The Fannie - Freddie Showdown

Vital Statistics:

	Last	Change	Percent
S&P Futures	1791.2	3.5	0.20%
Eurostoxx Index	3057.4	3.7	0.12%
Oil (WTI)	93.88	0.1	0.13%
LIBOR	0.238	0.000	-0.15%
US Dollar Index (DXY)	80.88	-0.141	-0.17%
10 Year Govt Bond Yield	2.70%	0.01%
Current Coupon Ginnie Mae TBA	105.7	-0.2
Current Coupon Fannie Mae TBA	104.6	-0.1
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.34

Markets are higher on no real news. Bonds and MBS are down small. 

The Empire Manufacturing Survey came in lower than expected and import prices fell. Industrial Production and Capacity Utilization fell.

Bill Ackman has taken a 10% stake in Fannie Mae and Freddie Mac and may seek talks. This comes on the back of Fairholme's bid to buy the insurance units of Fan and Fred. Fairholme's bid would probably be denied by the government. Many in the financial community view the government's changing the terms of the bailout just as Fannie and Fred became profitable as dirty pool. The government owns 80% of Fannie Mae and Freddie Mac's stock and doesn't have to do anything it doesn't want to, but it certainly cannot relish the thought of dueling in the press with guys like Ackman, Pauson, and Berkowitz. 

Housing affordability fell in the third quarter as prices rose and interest rates increased, according to the NAHB.

Janet Yellen's testimony was pretty much as predicted. She is a dove. Reading the tea leaves, however it appears she is in no rush to begin tapering. Punch line:  I don't know how you could have come out of that meeting thinking "I gotta short some bonds, right here." Here is my longer take on it from yesterday:  http://thenadtearsheet.blogspot.com/2013/11/janet-yellen-data-dump_14.html 

Brent Nyitray, CFA

Director of Capital Markets

iDirect Home Loans

National Asset Direct

Dellacamera Capital Management

1010 Washington Blvd, 6th Floor

Stamford, CT 06901

203-817-3614 (w)

917-841-4938 (c)