Shares of Federal National Mortgage Assctn Fnni Me
On Wednesday, Mnuchin confirmed his appointment to the position and said that
“We will make sure that when they are restructured, they are absolutely safe and don’t get taken over again,” Mnuchin said. “But we’ve got to get them out of government control.”
Mnuchin didn’t provide details about the game plan for Fannie and Freddie, but
“Sallie Mae” also started as a GSE, but shareholders voted to cut ties with the government back in 1997. In the 10 years that followed, Sallie Mae stock skyrocketed more than 244 percent, more than four times the return of the SPDR S&P 500 ETF Trust
Of course, the stock fell off a cliff during the financial crisis. In the past 10 years, Sallie Mae stock is down 36.5 percent, while the SPY is up 56.6 percent.
Fannie and Freddie would certainly be fine with a repeat of the first 10 years of the Sallie Mae privatization story. However, until Trump and Mnuchin reveal more details about their plan of attack for the GSEs, there’s no way to know whether or not the stocks hold any value at all.
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