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Luke 532

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    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    luke, the "ecstatic" comment doesnt connect with "shareholders who spoke with calabria". this article is very ambiguous and cannot be relied on. even if it were reliable, you still have to explain how we went from "signed off" plan in 2-4 weeks to draft 6 months later, with the key author abruptly resigning before draft is finalizled. basically, you're overreaching. confirmation bias is a b****

     

    edit: this will be my last comment on this matter. my main point is there are much greater risks of plan being derailed than is being talked about here. just my 2c, take it or leave it.

     

    How come you are bearish on this and still hold the position?

     

    One investor being more bearish than another doesn't mean the former is a bear, just means he's not as bullish for the reasons he laid out.

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    sorry to be blunt, but that is borderline delusional. you might say, perhaps I am the delusional one? could be! but i say, always better to entertain disconfirming narratives (esp when coming from experts with insider knowledge like tim howard) than confirming. good luck everyone.

     

    I don't get offended, so no worries on being blunt.  I appreciate your arguments but don't think they are as nearly as plausible as the case for a favorable plan for shareholders being announced and then acted upon.  Again, appreciate your input.  Differing opinions make a market, which is why I have long loved this game.

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    luke, the "ecstatic" comment doesnt connect with "shareholders who spoke with calabria".

     

    Well, sure seems that way unless the author hasn't taken a basic writing course.  Professional writers don't, or shouldn't, go from one type of subject to another type of subject then back to the original subject without differentiating.  It would be an odd writing style.

     

    Spoke with Calabria:

    "Fannie and Freddie shareholders who spoke to FHFA head Mark Calabria this week..."

     

    Later in article... Investors that didn't speak with Calabria, so random investors?

    "Fannie and Freddie stockholders were ecstatic at Calabria’s statements. “It’s exactly what we laid out,” one investor said. “The goal of this president is what can be done administratively. You can see there’s a focus on getting it done.”"

     

    Even later in the article... Spoke with Calabria:

    "But one shareholder said Calabria was firm that an IPO is feasible."

     

    this article is very ambiguous and cannot be relied on.

     

    Of course one single article alone, in a vacuum, can't be relied upon.

     

    even if it were reliable, you still have to explain how we went from "signed off" plan in 2-4 weeks to draft 6 months later, with the key author abruptly resigning before draft is finalizled. basically, you're overreaching. confirmation bias is a b****

     

    Were Otting's comments on the record?

     

    Did you not read about a month ago when it was said Phillips would leave but not until he was done?  It's not like his leaving was in the middle of the night... it was announced at least a few weeks before he departed.

     

    Sure, confirmation bias is a b****, but mere confirmation from those calling the shots is a beautiful thing.

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    how much are you willing to bank on an article that says "Most of the actions could be resolved by making preferred shareholders whole, potentially via a mass “sweep” of profits"?

     

    See cherzeca's previous comments about ABA's expertise (and lack thereof in some areas) and his comments on your point in particular.

     

    edit: it also says investors are ecstatic about calabria's statements, ie his speeches, media interviews, etc. obviously this is no new insight

     

    Talking directly with Calabria was new insight...

    "Fannie and Freddie shareholders who spoke to FHFA head Mark Calabria this week..."

     

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    we know from the leaked remarks made by Acting Director Otting to the FHFA staff in mid-January that there was an administrative proposal set be announced “in two to four weeks” that “really sets a direction for what the future of housing will be in the U.S.,” and that would require raising “probably somewhere, based upon their business models today, [in the range of] $150 to $200 billion.” Something happened to derail that plan, and I believe it was a swift and fierce show of opposition by the banks and their supporters

     

    imo craig's abrupt resignation has to be interpreted in this context. occams razor explanation is that whatever happened to derail the original plan caused him to resign. what happens now, i dont think anyone has a clue...

     

    Well, whatever the plan is large investors are "ecstatic" about it as of June 7th.

    Fannie and Freddie stockholders were ecstatic at Calabria’s statements. “It’s exactly what we laid out,” one investor said. “The goal of this president is what can be done administratively. You can see there’s a focus on getting it done.”

    https://www.abalert.com/search.pl?ARTICLE=183913

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    If we are to take the Asset Backed Alert article as valid, why would investors be "ecstatic" about waiting until after Congress has another stretch of time to work on this?  I don't think they would be.  With that said, don't be surprised if a settlement is announced that says something like "preferred shares will be converted to common at par around the time the IPO takes place... in exchange the lawsuits have been dropped, etc."  Obviously we wouldn't trade at par right away, but then you're looking at merely a discount from par based on (1) when the conversion to common actually takes place, and (2) the market's belief on the likelihood that it actually gets done.

     

    https://www.abalert.com/search.pl?ARTICLE=183913

    Calabria indicated that as part of the effort, Fannie and Freddie would settle a number of lawsuits that investors filed against them after the 2007-2008 market crash. Those complaints stem largely from a series of actions in which the Treasury took control of Fannie and Freddie in 2008 and, starting in 2012, began claiming the agencies’ profits.

     

    Shareholders argue that money should have flowed to them as dividend payments instead. While many of the lawsuits have been dismissed, some still are outstanding. Most of the actions could be resolved by making preferred shareholders whole, potentially via a mass “sweep” of profits.

     

    Fannie and Freddie stockholders were ecstatic at Calabria’s statements. “It’s exactly what we laid out,” one investor said. “The goal of this president is what can be done administratively. You can see there’s a focus on getting it done.”

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    I wonder what happens if congress dawdles and then does not pass a guaranty?  does the capital raising process wait for congress?  for how long?  I would hope the treasury plan has timetables as well as mileposts

     

    I hope so, too.  Looks like that is Calabria's intention...

    "We will continue to engage with Treasury to develop a responsible plan to end the conservatorships – with a clear road map and mile markers – and to adjust the Treasury share agreements accordingly."

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    Prepared Remarks of Dr. Mark A. Calabria, Director of FHFA, at 2019 Ginnie Mae Summit (today 3:30-4:00pm)

     

    https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=Prepared-Remarks-of-Dr-Mark-A-Calabria-Director-of-FHFA-at-2019-Ginnie-Mae-Summit.aspx

     

    Doesn't sound like Net Worth Sweep is going to be stopped in 2019...

    We will continue to engage with Treasury to develop a responsible plan to end the conservatorships – with a clear road map and mile markers – and to adjust the Treasury share agreements accordingly.

     

    And by sometime next year, my hope and expectation is that we will be on the path where Fannie and Freddie can start to build capital.

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    Snarky (and others), how do you think the scenario Snarky laid out would impact junior prefs?  Thanks.

     

    Mnuchin today (attached)...

     

    As others are discussing on twitter, it's interesting that he delineates between IPO and Private Capital.  Private capital could be a rights offering where existing investors contribute (might account for why Berkowitz has been positioning himself so heavily in cash). 

     

    But it could also mean a Buffett or Blackstone sweetheart deal which could be a risk here.  FHFA as regulator can deem current senior prefs repaid while also saying oops you're undercapitalized - and duty to safety/soundness warrants a swift recap - and Buffett/Blackstone put up $150bn in new senior prefs in a private placement with the government. 

     

    What's stopping FHFA from making this deal while FHFA is in control?  Of course this negates the value of the warrants but possible Calabria/Mnuchin don't care?

    FNMA and FMCC preferreds. In search of the elusive 10 bagger.

    in General Discussion

    Posted

    SCOOP: Trump Admin creates timetable to release @FannieMae @FreddieMac from government control; @MarkCalabria seeking reform agreement w Treasury summer's end cease “net-worth sweep” by year's end, poss recap thru massive public offering in 2020 more NOW @FoxBusiness $FNMA $FMCC

     

    How is this a "SCOOP"?  This has all previously been publicly stated by Calabria.

     

    Agreed, it's not a "scoop" but Gasparino has a need to feel like he is the first to discover stuff.  I posted simply as further confirmation that a plan is coming along.  Now, if the timetable is indeed cemented then that would be a scoop.

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