rros

According to a Bloomberg reporter there is something called "manager's amendment" that includes all the last-minute, behind-the-scenes deals that have been worked out and that nobody knows and they throw that in the bill right before the vote so Senators don't really know what they are voting on. I found this link with more information: http://www.districtpolicygroup.com/dewonkify-detail/dewonkify-manager-s-amendment . Let's hope there is nothing GSEs related in there.

And I still am but with a tweak... If retention of capital is the desire of both Treasury and FHFA it could mean an implicit agreement to extend the conservatorship. Bad. The seemingly current disagreement shows one actor willing to build capital (showing independence and potentially wanting to breakup) while the other one resisting. I feel (just guts) this disagreement helps us and the small cushion could prove to be a starter. Given what we experienced in the last year or so the road to fully recap is politically closed. So how do you start? You really cannot show your hand or risk Congress doing the unthinkable. Joe Light = bad. Maybe. The timing of the article is highly suspicious. But, participants are buying it (and the shares). No selling the rip. Let's see the closing prices today and follow through tomorrow.

@ emily and OT. If you are interested in bitcoin, simply buy CME. On Dec. 10th. contracts start trading. CME will make awesome profits out of this whatever the price bitcoin may be. Down the road they can open up to other cryptos (litecoin and ethereum). The trading volume could be immense. Only one winner: cme. And if it joins the ride, cboe. CME broke out yesterday to historic highs. Good entry point.

the article seems incomplete at best. what's the point of a 2bn buffer when you're facing a 10bn writedown in the same quarter if tax reform passes? my best guess is light's trying to stir up trouble a) with corker to derail tax reform or b) to get a jumpstart extension before year end. I take this at face value. The bigger story seems to be the disagreement between FHFA/Treasury. I am thinking -regardless this is true or theatrical- if a cushion comes as a result of a disagreement then it is good news. If it comes as an accord, bad news. A disagreement implies the desire by Watt -and resisted by Treasury- to rebuild some capital, any. If it happens and with another year to his term, Watt may push for much greater cushion and much greater capital. While Treasury may continue to play the same "resisting role". I would like this set up. It moves in our direction while Treasury can't be totally blamed.

big news this morning https://www.bloomberg.com/news/articles/2017-11-29/for-fannie-freddie-watchdog-a-quieter-battle-with-white-house

mnuchin has laid the groundwork that he's the boss in this area. he's currently however in a year-long quiet period on the matter. crapo merely reads some lines given to him by his junior aide which jives with the lobbyists who buy the aide's dinners and wine. the key question, for me, is what does mnuchin really want, besides the 2 standard lines he's given to date. I liked the response of not agreeing to dismantle FnF a couple weeks ago. At 2 standard lines per year we should be able to have a full paragraph by the time Trump's term is over. Not bad.

Let's hope you are right.

it is highly unlikely -- even in a positive scenario -- that jr preferred holders receive par. if pressed, the moelis authors would likely admit the same -- they started at par for their request but know that the Congressmen will want some haircut in any potential deal. somewhere around two-thirds of par seems reasonable. I wouldn't dismiss the crapo news today. there are a lot of forces coming together that suggest an aggressive attempt to make a deal in congress during 1h 2018 before things shut down for the midterms. for those who think a strong attempt won't be made, that view suggests mnuchin is lying when he's said all along in 2017 that he wants to work with a bipartisan congress on housing reform. I think you're right and an attempt will and must be made, but Cherzeca is right on regarding the likelihood of passage, unless something very reasonable is worked out. One of the main reasons to be bullish here is that every single party is aligned on the solution, there is really no other way to resolve the situation without it working out for everyone. You need to preserve the 30 yr. and get them out of government control, but you need to protect the taxpayer, so you need private first loss capital. Treasury makes a big gain exercising the warrants and selling the shares back to the public. Shareholders recoup and can buy more. Win-Win. We share the same incentives for recap/release, reform/overhaul, or whatever you want to call it. The old us versus them mentality no longer applies IMO. I do not think Powell will go for this and he will have a strong influence on reform. The above is akin to a simple recap. At least, on his eyes. Most likely, the push will involve making FF smaller guarantors that will compete against other participants. I am fine with this (Millstein original plan) as long as we remain owners. https://www.c-span.org/video/?437193-1/federal-reserve-nominee-pressed-national-debt-deregulation-confirmation-hearing Starts at minute 28:20

It appears... on your face, Sleet! I actually see dismissals against share price resilience as encouraging news. It may mean participants have already made up their collective minds that the outcome lays squarely on Mnuchin. I can't see Crapo moving legislation that will not be in line with Admin. crapo will do whatever corker/warner tell him to do. but getting bi-partisan committee support in this environment, much less passage of a bill that clears both chambers and is signed by trump (upon instruction from mnuchin) seems like a pipedream given the past 10 months Corker has /somewhat/ fallen into line: -paid-for narrow guarantee. -keep present infrastructure. -capital cushion ahead of everybody else. What are Warner's incentives being the second richest congressman, after all these years? There has to be some degree of worn-out_ness and we are all getting old. There is a 40 page bill making the rounds, according to Paolo. We should only hope that there is written language in that bill re legacy owners and that it is benevolent.

It appears... on your face, Sleet! I actually see dismissals against share price resilience as encouraging news. It may mean participants have already made up their collective minds that the outcome lays squarely on Mnuchin. I can't see Crapo moving legislation that will not be in line with Admin.

once Ginsburg failed his moral compass test, only the supreme court could possibly save us in the courts. all the other judges simply hide behind his reputation. put simply, the 3rd amendment fails all tests of honor in our country. fwiw, my thesis, ever since the February disappointment, was the court cases are important only as placeholders to drag this out to a legislative or administrative solution while providing shareholders some modest negotiating leverage. tomorrow we'll gap down and then we'll see where we stand in the afternoon and the rest of this week. the preferreds are down 20pct in a month, price level does matter. It is possible buyers may show up later in the afternoon. Perhaps later in the week. Those sitting on the sidelines that believe Mnuchin's words of keeping Fannie and Freddie and the 30YM while protecting taxpayers (with a capital cushion) may see this as a window of opportunity to build a stake.

ok, i'm prepared for someone to wake up tomorrow and sell the preferreds I own trading at 18-19pct of par closer to zero. for this investment, 2017, 'yikes' is spot-on! Am I the only one who thinks the less cases the better? No cases, no more hand grenades in our faces. And by now we know lawsuits have been -for whatever reason- ineffective. Either way, 2018 will bring legislation or potentially administrative reform.

Meaningless. Until Trump opens his mouth and states clearly where he stands nobody else matters. Danger is, his mouth might remain shut all throughout the process. Given he said not one word in 1 year this danger is very real.

This guy believes sausage will be ready before year's end with the 20% corporate tax enchilada in it. No correction in sight according to permabull Wesbury. He's been correct (as well as Paulsen) since 2008 and called the bottom on March 09' after Congress reversed mark-to-market rules in Feb 09'. http://www.ftportfolios.com/Commentary/EconomicResearch/2017/11/17/the-sausage-making-factory-and-tax-cuts

Possibly, since Mnuchin/WH ok this. Sounds like talks behind the scene. But then, maybe Mnuchin also ok's whatever Corker's new bill might be and is inline with 30Y and taxpayers' protection.

Does anyone here think Mnuchin might be secretly holding all the aces and comes out blazing once the companies incur massive draws? Like an extreme action stated by midas. Cancelling the seniors and doing away with the nws and letting the companies naturally recap. While blaming everything on Obama, as per the RNC resolution. Maybe Mnuchin simply asked Watt to wait and see if the tax bill becomes law and if so, has a plan.

I don't know how much discretion Watt has over the timing of the DTA writedown once the tax rate gets cut. FHFA has had quite a bit of accounting latitude in the past and Watt really wants to avoid a draw, so if he can push the writedown into Q1 2018 he likely will. That would then give Mnuchin an incentive to make dividend payments annual (giving FnF time to build up profits against the DTA losses) before March 31, 2018 or do something more dramatic. Fannie explains this in their last filing. They don't have latitude. The filings say the loss will be recorded the same quarter the legislation gets enacted. I also wonder if a more dramatic maneuver represents receivership. Fannie explains that without a draw from Treasury's funds, receivership becomes mandatory. Both companies, of course, have 258 billion at their disposal so that risk seems non-existent. FANNIE FREDDIE FITCH https://www.housingwire.com/ext/resources/images/editorial/Charts/More-charts/Fannie-Freddie-DTA-writedown-scenarios.png This analysis by Fitch was from February so write downs will be smaller. Still, in the tens of billions.

So the quarter the legislation is enacted Fannie/Freddie will record a large loss. If Trump signs the tax bill into law by Christmas, wouldn't that be this quarter?

I think it's called Stockholm syndrome. Specially happening after having been beaten down like a dog on his other stocks. The guy can't take one more day of punishment. Survival at any cost!

This is a hard question to answer, but my best guess is that Mnuchin is still trying to walk the razor's edge. If he comes out in support of shareholders he will lose political capital with those in Congress (and elsewhere) who want hedge funds to not make a "windfall" profit, while if he comes out against them then the "respect shareholder rights" types won't like it. He will naturally have to make his intentions known eventually, but if he is trying to keep Congress working towards tax reform, not to mention housing finance reform, he is better served as appearing agnostic. I still wish that I knew more about the possible ramifications of the RNC resolution. It is hugely positive language from the ruling party, yet it has not been talked about at all by the major players, so it is hard to tell what impact (if any) it actually has. So far it has been lost in the shuffle. It does provide the administration some cover if they do reform without Congress; they could say "hey, we put up a resolution months ago! We're just following it!" Being agnostic is a good way to put it. But perhaps *Treasury* supersedes any individual. Including Mnuchin and any treasurer after him. Whoever *Treasury* really is, it was adamant that shareholders would not see a penny. It would be hard to morph that same Treasury into one that upholds shareholders' rights. Maybe he just got a slap on the wrist last time stocks move on his statements. And perhaps no more statements until it is time.

Before any interview or conference, Mnuchin might ask them to not discuss that topic. For sure he or his team screen out questions. And for sure he rehearses answers. But as midas said, the dissonance is so large that nobody asking is laughable. How much longer can he maintain the precept, as number one or two, of taxpayer's protection once capital dwindles to zero?

He left out the part "we've got to get them out of government control". That's fine. It may mean Treasury will collect a fee for a commitment line standing behind capital. Which means some kind of government involvement. Since the starting point is keeping the 30YM he must have reached the conclusion this is only possible if government is part of the solution.

To me it looks like the most recent circulated memo read "radio silence". And what was said last November, was last November. Midas, Buffett agrees with you. He said at one point shareholders have already been punished. Said it many years ago when asked if they should be.

The dilemma/conundrum is what to do with shareholders as reform moves forward. While there are a few that believe we should be restored, there are some powerful individuals that believe companies were broke and equity was toast (or should be), therefore no bones. And while HERA states shareholders remain and Hank Paulson publicly stated shareholders may retain some value -after all is said and done- we really rely on this Administration (Trump) imposing a positive view on us that will solidly tilt the balance on our favor. Bitcoin is a dangerous game. Blockchain, instead, is a winners game. You must realize a currency that violently and constantly changes its own value cannot serve the purpose of store of value efficiently. Storing value is about reducing risk of loss through stable demand. Stability is key and stability is missing.