 |
|
|
|||||
President Donald Trump’s media company said Tuesday that institutional investors will buy $2.5 billion in the company’s stock with the proceeds going to build up a bitcoin reserve. About 50 institutional investors will put up $1.5 billion in the private placement for common shares in the company and another $1 billion for convertible senior notes, according to Trump Media and Technology Group, the operator of Truth Social and other companies. Trump Media said it intends to use the proceeds for the creation of a bitcoin treasury. This investment will help defend our Company against harassment and discrimination by financial institutions, which plague many Americans and U.S. firms,” said Trump Media CEO and Chairman Devin Nunes in prepared remarks. Shares of Trump Media & Technology Group Corp., based in Sarasota, Fla., tumbled 9% Other companies have adopted similar strategies through cryptocurrency. Cloud and mobile software developer MicroStrategy Inc. has built up a treasury reserve containing billions worth of bitcoin through stock sales and debt financing. Trump, who referred to cryptocurrencies in his first term as not money, citing volatility and a value “based on thin air,” has shifted his views on the technology. During an event at his Mar-a-Lago club in Florida during his presidential campaign in May 2024, Trump received assurances that crypto industry backers would spend lavishly to get him reelected. Last week, Trump rewarded 220 of the top investors in one of his other cryptocurrency projects the $Trump meme coin with a swanky dinner luxury golf club in Northern Virginia, spurring accusations that the president was mixing his duties in the White House with personal profit.
Category:
E-Commerce
Want more housing market stories from Lance Lamberts ResiClub in your inbox? Subscribe to the ResiClub newsletter. Fannie Mae and Freddie Mac support the mortgage industry by buying mortgages from lenders and selling mortgage-backed securities to investors. They were placed into conservatorship by the Federal Housing Finance Agency (FHFA) in September 2008 after suffering massive losses during the housing crash, threatening the stability of the U.S. financial system. The U.S. Treasury provided a bailout to keep them afloat, and they have remained under government control ever sincedespite returning to profitability. While the U.S. Treasury owns the majority of Fannie Mae and Freddie Mac profits through senior preferred stock agreements, the common and preferred shares that existed before conservatorship were never fully wiped out. Once Wall Street realized Donald Trump had won the 2024 election, the stocks of Fannie Mae and Freddie Mac spiked as the market priced in higher odds that the second Trump administration would attempt to end that conservatorship. After all, one of Trumps biggest backers this cycle was Bill Ackman, a leading proponent of releasing Fannie Mae and Freddie Mac from conservatorship. The odds of conservatorship endingor at the very least, an attempt to unwind itincreased this week after Trump posted on social media: Im giving very serious consideration to bringing Fannie Mae and Freddie Mac public. Then, on Thursday evening, Bill Pulte, the director of FHFA, tweeted out a podcast he did with Donald Trump Jr. centered on the future of Fannie Mae and Freddie Mac. Those arent the kind of public moves the administration would make unless it is seriously considering a push to end conservatorship or wants to further test financial market reaction to the idea. What would this do to mortgage rates? The reason housing stakeholders should pay attention is the long standing concern that ending conservatorship could put upward pressure on mortgage rates and more strain on housing affordability. Once released, Fannie Mae and Freddie Mac could need to hold more capital to absorb losses. To build and maintain that capital, they may need to increase guarantee fees charged to lenders. In addition, upon release, unless there’s an explicit guarantee or backstop from Congress, investors may demand higher returns to account for increased risk. Those concerns are real enough that back in February, Treasury Secretary Scott Bessent said that Freddie Mac and Fannie Mae wouldnt get released from conservatorship if doing so put upward pressure on mortgage rates/mortgage spreads. The priority for a Fannie and Freddie release, the most important metric that Im looking at is any study or hint that mortgage rates would go up. Anything that is done around a safe and sound release [of Fannie Mae and Freddie Mac] is going to hinge on the effect of long-term mortgage rates, Bessent said in February. On Friday, Bessent reaffirmed in an interview with Bloomberg that the privatization of Fannie Mae and Freddie Mac hinges on mortgage rates, saying: It [privatization of Fannie and Freddie] is a goal for this administration. Again, we’re doing peace deals, tax deals, and trade deals. As we land some of those deals then we will focus on that [privatization of Fannie and Freddie]. But what I can tell you is that we are doing a great deal of studying at Treasury because the one requirement for this privatization is that they are privatized in such a way that mortgage spreads do not widen. To understand how mortgage rates could respond in different Freddie Mac/Fannie Mae release scenarios, read this housing research we published earlier this year.
Category:
E-Commerce
Americans views of the economy improved in May after five straight months of declines sent consumer confidence to its lowest level since the onset of the COVID-19 pandemic, largely driven by anxiety over the impact of President Donald Trumps tariffs. The Conference Board said Tuesday that its consumer confidence index rose 12.3 points in May to 98, up from Aprils 85.7, its lowest reading since May 2020. A measure of Americans short-term expectations for their income, business conditions and the job market jumped 17.4 points to 72.8, but remained below 80, which can signal a recession ahead. The proportion of consumers surveyed saying they think a U.S. recession is coming in the next 12 months also declined from April. Trumps aggressive and unpredictable policies including massive import taxes have clouded the outlook for the economy and the job market, raising fears that the American economy is headed toward a recession. However, Trump’s tariff pullbacks, pauses and negotiations with some trading partners may have calmed nerves for the time being. “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards, said Stephanie Guichard, senior economist at The Conference Board. Trump had initially imposed a stunning 145% tariff on most goods from China, but agreed to a 90-day pause for negotiations. The U.S. also came to an agreement with the U.K. earlier in May. Over the Memorial Day holiday weekend, Trump and European Union leaders announced that the president’s 50% tariff on imports from the E.U., which he announced Friday, are on hold until July 9. That announcement would not have impacted the Board’s survey, which closed on May 19. The Conference Board said the rebound in confidence this month was broad-based across all ages and income groups. Consumers assessments of the present economic situation also improved, with the exception of their view on job availability, which weakened for the fifth straight month despite another strong U.S. jobs report. However, less than 25% of respondents said they were worried about losing their jobs, compared with the 50% of respondents who said they were concerned about not being able to buy the things they need or want. The Labor Department earlier this month reported that U.S. employers added a surprising 177,000 jobs in April and the unemployment rate remained at a low 4.2%. Write-in responses to the survey showed that tariffs are still consumers biggest concern. Inflation is also still weighing on their minds, though some noted that inflation seemed to be easing, along with gas prices. Earlier in May, the Commerce Department reported that consumer prices rose just 2.3% in March from a year earlier, down from 2.7% in February. Excluding the volatile food and energy categories, core prices rose 2.6% compared with a year ago, below Februarys 3%. Economists track core prices because they typically provide a better read on where inflation is headed. Gas prices have hovered around $3.17 per gallon this month, down from $3.59 a year ago, but up a few pennies from April. The slowdown in inflation could be a temporary respite until the widespread duties imposed by Trump begin to push up prices in many categories. Most economists expect inflation to start ticking up in the coming months. Robert Frick, an economist with Navy Federal Credit Union, said that while the tariff rollbacks may have boosted Americans’ confidence this month, that optimism may be fleeting. When prices start rising from existing tariffs in a month or two, it will be a sobering reminder that a new inflation fight has just begun, Frick said. The Board’s survey Tuesday also showed that Americans’ plans to spend on homes, cars and vacations also increased from April, with significant gains coming after the May 12 China tariff pause. Matt Ott, AP business writer
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||