rros

I am and have been both naive and optimistic. With this bias in place, my thought is that Corker/Mnuchin's exchange has been rehearsed with Corker letting Mnuchin's door open to administrative reform. Remember, in the past he not only refused to see this option but actively fought it with Jumpstart. 1. The mutually owned entity is a no-shareholders solution. Corker's statement today about an inclusive resolution denies it. Unless admin can do this on their own which I do not think so (rechartering is needed). 2. 1 to 10 years of c-ship. In my view, Corker's admission about a high likelihood of Congress failing to act points strictly at this year's effort. Warming up to the idea of administrative action right after such failure has become obvious. I really cannot see this extending into 2019 unless it is real that Treasury wants Fannie and Freddie's income. In which case, we are toast. Chris, yes, Corker is all in now lol.

Definitely a conciliatory tone from Corker. And no more Jumpstarts from him ever. He looked at all the panel when he emphasized "we have shareholders in these entities today...".

https://www.banking.senate.gov/public/index.cfm/hearings?ID=E073F06D-48F0-4013-9645-61BF4431C57A

The Stevens comments I was thinking of have been since Trump was elected. He had this to say about the Moelis plan: http://www.scotsmanguide.com/News/2017/06/Shareholders--GSE-reform-can-happen-quickly/ As for Parrott's comments about FHFA moving to the right in 2019, I see those as scare tactics to get the Ds to support what the Rs want right now. He's saying "if you think this version of housing finance reform is too conservative, you don't want to know what the 2019 version will be like!". It's all bluster because the FHFA director doesn't have nearly that much power, and if the Ds gain control of Congress they will have much more say in what happens next. The fight over the direction and even constitutionality of FHFA would be just like the current one over the CFPB with the parties reversed. Yes to Parrot and scare tactics. Felt the same. Maybe Stevens got a slap on the wrist after that comment?

I would take anything David Stevens has to say with a giant grain of salt. He has been on a crusade against hedge funds being able to profit on GSE shares. Yes, agreed. Everybody that has been following the situation should know to take what he says with a huge grain of salt. His crusade had leftist Obama's backing who said in an interview in 08' before becoming President speculators and shareholders will not profit from FF's debacle. I have not heard Trump or Mnuchin said anything like it. David Stevens obviously lost his leftish cover and with that, his prior stance. Parrot now seems to be standing on quick sand too. And Peter Wallison just called the Treasury Dpt. "rogue". If any bill effort fails, it will be more Moelis and less Watt/FHFA. Parrot's feared move to the right. I continue to believe any actor making moves in the background has understood that hurting investors/shareholders will be frown upon. Hopefully, the senate bill will reflect that.

Thanks. The tough part is having to revive fannie and freddie. Sorry didn’t see. Did corker say that? What would he know about it? Sorry all. That was me, not Corker. He was asked: Is infrastructure possible? Corker: "I think infrastructure is tough because of the pay for, ok? How do you pay for? I know he's (Trump) floated things as the gas tax, I don't want to mention some of the other things he's thrown out.../Wallstreet has a weary mouth/..., but I know he is looking for a way to pay for so *that* is going to be the tough part." There was a part /-----/ I could not understand. He spoke so quickly. My inference was that if warrants are in someone's mind at the WH and FF's are recapitalized and released so that exercised warrants pay for infrastructure, *that* will be the tough part... for some. As in hard to swallow. Was just joking. Impossible to say what Corker left out in those last seconds. He was vague about what he heard or knew about the "other things he's thrown out"...

Thanks. The tough part is having to revive fannie and freddie.

Although I do not directly short, I went short yesterday with ETFs. And some gold. I am keeping the Jrs. though.

Clearly, this will be a Trump issue. Or any President in office. Therefore, a bad economy or a bad market makes the political issue an economic issue. Must win the next election! This is when everything goes and admin action takes place. You have to reach for the cookie jar and put those 100 bill to work. Fast. And I am not thinking 1 to 2 years but this summer.

How about adding we have seen the highs for the market this year?

FF might soon post a loss to be covered by taxpayers. Next quarter, economy may not look that rosy and by the summer interest rates may be headed lower with markets taking a hit. Lower rates may translate into additional -hedging- losses for FF. A scenario like this, what would it do? Accelerate a bill? Push administrative reform to a rapid recapitalization Watt-style? Today, markets being hit hard seems unthinkable. But just in case I started to raise cash. Not selling my Jrs. though.

Mnuchin/Watt signed off on the letter of agreement (acceptable version of a 4th A) with NO drama. That is after Mnuchin said he expected the full dividends to be paid to Treasury and Corker vociferously took a shot at Watt. Truth is, anything can happen any time. CP is not going to ring a bell the day before administrative action takes place. They did not do it before the letter of agreement. And if they take admin action, Congress will be unable/unwilling to stop it. Even if a few more senators become vociferous. https://www.fhfa.gov/Conservatorship/Documents/GSEAgreementLetters_12-21-2017.pdf Most of us were blindsided by that agreement. In spite of being the most obvious move that had to be taken and in spite many of us having anticipated it. Shares will fluctuate. But the most obvious thing right in front of us is Mnuchin wanting to cash in the warrants. Specially, to further consolidate the economy via fiscal policy (infrastructure). We are at the end of the line and 2019 may see a recession.

If a Jumpstart (or Jumpstart-like) bill was gaining steam (either as a stand-alone bill or attached to something bigger), couldn't Mnuchin/Watt simply make a deal before any Jumpstart gets signed into law? I'm sure they are watching any and all legislative bills to see if something like that is trying to be sneaked in. I wouldn't be surprised if Mnuchin/Watt already have an agreement written that merely needs to be signed in case this scenario arises. That is exactly what happened -in the dead of night- with the 4th. While a new jumpstart was in the works failing miserably.

Sides are so far apart (congress/watt) that any negotiation seems difficult, at best. Given Watt's historical cautiousness and Mnuchin's delicate balancing act, I would think Congress can act/react quickly and in a negative way. Proof is Corker's Jump start Act. Who know what else they could do?

https://www.insidemortgagefinance.com/imfnews/1_1276/daily/-1000044481-1.html#Login If you thought that GSE reform had a good chance of passing this year, think again. Friday morning, industry lobbyists were perplexed about new reports that Senate Republicans were leaning toward a reform plan that entailed placing Fannie Mae and Freddie Mac into receivership as a transition to a new housing-finance system, one with multiple guarantors. The belief is that the GSEs would be killed outright. As one trade group official noted: “There is no vote count for receivership. There is not a single Democrat who will vote for this…” "perplexed" is the correct word. How could Corker go from admitting at many hearings that the current structure stays and no need to re-invent the wheel to a receivership with a minimum of 10 new companies supporting the housing system? In the end, Ackman maybe right in that Corker and Warner are sophisticated players. Coming up with a bill that looks impossible to pass will only leave one choice: admin/FHFA cooking up the way out of c-ship. But that would be just too smart for either C or W.

This quote makes a lot more sense given proper context (imagine that!). Audio at around 13:30 contains the quote above and the conversation surrounding it: https://app.voicebase.com/autonotes/private_detail/58549613/hash=bpyaZG1rZ2uWaZmWxmGWnZ2PnG2XlGZsaWqYkZqWlJRmyMmSl25na5psmJSU CP refers to their ownership of the Sr. preferreds and what that represents. Inline with what conservatorship and the PSPAs have done (to us). Meaning there are just 2 actors since c-ship: the conservator and one investor (Tsy). Joe Light understands full well what those words may look like out of context. C-ship will keep us invisible for its duration. Thank you for the audio link, Luke. And emily for the funds purchase information.

The market seems to agree with you. I would love to have more context behind those quotes though. Isn't that the terms of the c-ship? That our rights are suspended? Maybe he is referring to that.

Can anyone explain why Jrs. aren't moving much today? We just had the T. Scy counselor agreeing -to a good extent- with Watt's plan. What is the holdup? Risk of receivership to create new shareholder-owned companies where the fate of legacy holders is uncertain? Both Millstein and Berkowitz -in their original plans centuries ago- capitalized new entities using Jrs. at full face value.

I emailed Mrs. Shapiro to see if there is a transcript available post-meeting.

That "blank space".. more realistically means "blank for the public". Senators don't like the rumoring. Specially, the one that makes our stocks go up. If the Senators drafting the bill are so anti-hedge fund (note: I did not say anti-shareholder) then the blank could very well be a positive. A bill that zeros out all shareholders would cause prices to tank and the Senators would want that to be public. It does seem that none of the anti-GSE power players ever speak out against shareholders as a group, instead (especially David Stevens) using the prospect of hedge fund "windfalls" as an excuse to not allow the GSEs to recapitalize. I have always wondered what David Stevens would say if someone directly asked him "if all hedge funds and institutional investors sold all of their Fannie and Freddie shares would you still be against a recap?" Politicos only care about optics. Privately, both C-W probably wish they could be Ackman-like in a 90 mill Manhattan dwelling. So I agree. Silence on the shareholders dpt. is most likely good. Or better.

That "blank space".. more realistically means "blank for the public". Senators don't like the rumoring. Specially, the one that makes our stocks go up.

Interestingly, it is starting to look like a triple bottom more than 3 years in the making. If this is the last dip it may ultimately lead to a reverse head and shoulder with a target of $7-$8. IF, if, if... Is that even relevant in this case? I dont think TA means a whole lot at this point. Not relevant. Just curiosity. Technical traders are surely noticing it. Ackman owns a lot of common stock but virtually insignificant when it comes to total funds invested. And since he always considered this position as long term options he is probably not worried.

Interestingly, it is starting to look like a triple bottom more than 3 years in the making. If this is the last dip it may ultimately lead to a reverse head and shoulder with a target of $7-$8. IF, if, if...

Entirely correct, deadspace. It has been an unfortunate learning process.