rros

Thanks for the update. No problem. Here is more: http://www.themreport.com/daily-dose/10-10-2017/deloitte-says-hack-not-affect-gses

https://www.americanbanker.com/news/fannie-freddie-not-impacted-by-deloitte-breach-gses-say

disagree. no lame duck is going to enlist other republicans against trump unless they are lame duck themselves, or unless corker announces soon that he will challenge trump for potus in 2020. that would create some chaos Oh.. ok. That makes more sense.

I am of two minds re Corker. Although I still think Trump has the *voters* card and the popular narrative on his side helping him exert leverage it is also possible Corker has acquired new power. Not running for the Senate he now feels free to enlist other Republicans against Trump, who in turn has lost any possible control over Corker by him not running for re-election. How may this affect housing reform and our fate I have no idea.

this escalated quickly. Corker's comments crossed the line this week and so a response was certainly incoming. but this is not repairable at this point and corker will likely become popular with the press. trump cant seem to keep too many friends around Trump has a ton of support from voters. Making sense of the irrational is not easy but it is as real as anything else. Even when most policies might work against his voters a popular speech based on a popular narrative - all under the name of a movement- is so pervasive that it prevails over failed policies. The crowd will not see they may be shooting themselves in their feet and continue to irrationally support their leader. One of the most powerful popular movements in history was founded/created by a colonel in Argentina, Juan D. Peron, back in the mid 40's. His first wife, Evita, is probably a more familiar name. The movement he created -mostly based on the blue collar segment but with sparkles of elites here and there- not only exists today, it is as powerful as it was back then. All it will take for Trump to rally the crowd is to make a little speech in mid-west tiny town America and Corker gets buried. No matter how much CNN appearances he gets. It looks to me it is Corker who doesn't understand what is happening. Military people, and needless to say Trump, also understand incredibly well popular sentiment and the madness of the masses. It is no surprise he surrounded himself with the military. Trump and his generals are in this together. Tillerson may depart but none of the other guys. And Corker will not be part of this administration now or ever. He is not getting it and is about to risk a lot.

Watt seems to have a personal view regarding a new draw. In private circles it was mentioned he would consider a draw a dereliction of duty. Publicly, his reasoning has some logic. Drawing on the remaining 258 bill will both erode the *capital* left and set a course downwards after a 6 years (+/-) hiatus. Which will in turn erode agency debt holders and bondholders' confidence in their securities. It makes sense that holders of debt will feel their fate is in the hands of incompetent politicians. Mel Watt, and not Corker, may have a point.

I generally agree, but all of the above would also be consistent with moving towards MBA-type plan which may/may not wipe out shareholders (as irrational as it may be, if you watched the full congressional hearing w Watt, it is obvious that these morons would have no trouble winding down the GSEs and implementing MBA's end goal). I am just not fully comfortable with how this actually will play out in reality. The amount of negative feedback that Mnuchin (and watt) will receive both publicly and within congress will be enermous. Does it make sense for Mnuchin and trump to make what will be a perceived hostile move towards the majority of congress, when they need these guys to pass non GSE related legislation? Seems that everyone here is doing a great job reading between the lines (I mean that seriously, not in jest) but are discounting the overt forces at play and FHFA's anti- recap/release language. It seems the easiest approach is for Mnuchin to simply continue conservatorship or even worse, cede to an MBA type plan to win votes in more legacy defining areas of government (healthcare, tax, infrastructure). The incentives/reciprocity bias between trump/Mnuchin and berkowitz/Paulson have been discussed, but these may be less material than other hidden incentives at play. Mnuchin worked in mortgage finance for 30 years - is it unlikely that there are conflicting incentives with those who stand to benefit from an MBA type plan? I think directionally we are in a good spot, but I don't share then same level of optimism as you guys. I actually do agree with your view. Rewarding shareholders is the most controversial issue and the largest roadblock. Even though we showed up in the recent RNC document.

Countdown to the finish line.

I listened to that segment. He specifically said that. He hesitated and was pressed by the congressman. So he estimated a 2% to 3% capital level in relation to 5 trillion liabilities. He used those exact numbers. He also said the companies would be SIFIs and that the difference would be that the Federal Reserve would play a role in regulating them. He also made a subsequent comment on differentiating them from banks. And it looked to me this comment had the purpose of justifying a lower percentage of needed capital. Given Moelis' numbers I was expecting some follow up from the crowd referencing capital levels of 400+ bill (organic capital + Treasury's line) but nobody brought that up.

Written testimony from yesterday. https://financialservices.house.gov/uploadedfiles/hhrg-115-ba00-wstate-mwatt-20171003.pdf "As I mentioned at the outset, FHFA has explicit statutory obligations to ensure that each Enterprise “operates in a safe and sound manner” and fosters “liquid, efficient, competitive, and resilient national housing finance markets.” To ensure that we meet these obligations, we cannot risk the loss of investor confidence. It would, therefore, be a serious misconception for members of this Committee, or for anyone else, to consider any actions FHFA may take as conservator to avoid additional draws of taxpayer support either as interference with the prerogatives of Congress, as an effort to influence the outcome of housing finance reform, or as a step toward recap and release. FHFA’s actions would be taken solely to avoid a draw during conservatorship. " With that statement plus all his public comments defending an action that might be, could be or will be construed as recapitalization, Mel Watt is going to an extreme to disentangle himself from one of the interpretations of such action. As we all know, protecting taxpayers (by allowing a capital build up) and recapitalizing (breathing life into equity) are tied to the hip. Unless they come up with some subterfuge one action leads to the other one and vice-versa. Mel Watt is simply shouting to anyone who wants to hear that for him only one side of the coin exists and that he has nothing to do with the other side. Let's hope these two sides of the same coin remain attached given how creative the government can be constructing new realities. But let's face it, point blank, a buffer IS recapitalization. Provided there are no subterfuges.

On a more realistic level, how about Mnuchin simply declares the Sr. shares extinct as the funds have been repaid. Then, institutes a commitment fee for the remaining 258 billion and going forward all Fannie and Freddie have to pay is that fee for that commitment, a fee for that taxpayer support? This will set the course for a Moelis/admin restructuring, be inline with the SPSPAs and continue to reward taxpayers for their support.

Thanks. **SEALED** OPINION and ORDER granting 384 Motion to Compel. The parties' joint status report with proposed redactions is due by no later than November 3, 2017. Signed by Judge Margaret M. Sweeney. (sp) (Entered: 10/04/2017) MOTION 384 --------------- **SEALED**Second MOTION to Compel , filed by All Plaintiffs.Response due by 8/17/2017. (Attachments: # 1 Appendix)(Cooper, Charles) (Entered: 08/03/2017) From wikipedia (sorry). "Motions to compel are frequently used to settle discovery disputes, especially when one party refuses to turn over its answers to interrogatories, documents or other items asked for in a request for production of documents, or its responses to a request for admissions."

possible but doubtful. you're likely stuck with him. Depends on the new terms for the buffer. A 5 to 10 bill buffer that is permanent and has no strings and is not renamed to something fanciful or placed in special accounts will be a positive. It will represent an incipient recapitalization no matter how they try to represent it. Just because it will be permanent capital sitting in a capital account. Anything other than this, could be very negative. Say, a buffer that resets (starts at 10 bill and erodes every year like it has been happening with the 3rd amendment and replenishes after a certain threshold. Or a buffer that sits on a specially created account or a buffer that can only be used under specific, narrow circumstances). Briefly, a clean buffer of a good size would put us in the right direction, end of the conservatorship, and make Mnuchin more believable re his view of getting the companies out of government control. It will also be in line with Watt's recent comments that no company can be safely operated without capital.

Why would Trump replace someone who said he is a 'moron' with someone who thinks he is a 'moron'? Trump demands absolute loyalty. Corker is out of favor.

My view is that Mnuchin/Watt will jumpstart the process with the creation of a buffer. Perhaps, a recap in disguise. Unless it is Corkerized with strings attached. Whatever shape this buffer takes will speak volumes. This, may or may not act as a push for legislative reform. If it does, reform may fall in line with the buffer tactic. If it doesn't, the buffer may prove to be just the initial step of a wider Mnuchin/Watt move. Meanwhile, and as time passes, Corker gets closer to the exit door.

Agree, I think campuano was referencing how Mnuching expects the div and Watt was referencing building capital as a seperate topic. 2-3% of 5 trillion. About 100-150 bill. Plus the 258 bill from the commitment would be 350-400 bill of backing.

I'm not one for following price action, but the common stock of Fannie is up something like $0.26-$0.30 since the payment was made mid-day on Friday. It's hard to see how the payment going through is a positive. It could be gambling on Watt saying something positive tomorrow in his meeting with the House. Another 1.2M shares of FMCKM volume posted today. What is up with that one series? 1.245M shares traded lower than Thursday's last trade at $5.50 ($5.42/$5.48/$5.43/$5.48). Sure enough, only 100 shares traded up at $5.59 after 1.245M. Someone conveniently hiding the activity?

Perhaps. Watt did write this letter today saying he's working with Mnuchin. https://twitter.com/DoNotLose/status/913821295443415040 It is almost a foregone conclusion there will be a 4th amendment allowing for a small buffer, 3 to 10 bill my guess. The only progress made after the nws was established over 5 years ago is that the clause for achieveing zero net worth by January 1st, 2018 will be nuked. Not much progress I'd say. Maybe that is why IU is fishing for new candidates for new lawsuits. I wonder what Paulson may think now since a small buffer opens the door for a permanent conservatorship contrary to what Watt's and Mnuchin's stated desires are. If Trump decides on his own that the Sr. preferred shares should disappear, the remaining of the commitment (258 bill) remains. BUT a new scheme has to cover Treasury's compensation for that line. This would be a great opportunity to advance a small commitment fee on the back of that remaining commitment. The original commitment used, then, Trump can declared paid off. Jrs. will instantly see par as the Damocles sword above immediately disappears. I know. Nice dream.

In the realm of speculations, perhaps the market believes Watt's agreement to pay means Watt has an assurance by Treasury that something is coming to alleviate the capital issue. We need Trump's executive pen!

Another 2,300,000 of FMCKM traded today and 2,000,000+ FNMAS. These trades look like a wash. Could be inter-MM. Can't tell. 650 k @ $5.37 (10:53:03) Then, 200 k @ $5.40 (10:53:09) 250 k @ $5.40 (10:53:13) 200 k @ $5.40 (10:53:17) Note it is 650k and trades are 4 seconds apart. Looks like a machine (or 2 buying and selling between them). A little later, same pattern: 500 k @ $5.37 (11:29:50) Then, 250 k @ 5:40 (11:29:54) 250 k @ 5:40 (11:29:59) Someone wants to show volume at the end of the day. rros, thank you for the added detail. I try not to worry too much. It is difficult to assess intention. There is a lot of arbitrage between some of the classes, including commons. And machines are specifically good at it, and easy to program on that specific trade. On FNMAS you may see trades at the ask @ $6.94 for 247 shares, then seconds later someone drops a grenade of 26k shares @ $6.91. Same 100 shares bought @ $6.93, minutes later a bomb drops @ $6.91 for 30k shares. Obviously, someone is selling and hiding it. But, what if the trader is raising money to buy the cheaper FMCKJ? Or commons? So... given not every sell is a negative and given intention is impossible to assess the best is not to worry (too much). Machines trade. And have been programmed to "think" like a trader, not an investor. Good traders buy and sell same shares to disguise and confuse other traders and tape readers. Specially, when holding large positions. And they could do this throughout the day or days...

Another 2,300,000 of FMCKM traded today and 2,000,000+ FNMAS. These trades look like a wash. Could be inter-MM. Can't tell. 650 k @ $5.37 (10:53:03) Then, 200 k @ $5.40 (10:53:09) 250 k @ $5.40 (10:53:13) 200 k @ $5.40 (10:53:17) Note it is 650k and trades are 4 seconds apart. Looks like a machine (or 2 buying and selling between them). A little later, same pattern: 500 k @ $5.37 (11:29:50) Then, 250 k @ 5:40 (11:29:54) 250 k @ 5:40 (11:29:59) Someone wants to show volume at the end of the day. The FNMAS trades are more worrisome because the volume is all at the lowest price consistently, as in someone selling. Then, jacking up the price for the next sale. But it is always difficult to tell. Someone with clout could be trying to get in at the bid. Unusual, but in OTC strange things happen.

Thank you. Should there be any reference to something so specific in a pamphlet targeting the average citizen? That said, any tax reform plan must have forced the authors to look into this: Maybe a solution has been agreed upon which we don't yet know?

Nice job Yes. To the point and awesome.

Paying in kind would have been good. Or paying annually. These 2 options appear to be gone as Layton sounds very confident that only a buffer has some real chance. A buffer means obviously the nws continues, just at a different pace. And given the overall tone of the interview he basically admits under new terms (buffer) the c-ship can continue -not forever- but may be another decade or two. Amazing how easy it is for some of these guys to simply embrace nationalization only because some companies cannot function without government support. His views are in stark contrast to the RNC document. But then, he is the one running Freddie and in close contact with Watt. So he has the inside view. Layton is clearly happy with Treasury's (taxpayers) capital and has no desire for private markets to interfere in how Freddie Mac is funded. It is always better for some to become civil servants and bow down to Uncle Sam who would rarely fire you than to respond to the discipline of free markets and board of directors who may make your life difficult. After all, if taxpayers are the ones giving you the money to run your business... do they really have any say? Layton is just another bureaucrat.

Yes. Your explanation is simpler. It's the basic premise that confuses us. Stegman believes these companies have been nationalized with no need to protect taxpayers because of the incoming dividends and starts his analysis from there. We believe they are still private companies in need of capital for taxpayers' protection.