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Trump wants to change Fannie Mae and Freddie Mac and insider traders made a bundle last night [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2025-05-22
Fannie Mae has been in business since 1938. Freddie Mac was created in 1970 to help build up the secondary mortgage market.
Fannie Mae has been publicly traded since 1968. Freddie Mac has been publically traded since 1989.
Freddie Mac buys up mortgages, bundles them up and creates mortgage backed securities that it sells on the open market.
What in the world is Trump talking about? How public do they need to be?
"I'm very serious consideration to taking Fannie Mae and Freddie Mac public."
He's going to be talking to the right people involved. The Federal Housing Finance Agency runs both Fannie Mae and Freddie Mac.
The Director of FHFA is William Pulte, whose family has been in housing construction, but nothing to prepare him for the job he's been given. He's just another Trump flunky.
"... among others, and will be making a decision in the near future."
Why is this even being talked about?. What is the purpose of this change in the system that is run so smoothly for so many years, except for the 2008 sub-prime mortgage crisis that hit everybody?
"Fannie Mae and Freddie Mac are doing well, throwing off a lot of CASH, and the time would seem to be right. Stay tuned!"
So, I had to go and look up what throwing off a lot of cash meant. "The resulting amount when annual debt service is subtracted from net operating income."
I think it means that they could be making more loans and they're operating well.
Still confusing is that Fannie Mae went public 50 years ago, and Freddie Mac 35 years ago. So, what is Trump talking about?
Fannie Mae and Freddie Mac were victims of the sub-prime mortgage crisis in 2008 and were placed under conservatorship of the Federal Housing Finance Agency to keep them afloat and allow them to restructure and return to self management. As of 2024, they had paid off their Treasury loans and were purposefully building up capital reserves to exit the conservatorship.
So, according to Trump, they're ready to exit. It would seem that should be the next step.
On the news Trump made, Fannie Mae's (FNMA) stock shot up 40% in overnight trading. Freddie Mac (FMCC) shot up 50% in overnight trading. Anybody who had advance knowledge of this made a bundle. That should be part of the news cycle.
I don't profess to know about their financial operations. But what Trump is talking about makes no sense to me. Both are publically traded companies. How can they go public a second time?
Make that 60% on Freddie Mac. It went up 10% while I was writing this and the markets just opened minutes ago.
We will get some sort of explanation from people who understand this better and what the "public" part means and why their stocks shot up so much on the news.
The second story is who knew about it ahead of time.
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Update:
On Freddie Mac, there more than the common stock
There's also Fixed-to-floating Preferred Stock Offering - FMCKJ
Preferred Stock Offering - FMCKI
6.02% Preferred Stock Offering - FMCKL
There's way too many, here's the whole list.
There also a bunch of Fannie Mae stocks, but without stock tickers.
They have an investor website called Computershare that handles other than the common stock FNMA.
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