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OT Did Sen. Elizabeth Warren really stand up and applaud when Trump said the US will never be a socialist country? I need new prescription glasses.

Thank you. I admit, I know less than many here on Buffett, value, legal issues and even real estate/mortgages. I am happy I can read/learn from all here.

My view on technical analysis has always been that it only works if enough other people think that it works. Enough people and enough algos. And for this reason ignoring it might be a mistake. (Sorry, messed up the quote thing)

Ah... some of us may just be in the ignore list. Don't worry. But seriously, to give credit to TA... price formations only reflect behavior patterns of participants. The ones above show indecision. Which we as well seem to have. One day we are bullish, the next we can't take it anymore.

You are out. Might be negatively biased. I am in. Maybe positively biased. So I see a high level bull flag, a top level triangle forming like the one formed from 11/16 through 02/17 after which prices broke to the upside. Which may mean another 4 weeks to go before we see any direction.

I think the value of Crapo's outline, for us, is that it may help keep any opposition laying low. Not the purpose of his proposed reform bill but one of its consequences. Under this outline, there may be less resistance if Otting/Mnuchin move aggressively to recapitalize the companies as long as there is the belief that Crapo's is in line with the WH or vice versa.

I am not sure what hurdles he is referring to. A Democrat House? The MAF can surely be an area of negotiation where Democrats may find relief or ask for what they want. Note the outline validates the Trust Fund and the Capital Magnet Fund from the get go. As for the rest, the explicit guarantee and the added competition are also in line with Mnuchin. Are they not? In my view, if this pacifies the spirits we move forward from here and continue to be money good (Jrs.). This year.

Bright was Corker's man. Maybe he did not just leave but was asked to. Ackman, in the past, floated the idea of selling parts of FF to fund their recapitalization. Given the shrinkage and breakup of the duopoly, this seems to be the result of some backdoor conversations with many participants including private investors. I see Calabria, Mnuchin, Powell, and even oponents liking this. And this would be inline with the original idea of Jim Millstein, Berkowitz. I can't see any desire to hurt the Jrs. under this plan even though nothing was said about legacy shareholders. Is it implied that legacy owners will own the guarantors? If recapitalized by selling multi-family and the CSP, how much money that will bring in? Could be that the Srs. can be let go then. Warrants too? There is a little bit for everybody here and Democrats will surely like this. This outline is very concise and to the point. Looks like TH believes this is DOA. Is it?

Thanks. Will that money count as part of their recap? No multi-family should help with their risk-weighted capital levels, no? Does that leave all commercial banks out? . If sold, those funds will also go to the companies and add to recap. So this breaks up the duopoly, shrinks size of Fannie/Freddie and makes them private guarantors. If Ginnie Mae ends up w/ CSP those securities may get the explicit, paid-for gov guarantee. Perhaps.

Looks like Roscoe signed off on the plan too :) Thanks.

Agree. Extending gratitude to Bruce Berkowitz and all the other hedge funds.

watt would have said, hey babe, it's up to you Exactly. Otting's may have been eyebrow-raising to the dems.

Imaging how different Watt's response would have been.

I wonder if the framework will be different than a blueprint. More emphasis on affordable housing goals?

I don't think it's clutter and I'm probably not alone. I appreciate the conversation taking place and hope it continues. Yes, not clutter. Thank you for adding these scenarios. IG's is quite probable in that a negotiated settlement will require everyone to contribute. A 40% par cut is a pretty big chunk for us.

You may have information I may not or you may hear things I don't. But from where I sit only the political side is not easy. The technical one is simple to solve. Politicians ultimately will not shoot themselves in their feet. At some point, all will come to the understanding that the Srs. in place are a major roadblock to move forward, on any plan. I can't find one reason why anybody will risk their money with that sword over their head. The govt has made ~100bn so far in interest / profits. after structural changes warrants might be worth $50-75bn in some out years. I do not believe they would make another $200bn from the sr pref in the potential scenario I mentioned. Rather, instead of owning around 80pct of the pre-new-money restructured companies (from warrants), maybe that ownership stake would be [90]pct, squeezing out the existing common and jr pref, in some negotiated settlement. Why would they do this? in the absence of a court win or legislative blessing, they might a) want to cap the optics of hf returns and b) gain some modest value from the sr pref so that they are not exposed (legally or politically) to wasting taxpayer assets. I do not understand this math. If they end up owning 90% of a 200+ bill mkt cap investment, doesn't that mean warrants+srs will be worth $180+ bill in common shares that they could possibly sell around this value? Or your belief is that they will get rid of their stake way before companies reach that valuation?

You may have information I may not or you may hear things I don't. But from where I sit only the political side is not easy. The technical one is simple to solve. Politicians ultimately will not shoot themselves in their feet. At some point, all will come to the understanding that the Srs. in place are a major roadblock to move forward, on any plan. I can't find one reason why anybody will risk their money with that sword over their head. The nws, its concept, is antithetical to capitalism. It is at odds in an essential way. The PSPAs were already bad as they were originally structured with no possible redemption of the investment. As much as Congress likes to have these companies chained one day they will realize that this has been the issue all along. Maybe that day, some Administration will simply act.

Banks may be exerting high pressure preventing all going by the wayside (for them). So Congress involvement may have bee added at the last minute. It doesn't seem it was part of the original plan. I kind of believe Otting's words. I can see Admin marching on, stopping the sweep and allowing capital to flow. Not a full recap. Neither an imminent release. But setting the course. Then, we wait.

This looks to me still like a high level consolidation, no? Before moving higher... like 4Q16.

Good luck. Before we know it, we will be adding 1 page per week to this thread. Instead of 3 a day. True, because when it's at par many of us will sell and leave. ;) Oh, well... it's going to be Emily and me then... discussing what to do with our dividends :)

Good luck. Before we know it, we will be adding 1 page per week to this thread. Instead of 3 a day.

Little OT, if I may... Could anyone share Seth Klarman's last letter to shareholders if been able to access it, please?

I haven't seen this before. can you provide a copy of the actual full email? Yes, completely new. This changes the picture slightly (for the better). If DeMarco saw no death spiral coming, why did he agree on the 3rd? And why he went along with the narrative? Does this reinforce the ultra-vires argument? Are his actions becoming fraudulent behavior? Proof that Geithner's Treasury was completely in charge? Would love to see Miller's answer. Treasury had the FULL picture, no doubt. Just a bit earlier (or after, can't remember) Susan McFarland told Miller of the 50 billion in windfall profits coming in 2013. From her own oral testimony, if you all remember. Are these really new documents? I cant imagine someone is just releasing these now. Who? Why now? Maybe not new. I personally haven't seen them before. Neither have I seen them being referred to in any of the lawsuits. Looks like they may have been up on that site for a while? Don't know...

I don't know as much re Buffett as others here. But a pound of flesh is what he got historically. Which means if preferreds are in play and Srs. may go he could ask for perpetual and cumulative. Which might give the Jrs. a little less value.

The SP has always been treated as an "investment" by Treasury. This is why the charters were modified prior to the PSPAs. And that was the only involvement by Congress. The one other involvement was the Jumpstart Act tying Tsy's hand, which expired. Other than these 2 instances SP and warrants are all about the PSPAs and its amendments. I embrace the skepticism of Seahug but as Chris said the political landscape has changed and Mnuchin has placed key people in key positions. Including Mulvaney now being Chief of staff which adds to the tailwind. Not that the hedge fund vile couldn't be revived but as long as affordable housing goals remain untouched, Democrats will go along. I think this is their only concern. In that regard, Otting was supportive of CRA and Mnuchin implicitly OKs government support through his stance on the 30y mortgage. So in a way, issues appear in alignment. It is too late to stir any kind of opposition. In my view, this will be avoided as trying to prevent further delays. So the simplest solution will prevail. And the simplest math.