Investors Unite

Buy These "Without Limit"

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December 28, 2014 at 6:54 pm #3527
dpsims
Participant
What would you say if I told you to buy an investment “without limit” and with no concern for “safety and soundness limitations”? What if the U.S. Treasury told you this?

In 2002, Treasury told banks that they may invest in perpetual preferred stock issued by Fannie Mae and Freddie Mac without limit, subject to safety and soundness considerations.

https://www.aba.com/aba/pdf/gr/FannieFreddieStockIncentives.pdf

Here’s the letter.

http://www.occ.gov/static/interpretations-and-precedents/apr02/int931.pdf

Seems like an implied guarantee on these securities.
- This topic was modified 1 month ago by dpsims.
- This topic was modified 1 month ago by dpsims.
December 28, 2014 at 10:40 pm #3530
catbirdseat
Participant
Thanks for bringing these up. These letters are the reason I bought without limit in my retirement accounts the preferred shares after delisting in 2010. The Treasury made a promise to shareholders. I now hold common mostly, but I think preferred deserve to have their dividends restored.
- This reply was modified 1 month ago by catbirdseat.
December 29, 2014 at 1:30 pm #3537

dpsims
Participant

I just recorded a video on this.

https://www.youtube.com/watch?v=6APLPDKs8yo&feature=youtu.be&a

December 30, 2014 at 4:54 am #3547

inthetube
Participant

David, shouldn’t that be 2012 instead of 2002?

December 30, 2014 at 8:41 am #3550

dpsims
Participant

Nope. In 2002, Treasury’s OCC told banks to buy the preferred stock without limit. They were able to hold these as assets, when other forms of equity were banned.

Then, Treasury suspended dividends.

If you want to really start the conspiracy theories, look at which companies bought distressed assets after the dividends were suspended. Some of them had ties to Bush and Paulson.

December 30, 2014 at 9:11 am #3556

Frank Fosco
Participant

Well they did this on preferred shares as well right before CONSERVATORSHIP. We should point that out as well. What is nuts is we can not get a current shareholder list.
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