Sunday, August 17, 2014
My sincere best wishes to Bill Ackman: Fannie Mae and Freddie Mac edition
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.
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