line to hand out questionable bonuses

Who is ready for a second round of bonus outrage (dare I call it a "bonus" round)? This time it is Fannie Mae (NYSE: FNM) that has awarded retention bonuses to four of its top executives -- let's see how mad everyone gets about this one.

The mortgage company told the SEC in a recent filing that it is going to award bonuses between $470,000 to $611,000 to four of its top executives. As is the nature of a bonus, this payment is on top of the executives' already-hefty base pay.

Continue reading Fannie Mae next in line to hand out questionable bonuses

Federal Reserve buys bonds

There is an old saying: "never fight the Fed." If you had been short this bond market, you probably could be wiped out in one afternoon. When the Federal Reserve made its announcement a short time ago that they were buying long term securities the futures on the long bond jumped 4.25 basis points, or more that $4000.00 on just one contract. If you were long say 10 contracts you would be sitting on a $40,000 profit this afternoon.

Continue reading Federal Reserve buys bonds

What will nationalization mean?

This port was written by Minyanville contributor Minyan Peter.

I think the Government will try at all costs to create the impression that only a limited number of banks are going to be nationalized. To achieve this, Secretary Geithner has requested that the top 15-20 banks in the country undergo a stress test, where regulators will review banks' capital positions under a variety of economic scenarios. And, based on these reviews, those banks that fail will be given convertible preferred stock to boost their capital levels to some yet to be determined level.


Continue reading What will nationalization mean?

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IndexesChangePrice
DJIA+17.4610,023.42
NASDAQ+7.122,112.44
S&P 500+2.671,069.30

Last updated: November 08, 2009: 03:57 PM

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