Shares of Federal National Mortgage Assctn Fnni Me FNMA 6.67%and Federal Home Loan Mortgage Corp FMCC 7.15% are both up about 50 percent in the past two days following comments from Donald Trump’s recently-appointed Treasury Secretary Steven Mnuchin.
On Wednesday, Mnuchin confirmed his appointment to the position and said that Fannie Mae and Freddie Mac can’t continue to be owned by the government.
“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 some analysts have speculated that the Trump administration intends to allow the two government-sponsored enterprises (GSE) retain their profits and enter the private market. That could put Fannie and Freddie on the same path that student lender SML Corp SLM 5.47%took.
“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 SPY 1.31%.
Of course, the stock fell off a cliff during the financial crisis. In the past 10 years, Sallie Mae stock is…
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