rros

Since they can't hold penny stocks or stocks under a certain price mark maybe they were forced to sell once that threshold was broken.

What may move the stocks the most, in my view, will be Calabria's guidelines for housing reform which will be adopted or part of what Treasury will pursue and push Congress to work on.

It is likely that Corker is seeking to extend his jumpstart fix to continue to handcuff Treasury.

This view is strange given Mnuchin's public stance. What is exactly the obstacle? Or is it that government is impersonal, thus anybody landing in the WH suddenly becomes the WH? So if you and I become President and Vice we will suddenly embrace and love nationalization? How does GS's boys benefit from the statu quo? Unlike Paulson, who publicly stated FF having a broken business model, Mnuchin seems to think the enterprises performed just fine going into the recession. With a view of simply restructuring and re-regulating them. That was not HP's view. Neither Geithner's. Nor Lew's. Is there something deeply disturbing at the Treasury?

... game set match?? are you joking? the roadblock to a fair outcome is far more likely coming from congress (direct and indirect as it relates to other agenda items) than from fhfa. if I had to bet, mnuchin and watt get along fine. if trump's approval rating was 60pct instead of 40pct, likely there would be more aggressive actions to change things. (this dynamic is also most likely why the HC bill failed, his popularity isn't high enough to allow him to get what the admin prefers). I thought everyone was in agreement Congress wasn't required for Tsy to act in a way favorable to shareholders. This filing seems to be explicitly a very positive sign - why is this wrong? unless he gives up on the hard right wing republicans and goes for the democrats + moderate R's to pass his agenda on taxes, infrastructure, immigration, housing, and healthcare, then trump has a razor slim margin to pass legislation using only R votes in congress --- he has to be careful not to piss off some of them. also in this filing the trsy is STILL fighting the plaintiffs on the NWS. and it's likely that watt would go along with mnuchin if he wanted a 4th amendment and/or to stop the sweep. Watt is a traditional democrat, a group that has been pro-GSE in the past. but you may be right --- if I am wrong and watt is acting as a roadblock, mnuchin wants to bypass congress at some point and this case is won by the plaintiffs, then it's a major positive. Mnuchin may get along fine with Watt. But what if he doesn't in the coming months? The fact that Watt can't be removed at will may be annoying to some. A lot less leverage.

Among the Treasury and FHFA departures from HERA and established precedents are the following: a) continuing the conservatorships for more than 6 years without any effort to comply with HERA's requirements to "preserve and conserve" the assets and property of the Companies and return them to a "sound and solvent" condition or place them into receiverships; b) rejecting any attempt to rebuild the capital of Fannie Mae or Freddie Mac so that they can return to "sound and solvent" condition by meeting regulatory capital and other requirements, and thereby placing all risk of future losses on taxpayers, c) stripping all net value from Fannie Mae and Freddie Mac long after Treasury has been repaid when HERA, and precedent, limit this recovery to the funding actually provided, d) ignoring HERA's conservatorship requirements and transforming the purpose of the conservatorships from restoring or resolving the Companies into instruments of government housing policy and sources of revenue for Treasury, e) repeatedly restructuring the terms of the initial assistance to further impair the financial interests of stakeholders contrary to HERA, fundamental principles of insolvency, and initial commitments by FHFA, f) disregarding HERA's requirement to “maintain the corporation’s status as a private shareholder-owned company” and FHFA’s commitment to allow private investors to continue to benefit from the financial value of the company’s stock as determined by the market. The authors of this paper were intimately involved in the policy discussions and legislative drafting that led to the creation of HERA, Mr. Calabria in his capacity as one of the senior professional staff to Chairman Richard Shelby of the U.S. Senate Committee on Banking, Housing and Urban Affairs, and Mr. Krimminger in his capacity as a senior policy advisor with the FDIC Obviously, Vice President Pence read this paper or, more likely, he was briefed by his staff on it. One of the reasons Calabria may have been hired as his Chief Economist. It will be very strange for Calabria to depart from this view. But it is yet to be seen if he, as part of the new Administration, will too continue to break the law.

Opinions like yours puzzle me. For one it implies the same reasoning with these men as to why the govt will screw us - they're all unscrupulous and have zero constitutional or righteous bearing. They're all in for themselves. Two, the conviction should be that, since nothing similar to this taking, on this scale anyway, has ever been perpetrated by a US Govt, it's not gonna happen this time either, regardless of support, or lack of, from Berk, Paulson, Mnuchin and Trump. All they mean to the big picture is a presumably faster resolution, which is convenient and all, but in the end the same result will be had. I've been accumulating for 4 years. I wish I was a great trader but I'm not so they all sit in my accounts. Going nowhere. What do you make of the recent Perry ruling? Having been in this trade for a long time and having followed Calabria I believe: a) He has a reading of HERA 08 closer to what the understanding of shareholders is. b) Understands that HERA is the new law the regulates the entities and is comprehensive. c) Believes HERA has created the ability to "receive" the companies which did not exist before and is the *big* change. d) Has stated the role of Treasury to be that of a creditor, therefore the NWS as part of a reform maneuver was an overreach. e) He may also believe shareholders should have been wiped out via receivership. But that they weren't, therefore their rights have endured. From his body language in past interviews I always got the impression he was never comfortable with the fact that shareholders had survived but was willing to admit they somehow did, almost by mistake. Over the years, I saw him becoming more moderate in his approach and more open to shareholders' claims. But nobody can really assess what a Trump/Calabria may believe or do now.

Too late. If we were placed in receivership the preferreds would be pennies and I wouldn't be here. But we weren't and there's no cause now. Other than that, pretty optimistic stuff. The word is getting out how wrong this is. In receivership, the liquidation preference of the preferred shares gets triggered. :)

So what is GS's plan for the GSEs?

But Williamson is correct. They had enough time to decide on the merits of the sweep. If for principles, it will make no sense to take a sweep now and nothing in June and thereafter. As for forks, any fork will be a sea change.

I used cost of equity as these are non cumulative dividends coming from net income. Not that any of this is happening but at least can be compared to other investments this way Goldman has a valuation of $32 for either fmckj or fnmas. I thought investors just misread what Goldman actually said? "Goldman weighed in on GSE's, issued a note stating $FNMAS could trade $32's with a 8.25% coupon when all is said & done". What did the report say, exactly?

I used cost of equity as these are non cumulative dividends coming from net income. Not that any of this is happening but at least can be compared to other investments this way Goldman has a valuation of $32 for either fmckj or fnmas.

Good remark, orthopa. Everytime there was a "las vegas" euphoria we know how it ended.

In a recent interview, Millstein was asked about the GSEs and conservatorship and he said the only thing that can work is the line of least resistance, which for him was a) recapitalize the entities, b) re-regulate them, c) end the conservatorship.

No. Some of us knew about the connection to Wallison and believed in a 50/50 chance he would favor shareholders. In other words, he was a coin toss. I do not see Mnuchin being connected to anybody who is against shareholders.

Mnuchin has said he wants GSEs to continue without govt ownership and with safety to taxpayers...which says to me rebuilt with private capital. So that seems to me that mnuchin is going to have to come to Ps for settlement in order to clear path for additional fundraising. So while this decision was an abomination it accomplished enough for Ps for mnuchin to understand that he needs settlement to pursue his plan. In line with this I wonder what Mnuchin is thinking regarding the nws as a tool that can be used by Treasury to nationalize companies with the agreement of a regulator, in bailout instances. He has to feel very uncomfortable about it given his stance on bailouts.

As discussed long ago, my concern is do they amend their claim and/or focus on ownership prior to the NWS allowing major prfd P's to settle while everyone else who purchased after the sweep gets screwed. I have less and less faith that any of the litigation is going to help us. As said in the audio, typically conservative judges respect property rights. The question is does the admin respect property rights enough to protect shareholders despite court cases. It seems to me the admin needs some cover in order to make a settlement that benefits shareholders and I can't understand why the Sessions DOJ continues to follow the Obama obstruction theme. Only silver lining in this is that I invested solely on the premise we would win the litigation. If HRC had won, I think common would be at a $1 or less and prfd close by. after listening to that podcast I believe the plaintiffs would beg to settle now. but what's in it for the govt to settle since likely the other apa / injunction cases march ahead? the real settlement is a political solution where everyone wins --- sweep stops, sr preferred canceled, warrants utilized in some form, capital is raised, the companies are reformed and after some time released. also the plaintiffs would be crazy to want an en banc review, based on this podcast, a waste of time and money imo. just move on with the breach + takings claims, watch the other apa/injunction claims, and hope for supreme court on apa if political avenue stalls. edit: at these prices the main arguments for holding preferred over common are dilution and liquidation imo. courts, not so much, at the moment, unless you bought a long time ago. Given last night's speech referencing government-private partnerships to invest in infraestructure it is critically important that the nws gets somehow dismantled. Not necessarily the current suits or the hedge funds. But some 3rd party. For silver lining how about this. The narrative is that government has won and hedge funds lost. Period. Even if Mnuchin recaps and many make tons of money, the story and the narrative will still be how hedge funds lost :) Not a bad outcome.

Uh.. thank you for this! It looks like it's the real deal since he mentions liquified natural gas. John Paulson had/has a large investment on LNG and was involved in Sabine Pass. Between the lines... he mentions these: a) Mnuchin and Cohn as key. b) and this paragraph: "Overregulation and the collapse of the private mortgage securitization market have restrained the recovery in new home construction—which helps explain why, although new home construction has risen from its recent lows, it is still far below its previous peak and below the average level of housing required." a) + b) means only one thing: privatization of Fannie and Freddie and opening the market for animal spirits. To note, he also has a large investment on ESNT which is a PMI (with offshore headquarters and ran into trouble with Jack Lew). I simply refuse to believe these guys won't be able to accomplish what they are after.

Can't believe we are quoting infowars on this site but I have to admit it's a good link. Too early to tell but this could be part of the narrative shift. I would watch for this to appear on breitbart. It takes time for a new Administration to build their cadre of bloggers, journalists, oped specialists, news reporters, analysts, etc. An NPR program last week where an ex-Obama media person was interviewed, disclosed how this very formal process works, how much is needed and how influential it can be. The ex-Obama person said Trump's A failed to work on this during the transition period, therefore the shower of Exec. Orders was wasted. She said before any action taken, the reinforcing megaphone must be in place for changes to be effective. We have just seen a new person from Bloomberg with a favorable reporting regarding Mnuchin becoming amicable to shareholders. Now this. Perhaps, it is all part.

Both Mnuchin and Munger disagree with him. In fact Mnuchin wants to do the opposite The prior administration was more on the same page as Buffett, but not this one This sounds right. Obama was doing Buffett's bidding. Then, when it was known Sperling would be in charge of housing related issues for HRC Buffett supported her. Now, he is out of friends and needs to do the bidding on his own.

They are not perpetual. Leaving them alone will be the easiest. But politically controversial. I believe the conservator can only terminate the conservatorship once it deems the companies fully capitalized.

because they need to raise 75-100bn of equity and preferred only gets 20bn = big hole. therefore, it's essential to clarify the terms which is the likely scenario. the lack of respect for mnuchin and cohn's deal expertise is surprising to me -- these guys are animals to have climbed to the top at GS. Quite the opposite. Their expertise and ability to creatively arrive at a solution that I am not capable of thinking of that a) benefits taxpayers b) helps his buddies c) screws me is exactly why I'm considering selling. right --- if you think his goal is to screw common, then getting out makes sense. I just strongly disagree that's his motive. when there is combined 150bn+ of equity value and currently the combined common and preferred shares are worth $5bn and $10bn respectively, I am betting there is excellent room for both of those #'s to move higher and STILL give the taxpayer and new equity entrants a piece as well = balance in a highly scrutinized transaction. if the share prices were higher then my view is more dangerous. but the valuations are so low. This is possible with Jrs. taking a cut and the government offering a decent strike price that leaves room for the final count of common shares to still run. Only way to get some money back to the taxpayer.

i am not sure i follow, quite frankly. but let me ask you this question: let's say fnma has 1B shares of common outstanding, then issues another 1B shares to raise more money. does govt's warrant position go from 4B shares to 8B shares? Commoners, don't panic. Every time there is a dilution mkt cap increases. We are recapping, right? That is the goal in this conversion. How much common gets will depend on the strike price at which the government converts. Which will also determine how many commons the Jrs. are converted into -respecting their liquidation preference-. But to make it short, if Jrs. are converting at liquidation preference that adds approx. 37 billion in mkt capitalization (regardless of the share count which depends on strike price). All it matters is the share count determined by the strike price set by the government. It does not matter who is diluted first or if warrants are diluted last over a total of Jrs.+commons. Sharpen your pencils. If government converts today at current price $3 for Fannie, it will add 8.33 shares from Jrs (or 16.66 for the 50s) and it will add 48 bill shares to set a mkt cap of apprx. 156 bill. No upside for the common. But Jrs. get their full value. This could be a worst case. If government converts at $20, commons get $20, Jrs. add 1.25 shares to the count (2.5 for the 50s) and government adds 7+ billion shares. Rounded up numbers and double dipping (exercising warrants AFTER jrs. are converted). The problem here is that Stegman, in this scenario, is correct. Treasury is injecting almost all the capital (remember? at the expense of the taxpayer). And who will buy Treasury's shares when the upside has been realized at $20 strike? To improve this equation Jrs. must be converted at less than liquidation (less share count on first dip) and strike price of government at a lower price.

Then, one has to ask... can Ackman be that idiot?

This was expected. Just like Hank Paulson said nothing before the take over, Geithner said nothing before the 3rd A and Jack Lew said nothing, ever. The important facts are: he met with Watt and Hersanling and assigned a team to work on issues. This is different than previous Administration laying it on top of Congress. Mnuchin continues to be consistent in his views that 8 years is a little too much to wait for reform. Unfortunately, all we have to go by is what he said before he was confirmed. Next move will come when we least expect it. I imagine it will be fine for equity.