Luke 532

No. Much better bang for your buck on FNMAT.

Probably should trade under $1 tomorrow, but I think drops and pops probably land it where you predicted, around $1.50 or so. That's awfully optimistic given Senior Prefs remain and liquidation pref keeps increasing. I think it would be a pleasant surprise if we're not red.

Not sure why that would be good. Neutral I'd say. Could have settled with Trump Admin, didn't get done. Now we have to rely on Biden Admin. Prefs are at their mercy, unfortunately.

Yes, good job summarizing it. I agree. Wonder where prefs trade tomorrow? Being dependent on a Biden Administration (Yellen) is awful.

Excellent point!

You guys should follow Michael Kao. Smart guy. Re: Fannie/Freddie-Day 2 of Shot Clock. Let’s keep things in perspective. It’s only Day 2 of the real shot clock. Tons of reasons why thesis makes sense; SCOTUS backstop if not. Silly to think SM resigns. #HODLTilYouYodel

Not like anybody thought he forgot about housing, but this lets you know he is still at work and thinking about housing even while in the Middle East...

Wait for the news to be published for MM to tell us retrospectively what we should have done based on his signals SnarkyPuppy, I like your, um, snarky response ;)

Probably just people buying back the shares they were shaken out of by Ackerman's story the other day.

Nailed it!

Remember that we're dealing with a business partner that has a mood disorder, most likely bipolar disorder. "Mr. Market who is your partner in a private business... the poor fellow has incurable emotional problems... At other times he is depressed and can see nothing but trouble ahead for both the business and the world." -The Intelligent Investor

"I am the way to a PSPA, the truth is NWS ends, and the life of Fannie/Freddie is rejuvenated with a capital raise." -Mnuchin 5:32

The plan is sitting on Mnuchin's desk right now ready to be signed. More: Wall Street bankers tell @FoxBusiness that the framework is on the desk of @stevenmnuchin1 and it has input from @MarkCalabria. No immediate comment from @USTreasury or @FHFA. Unclear if and when it will be released cc @FannieMae @FreddieMac $FNMA $FMCC will discuss at 345

SCOOP—Wall Street bankers have met w @USTreasury in recent weeks to discuss GSE reform including creation of a framework for eventual recap and release from conservatorship. The framework could be announced through an amended PSPA or regulation $FNMA $FMCC more @FoxBusiness 345

That latest Bloomberg Intelligence piece sure reads like they are expecting a significant (if not full) write-down of seniors. See Bloomberg Intelligence's take attached... More just now from Bloomberg Intelligence... 1. Treasury's Stake Is Key Variable, Not Conservatorship End Key Points: Lack of contemporaneous consent order doesn't affect timeline of ultimate exit from conservatorship, in our view. 4th Amendment still "likely"; scope is now key question "You need to raise third-party capital and you need to retain capital. That's, to me, the issue." "the Trump administration is likely to allow Fannie and Freddie to retain more of their own earnings, Mr. Mnuchin suggested" Additional Reading: "Fannie, Freddie Privatization Decisions Likely to Be Left to Biden Administration" ​​Fannie Mae PSPA Treasury Secretary Mnuchin's Dec. 15 acknowledgement that third-party capital may be necessary for Fannie and Freddie to exit conservatorship suggests to us a fourth amendment in which Treasury substantially writes down its senior preferred stake, albeit with additional compensation either in the form of more common equity or an ongoing fee. Mnuchin's comments highlight the uncertainty remaining in a process driven almost entirely by a single decision maker. Both a full writedown of Treasury's senior preferred stock liquidation preference and a simple agreement to allow the companies to continue retaining capital offset by increases to the liquidation preference lie within the scope of Mnuchin's comments. We continue to believe the administration will achieve a substantial fourth amendment. (12/15/20)