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BNL Finance has covered Fannie Mae OTCMKTS: FNMA , Freddie Mac OTCMKTS: FMCC , and the prospects of GSE reform quite closely over the last few months. Here is why it is a good idea to maintain those positions headed into Previous Fannie Mae and Freddie Mac coverage here and here. First, it is a new era with Donald Trump as President and his Treasury secretary pick, Steven Mnuchin, both seeking GSE reform. Mnuchin previously said that dealing with Fannie Mae and Freddie Mac is a top 10 priority of the new administration.

Second, Mnuchin has leverage over conservative Republicans who want to keep their cash cow alive, or kill it altogether. House Financial Services Committee Chairman Jeb Hensarling R.

Read This Before You Buy Fannie Mae -- The Motley Fool

It was a positive investment for the government, but just like their bailout of General Motors Company NYSE: GM , the plan must be to exit the investment. With all things considered, there are many reasons to be bullish headed into However, it is important for FNMA stock or FMCC stock owners to realize the Treasury Department has warrants that give them rights to a FNMA stock and FMCC stock are nothing more than speculative bets on GSE reform, recapitalization, and a clean release from government conservatorship.

In other words, my belief is that investors like you and me will end up paying to recapitalize Fannie and Freddie as part of GSE reform. After all, there is no way in hell the government gives back money or lets Fannie and Freddie retain their earnings to create capital before ending government conservatorship. Still, looks like a year, more so than any other, where real progress will be made for Fannie Mae and Freddie Mac.

If that progress points in the direction of GSE reform, then FNMA stock and FMCC stock should continue to trade higher throughout the year as speculative bets on reform. However, investors must consider that , like all years post recession, will be volatile as Fannie Mae and Freddie Mac stock respond to every headline.

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Why Samsung Is A Better Investment Than Apple NASDAQ: Sony Corp ADR NYSE: What to expect when Big Blue reports earnings. Why Under Armour Inc NYSE: Why Selling FNMA Stock Or FMCC Stock In Is A Bad Idea Brian Nichols - January 2, BNL Finance has covered Fannie Mae OTCMKTS: Previous Fannie Mae and Freddie Mac coverage here and here First, it is a new era with Donald Trump as President and his Treasury secretary pick, Steven Mnuchin, both seeking GSE reform. How to invest in FNMA stock or FMCC stock?

This entry was posted in Stock Outlook , Financial , Hot Stocks , Members , Politics , Value Of The Month and tagged Fannie Mae , FMCC , FNMA , Freddie Mac. Follow any comments here with the RSS feed for this post.

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Why Fannie Mae (FNMA) Stock & Freddie Mac (FMCC) Stock Are Worth Buying After 35% Collapse

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