Rafferty Capital's Bove Notes 'Potential Game Changer' for Fannie Mae (FNMA)
While Rafferty Capital's Dick Bove is no longer recommending Fannie Mae (OTC: FNMA) stock, he highlighted a couple positive developments which could be a "potential game changer."
First, he notes that Jason Chaffetz (R.; UT) introduced a new bill H.R. 1694 which basically requires Fannie Mae to open its books to the public under the Freedom of Information Act. Bove notes while similar bill introduced before but they have died without a ripple in Congress. However, this bill comes from the Chairman of the House Oversight and Government Reform Committee. Chaffetz is a Republican in a Republican controlled House. (Bove doesn't mention that Chaffetz said he may resign in the coming months).
Bove believes if this bill becomes law it could be very damaging to the Democrats. "It could ascertain if the plaintiffs in the many Fannie Mae lawsuits are correct in claiming that the government has lied to the public from Day One when it took this company away from its shareholders without compensation," Bove commented. "It may also result in shining a spotlight on the many courts who have opined that the government has the right to do whatever it chooses and that holders of private property have no rights."
Unrelated to the bill, Bove also highlighted that Celeste Brown has left her position as Treasurer of Morgan Stanley to become Deputy CFO at Fannie Mae. Commenting on why a rising star at Morgan Stanley would leave to join a company on the verge of being eliminated, he said: "My belief is that she would not do this unless she were given assurances that there was a bright future for her at Fannie Mae. Ms. Brown is special. She is unlikely to sidetrack her career to become a government employee dead set in the middle of “the swamp.”