Bill Ackman is suing the Federal Government over the Fannie Mae and Freddie Mac bailout terms.
It is clear that the US Government will make a profit over that bailout and yet they are still suspending payment on Fannie Mae and Freddie Mac preferred securities. These securities are potentially money good.
Long-time readers know that I purchased a lot of these securities from 0.7c to 2 cents in the dollar - and I wrote a ten part blog series on this purchase. 100 cents in the dollar would be quite fine.
Bill is late to the trade - but in all sincerity I wish him well.
For the record here is my ten part series on Fannie and Freddie. I have cross checked the numbers that I guessed - some are high, some are low - but in the end it is roughly a wash. [Defaults are higher than I would have guessed, severity lower for instance...]
Part 1, Part II, Part III, Part IV, Part V, Part VI, Part VII, Part VIII, Part IX, Part X.
The series took a while because I broke my collarbone in the middle of it.
The content contained in this blog represents the opinions of Mr. Hempton. Mr. Hempton may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Hempton's recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.