Re: [CANSLIM] FRE and FNM

From: "Tom Worley" <stkguru@bellsouth.net>
Subject: Re: [CANSLIM] FRE and FNM
Date: Mon, 15 Apr 2002 00:35:03 -0400
Next Article (by Subject): Re: [CANSLIM] Non-touting V.V. message John Lessnau
Previous Article (by Subject): [CANSLIM] FNM earnings, credit losses "Tom Worley"
Articles sorted by: [Date] [Author] [Subject]
This is a multi-part message in MIME format.

- ------=_NextPart_000_028A_01C1E415.62575020
Content-Type: text/plain;
	charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable

Charley, I have not read the Barron's article, frankly I would not line =
the bird cage with Barron's, no bird deserves such abuse.  But if you =
understand how Fannie Mae and Freddie Mac and the other lesser govt =
agencies work, then the extent of their debt is only reflective of the =
level of new mortgages being issued by banks and S&Ls. It is all =
collateralized against physical real estate.

To date, the level of bankruptcies (trust me, I follow this closely =
because of my continued and renewed investment in EPIQ) does not show me =
a problem with a higher than tolerable rate of default on home =
mortgages, suggesting that the banks continue to follow valid credit =
criteria. And FRE / FNM only buy the best of the bank loans, which =
restricts the banks even lending on marginal properties. Most banks will =
not even do "fixer up" type loans, because they cannot resell the loans =
to a govt agency.

The biggest problem, and the source I suspect of these continued rumors, =
comes about because the govt agencies are getting a lot of loans paid =
off, thus paying off principal and reducing the principal on which they =
continue to pay above market interest rates.

Tom Worley
stkguru@bellsouth.net
AIM: TexWorley
- ----- Original Message -----=20
From: Chazmoore@aol.com=20
To: canslim@lists.xmission.com=20
Sent: Sunday, April 14, 2002 9:26 PM
Subject: [CANSLIM] FRE and FNM


Since M is such an important part of CANSLIM, did anyone read the =
Barron's article on homebuilding, or perhaps hear Roger Arnold's radio =
broadcast about the over extension of Freddie M and Fanni M? These two =
quasi-governmental agencies now carry more debt than the US Treasury. =
Arnold suggests the boom in homebuilding over the past year or so is =
attributed to FRE and FNM loose mortgage requirements. Further, if there =
is a slowdown in mortgage demand, these two agencies could be in =
trouble.=20
I am no expert in this field but it reminds me of the Savings and Loan =
problem of the 1980s. Any comments from anyone who knows this industry?=20
Charley=20

- ------=_NextPart_000_028A_01C1E415.62575020
Content-Type: text/html;
	charset="iso-8859-1"
Content-Transfer-Encoding: quoted-printable

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META http-equiv=3DContent-Type content=3D"text/html; =
charset=3Diso-8859-1">
<META content=3D"MSHTML 6.00.2715.400" name=3DGENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY bgColor=3D#ffffff>
<DIV><FONT face=3DArial>Charley, I have not read the Barron's article, =
frankly I=20
would not line the bird cage with Barron's, no bird deserves such =
abuse.&nbsp;=20
But if you understand how Fannie Mae and Freddie Mac and the other =
lesser govt=20
agencies work, then the extent of their debt is only reflective of the =
level of=20
new mortgages being issued by banks and S&amp;Ls. It is all =
collateralized=20
against physical real estate.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>To date, the level of bankruptcies (trust me, I =
follow=20
this closely because of my continued and renewed&nbsp;investment in =
EPIQ) does=20
not show me a problem with a higher than tolerable rate of default on =
home=20
mortgages, suggesting that the banks continue to follow valid credit =
criteria.=20
And FRE / FNM only buy the best of the bank loans, which restricts the =
banks=20
even lending on marginal properties. Most banks will not even do "fixer =
up" type=20
loans, because they cannot resell the loans to a govt =
agency.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV><FONT face=3DArial>The biggest problem, and the source I suspect of =
these=20
continued rumors, comes about because the govt agencies are getting a =
lot of=20
loans paid off, thus paying off principal and reducing the principal on =
which=20
they continue to pay above market interest rates.</FONT></DIV>
<DIV><FONT face=3DArial></FONT>&nbsp;</DIV>
<DIV>Tom Worley<BR><A=20
href=3D"mailto:stkguru@bellsouth.net">stkguru@bellsouth.net</A><BR>AIM:=20
TexWorley</DIV>
<DIV style=3D"FONT: 10pt arial">----- Original Message -----=20
<DIV style=3D"BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A=20
title=3DChazmoore@aol.com =
href=3D"mailto:Chazmoore@aol.com">Chazmoore@aol.com</A>=20
</DIV>
<DIV><B>To:</B> <A title=3Dcanslim@lists.xmission.com=20
href=3D"mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A>=
 </DIV>
<DIV><B>Sent:</B> Sunday, April 14, 2002 9:26 PM</DIV>
<DIV><B>Subject:</B> [CANSLIM] FRE and FNM</DIV></DIV>
<DIV><BR></DIV><FONT face=3Darial,helvetica><FONT size=3D2>Since M is =
such an=20
important part of CANSLIM, did anyone read the Barron's article on =
homebuilding,=20
or perhaps hear Roger Arnold's radio broadcast about the over extension =
of=20
Freddie M and Fanni M? These two quasi-governmental agencies now carry =
more debt=20
than the US Treasury. Arnold suggests the boom in homebuilding over the =
past=20
year or so is attributed to FRE and FNM loose mortgage requirements. =
Further, if=20
there is a slowdown in mortgage demand, these two agencies could be in =
trouble.=20
<BR>I am no expert in this field but it reminds me of the Savings and =
Loan=20
problem of the 1980s. Any comments from anyone who knows this industry?=20
<BR>Charley</FONT> </FONT></BODY></HTML>

- ------=_NextPart_000_028A_01C1E415.62575020--



- -
- -To subscribe/unsubscribe, email "majordomo@xmission.com"
- -In the email body, write "subscribe canslim" or
- -"unsubscribe canslim".  Do not use quotes in your email.
Go to Jeff Salisbury LWGate Home Page.