rros

I am sorry. I think you are fooling yourself. Stegman is, has been and will always be enemy #1. Or #2. Read more carefully: Taxpayers claims are the Sr. preferred shares. This is why they speak of a period of suspension for the dividends. The essential purpose of this is to block any cascading to the Jrs. Not even being cleverly disguised. As said, they are trying to hijack administrative reform and block shareholders from benefiting in any possible way.

lol. Stegman is now making administrative reform his battlefield. I do not see this as "on board". More likely, an attempt to infiltrate and maneuver away from the real administrative reform we want. The only good news is that this confirms legislative reform is 100% dead.

And on that note, here is my first (or third) useless comment for 2019. Can you all imagine the NWS on the hands of new congresswoman Ocasio-Cortes when she is ready to run for President? Or even as congresswoman trying to crystallize it into law? Maybe even as an amendment to our Constitution as a tool for redistribution? /Comment not to be construed as misogynist./ Not too long ago Hillary wanted to impose a special tax on XOM for their excess profits.

Thank you for clarifying, Chris.

Thank you for the update, Midas. https://www.forexlive.com/news/!/trump-said-to-consider-declaring-emergency-for-wall-funding-20190104 This is why I think the warrants for the wall may be easier said than done. But I do not really know the legalities here...

No new posts... So I imagine everybody sold.

The entire article in one line: we can't get past planning stage. lol. Thank you for posting it.

FWIW Just inner thoughts so skip if you'd like. The recent Fed/Trump conflict may play in our favor, to some extent. As confidence in the Fed continues to wane, Treasury may feel the impact. Treasury *is* the #1 bond seller in the planet. Mnuchin may suddenly find the market has an oversupply problem. Lack of demand from central banks who now may be more reluctant to fund Treasury's own ever increasing needs (deficit) may just be what markets do not need: higher interest rates. A volatile 1Q19 may be enough of an incentive for Mnuchin to speed up whatever he has in mind. J. Powell falling in disgrace, who heavily promoted splitting Fannie and Freddie, may become the latest bonus.

This covert hit piece trying to spread hatred against hedge funds, written in haste in the middle of the night, may just be a little too late. Calabria and Otting nominations/designations are strong indicators that a plan has been carved out. Perhaps not completely, but a clear roadmap. And the addition of Mulvaney as chief of staff only solidifies that sentiment. While we -neither Bloomberg, still do not know what will happen or if there is any light at the end of the tunnel the latest moves by the administration show clear intent.

Here are some of his articles. https://www.americanbanker.com/author/joseph-otting

Thank you. Good Christmas present. Thank you, Mr. Presidente.

This makes it sound like there were things Mnuchin wanted but Watt stonewalled. I suppose we will soon see what those are, because ostensibly Calabria will be on board with what Mnuchin wants, otherwise Trump would not have picked him. Still, since Calabria has written that the GSEs could survive receivership, then it can be seen to conform to TINA. What is receivership if not a restructuring? One that keeps taxpayers safe because the funding commitment would not transfer to the LLREs. I think the price action has much less to do with what Mnuchin said, because he has said the same thing many times before, and much more about the visibility of Bloomberg. Let's not forget Calabria will have 5 full years to work on the companies, through many different Congresses. The immediate needs are capital and taxpayers' protection.

Ah... that was the spark at 3:15pm on all shares.

I am of a different view here. The 100 +/- billion/warrants are actually taxpayers' money. Meaning, it is everybody's money. It might be misguided to use this for something that has become so contentious and is not even fully supported by one party, let alone both. Even if it somehow falls within the national security universe... Truth is this is only Trump's idea and it might be a mistake to act as if the money belongs to him. While if he gets funding from Congress he tacitly gets everybody on board.

Thanks. While in Congress, he wrote a bill specifically declaring the Srs. paid off. If someone had told me 2 years ago that Mulvaney would become the closest guy to the President of the US and that Calabria might become the head of FHFA I would have instantly peed on myself. Exactly, Wiggins. We should now spread the rumor that with Mulvaney on board it is 100% certain Calabria -if confirmed- will go the receivership way. The likes of which this world has never seen before, as Trump would put it. After all, Mulvaney's scotch was a little too stiff the night he wrote the bill declaring the Srs. paid, allowing for earnings retention and recapitalizing the companies. What was he thinking?

Thanks. While in Congress, he wrote a bill specifically declaring the Srs. paid off. If someone had told me 2 years ago that Mulvaney would become the closest guy to the President of the US and that Calabria might become the head of FHFA I would have instantly peed on myself.

Perhaps I am overreacting here, but there might be a hidden bombshell in the footnote on page 8. This is to refute the prospect that Treasury could just refuse to take a NWS dividend. If this holds, it would mean that Treasury actually cannot just deem the seniors repaid. It would take a court recharacterizing the past NWS payments to get rid of them cleanly like that. Instead, it appears that Treasury would have to be allowed to convert the seniors into another type of share to fulfill the requirement for a compensatory benefit. If that ends up being commons, and the seniors are converted in their full par amount of $193B, that essentially brings the current commons to zero (a fraction of a penny). What about making that compensatory benefit jump-starting the commitment fee which, so far, has been waived. Briefly, they let go off the 187 bill part of the commitment while they institute a new benefit, unclaimed to this day, in the form of a fee for the 250 +/- bill remaining. This modification would not contradict that ruling, will eliminate the Srs. and will allow for retaining full earnings. Keeping the value of the warrants fully. In addition, Treasury could claim that as part of the "compensation" for modifying the agreement, their warrants will become immensely valuable.

Following Chris from the google board days :) In my view, the Calabria/Krimminger 2015 paper may now be a bit overrated. It's been over 3 years, a new administration has taken over and soon a new Congress will be in place. Not to mention the real estate market has accumulated great imbalances. Calabria may now see receivership only as a tool to achieve something else and not as the intended interpretation on that paper: liquidation (as a should-have). Whether Calabria decides the course of action is to privatize the companies, good bank/bad bank, or something else, receivership could be the transition method. If it happens this way, he will want Congress to ok any receivership scenario by making senators feel at ease with it and making it part of a legislative piece. Which may mean lots of hearings and time. Meanwhile, he may push for a 4th, kill the Srs. and recap. Time could favor the Jrs. as they may continue to add value should the Srs. go away. Either way, I think he will not be looking to kill equity and that will be fair to shareholders. I think of Trump/Mnuchin as being on that camp too.

I think we all see this. But in the best Pavlov fashion we have been trained to expect bad outcomes. In my own case I know I am now terrified of a windfall. Maybe I will even give it away to Corker. Or Stevens. Parrot?

I am sorry. I removed the link. The video was from 2015. By error, I quoted the video below on that page. A more recent one. So not happy anymore. I believe anything written or said 3-1/2 years ago doesn't really count.

In my view, writing a paper from the bench and having godlike powers as the head of the FHFA can radically alter one's perspective. Calabria may be in a position, as Director of the FHFA, to play in a sandbox and follow his dreams responding to nobody once confirmed. So it may be a mistake to nail him down on his paper. Deep down, Calabria believes there is no reason for Fannie and Freddie to exist. Less than deep down there is the market reality which, as Locus has just mentioned, is becoming less orderly. And the housing market in particular has been subject to many headwinds that any head of the FHFA will not be able to ignore. We should also not speculate on a warrants gift to the government. Trump just said on TV that 5 billion will do wonders for the wall. He doesn't need Treasury's warrants. Further, he wants that money to come from Democrats, in a way. Finally, I agree with investorG. For any resolution, which implies unloading vasts amounts of money on Fannie and Freddie's fire (lack of capital), money men will absolutely want to have some kind of legislation as assurance and insurance. Even though HERA, as comprehensive as it was, became useless both as assurance and insurance when one person -just one- decided there was a better way. The 2015 academic CATO paper written by Calabria is a masterwork that took tons and tons of time, and one which will remain a cornerstone of his career. I do not buy the notion that for the trappings of power Calabria will cast this history aside when and if he is installed as the FHFA director, a post that has been ruled unconstitutional, by process of nomination by a president likely to be impeached (but not convicted by the senate, of course). This is a highly visible position that may effect the entire US economy and be judged for years into the future. My bet would be that he would ascend (descend?) to the post of FHFA director to effect change and try and put his stamp on the process, not to harness the trappings of that post. I could be wrong, but I know what it takes to write an academic paper and the paper he wrote for CATO is no joke. It is a thing of beauty. I think the point about what plaintiffs' attorneys would do with this material is a good one and I stand by it. If it goes that far along we will see; perhaps on January 23rd. One cannot unwrite those words. I'm sorry but I'm kind of focused on the court cases. I think they are fascinating, they will set precedent that is important in the US, and forgive me but I don't trust any of these jackalopes without the rule of law standing firmly behind them keeping them in line. Politics plays its part, but the law is supreme. Thank you, Wiggins. Are you referring to this paper https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2539197? Because I was only referring to the Amicus Curiae he wrote together with Krimminger where he sides with shareholders.

In my view, writing a paper from the bench and having godlike powers as the head of the FHFA can radically alter one's perspective. Calabria may be in a position, as Director of the FHFA, to play in a sandbox and follow his dreams responding to nobody once confirmed. So it may be a mistake to nail him down on his paper. Deep down, Calabria believes there is no reason for Fannie and Freddie to exist. Less than deep down there is the market reality which, as Locus has just mentioned, is becoming less orderly. And the housing market in particular has been subject to many headwinds that any head of the FHFA will not be able to ignore. We should also not speculate on a warrants gift to the government. Trump just said on TV that 5 billion will do wonders for the wall. He doesn't need Treasury's warrants. Further, he wants that money to come from Democrats, in a way. Finally, I agree with investorG. For any resolution, which implies unloading vasts amounts of money on Fannie and Freddie's fire (lack of capital), money men will absolutely want to have some kind of legislation as assurance and insurance. Even though HERA, as comprehensive as it was, became useless both as assurance and insurance when one person -just one- decided there was a better way.

Thank you, Locus. I have always believed in the "exigent circumstances" scenario. But when will Quicken Loans blow up nobody knows. . Or any of the non-bank financial institutions for that case. We know there are great imbalances in markets and that the Fed is in balancing act mode. Unfortunately, the unraveling may take more than one quarter.

sure. just guessing, and would stop writing on this if someone says why it cant work, but: sweep stops now. commitment fee established to pay for backstop (which is needed). companies into receivership in 2019. operational assets carved out into new companies and re-ipo'd eventually with a clean slate (don't need to raise a lot of $ so more doable). legacy assets (5trn portfolios with some operational assets to wind them down) stay in receivership. normally in receivership all cash flows go to sr pref until paid off, then jr pref, then common gets anything and everything left over (if there is any). in this plan, there'd be a pre-arranged waterfall of cash flows: say sr pref gets 75pct, jr pref 20pct, common 5pct. since the cash flows would expected to be large as the 5trn portfolio runs down, a jr pref shareholder would expect to get par over the course of a few years. lawsuits go away. tsy commitment goes away over time and tsy makes a lot more $ for deficit reduction. Where are the warrants in this plan? Also, if they institute a fee on the remainder backstop why would the Srs. remain? Something is complicated in this scenario: Srs. remain yet NWS stops? You mean Srs. at 0% yield so that only principal is returned? I know it is the legal view but even Calabria stated the original commitment was not a scheme to profit from. In this scenario, the government will be making an absolute killing for decades. The ultimate goal of a plan like this is to prevent a windfall for shareholders. At all costs. And even then, minimize the gain over a period of many years so as for any solution to become more palatable. It's a bit over the top, in my view. Given some of us have already been on this for almost a decade.

Not sure I understand this scenario.. could you expand? Companies survive receivership and go on run-off. Cash flows to be used partially to repay Jrs. (at 20% of CF) and any excess flows to commons. What would the Srs. benefit be? And taxpayers? Also, this contemplates new companies running with new assets and presumably any reform they want to institute (paid-off guarantees, no charters, etc.).