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Gasparino outlines Trump's plans for Fannie Mae, Freddie Mac - YouTube
Channel: Fox Business
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Wall Street is waiting with bated breath
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to see whether government-sponsored
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mortgage giants Fannie Mae and Freddie
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Mac go public right now they're propped
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up sponsored by the US government but
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their offerings if they were to go
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public could raise up to a hundred
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billion dollars but will it happen
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Charlie gasps Breno has more with the
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latest on our report last week touched
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off a frenzy on on the street among
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hedge funds and we hear hedge funds
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today have been following up on on our
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reporting which is essentially this that
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JP Morgan held a meeting in its offices
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earlier in the week and basically said
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here's what the reform plan may look
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like so now everybody is meeting and
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listen here's the thing Liz we don't
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know exactly what they're gonna do we do
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know that Treasury's putting the final
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touches on a plan to do something
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possibly to release them and as private
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companies yeah sometime this year or
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early next year we do know that they
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want to stop the network sweet the net
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worth sweep which is taking all the
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profits from Fannie and Freddie which
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they've been doing since I think about
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2010 so we know they want to
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recapitalize them now the real question
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is do they do a public offering and I
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could tell you the street is gearing up
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I mean JPMorgan held that meeting
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apparently Treasury has reached out to
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various firms Goldman Sachs JP Morgan I
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think Morgan Stanley to talk about how
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this thing might look so we're in the
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pre IPO stage that doesn't mean it's
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gonna happen the one thing I think that
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people are getting a little over at
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optimistic and where the stock is up a
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little bit today on some of our
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reporting which I do I got picked up by
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some trades the real problem is are they
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gonna reform something this crazy
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I mean remember 90% of the thirty-year
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mortgage market is controlled by Fannie
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and Freddie they buy this they buy the
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mortgages off the balance sheets of the
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banks without Fannie and Freddie
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functioning you know you know in a real
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way you're not gonna have 30-year
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mortgages because the margins are too
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thin for the bank for the banks so but
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people like xxx or Moses just like they
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like their deposit insurance and
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everything else so do they want to roll
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the dice on this thing because any
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reform will be a roll of the dice are
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they going to do that in the in an
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election year and I'm telling you that
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it that's where rubber meets the road
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thing and I'll tell you is the people I
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speak to that seem to know about what's
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going on are mixed have them say that
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mark Calabria ahead of FHFA Steve
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minuchin head of the Treasury Department
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want get want to get the Fannie and
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Freddie out from the government's
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auspices put them out as private
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companies as private as they can be and
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let this to let the private sector deal
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with it in a more in a more cohesive way
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than they're doing it on the
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anticipation though you know some of our
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viewers are thinking should I should I
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get two dollars and change and I know
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you don't advise because you are just a
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country reporter I'm sorry simple
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country reporter underscore simple I
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thought we were just ink-stained
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wretches but you know it's one of the
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other right but they might want to be
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playing the possibility okay so let me
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give you the other side the story half
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half the people think they're gonna
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recapitalize it and that's good for the
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preferred shareholders it might not be
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good for the common shareholders the
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other half think they may recapitalize
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it but not release it this year
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I think listen if you're if you you
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gotta be to buy this to common stock you
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have to treat it as a complete roll the
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dice because even if they've recap it
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you might get diluted right dilution
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when you sell more more more the same
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thing which would be stock you get
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diluted so that's a problem on the other
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hand if you can get your hands on the
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preferred they may do even they do
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better because they're higher up in the
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capital structure speaking of higher up
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the dow is now getting higher up it was
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about up about six nine points came into
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the hour yeah I saw your your interview
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with the with the agriculture guy Tom
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Kankakee what's interesting about that
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and I again people some people think the
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trade deal is priced into the market
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well today is perf it is that it isn't
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okay I don't think it well listen I'm my
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sources aren't the all of Wall Street
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but they're smart enough to know where
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where markets go they think there's more
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if he gets a trade deal and yes and he
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beat the hell out of the feds not to
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raise rates you know Macarena right
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dancing the Macarena I don't know I know
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I hate giving people advice you know but
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I'm just telling you it sounds logical
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that we got a little got a little more
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there's always that cell on the news
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charlie right all right we'll be
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watching it thank you very much from
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Monsieur gasping no
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