Luke 532

Mulvaney to be Chief of Staff, no longer acting Chief of Staff https://www.politico.com/story/2019/03/19/white-house-mulvaney-acting-chief-staff-1226055

Hmmm, why "in next 2 weeks"? Is there anything important happening around the end of March that might need to be changed or amended? :-)

For what it's worth... @CGasparino SCOOP: @WhiteHouse pushing expedited Senate confirmation of new FHFA Chief @MarkCalabria in next 2 weeks to jump-start GSE reform; Calabria likely to take a “scalpel” to GSEs reducing footprint in housing mkt seek Congress approval before ending conservatorship more @FoxBusiness

I didn't realize you created a thread with that topic. I agree that's a better place to discuss. I'll look for it.

Muscle, with all due respect, this comment scares the hell out of me. Fundamental analysis studies a business and what is really happening which leads to a rough estimate of what a business is really worth. Opportunities arise when the temporary stock price provides an arbitrage situation. Fundamental analysis is a weighing machine founded on logic. Technical analysis gives the same weighting of importance to Company A with 10 billion in assets and 1 billion in liabilities as it does to Company B with 1 billion in assets and 10 billion in liabilities... and that weighting is zero importance. Technical analysis doesn't care whether a business is good, bad, a fraud, legit, etc. It relies solely on price action, momentum, and predicting when the next guy will hit the buy button or the sell button at some level of support or resistance. Technical analysis is a voting machine founded on emotion. I hope you don't take this comment the wrong way or personally, but it seems lately you've been singing the praises of technical analysis quite a bit so I just wanted to pump the brakes a little bit.

I can't believe I'm about to mention Charles Gasparino. I can't stand financial TV personalities, but even he is saying Calabria will end the conservatorship on his own. https://twitter.com/CGasparino/status/1100803600631115776 The market is really missing the boat on this situation given the pricing of prefs. But, then again like I said earlier, emotional factors and investor fatigue has likely taken a toll on many.

Logically speaking, there exists next to zero reason to avoid the preferred shares at this point in the game. There are emotional reasons, investor fatigue, opportunity cost of missing other investment opportunities for "only" a double-triple here, etc, but those arguments don't come close to counter the bull thesis.

SFIG Speakers Expect Administrative Reform of the GSEs. Capital Build? Yes https://www.insidemortgagefinance.com/imfnews/1_1553/daily/SFIG-Speakers-Expect-Administrative-Reform-of-gse-1000049710-1.html Not a long article, but here are two excerpts... “Clearly, there is going to be some kind of capitalization of the GSEs while they are in conservatorship,” said Michael Stegman, a senior fellow at the Milken Institute. Speaking at SFIG, Landon Parsons, a senior advisor at Moelis & Company, said the GSEs need roughly $150 billion in capital, which he said could be established through new issuance of stock and by allowing the GSEs to retain earnings.

Just FYI, he said it on January 17th. It's been two days short of 6 weeks.

Snarky, rros, orthopa... thank you for posting those recent video links. Good stuff!

https://www.insidemortgagefinance.com/imfnews/1_1546/daily/fannie-freddie-recap-and-release-moves-closer-1000049582-1.html After listening to some of the testimony by FHFA nominee Mark Calabria Thursday and then seeing trade group after trade group show their support for the director-candidate, you came away with the sense that he’s got the job. It’s just a matter of when… Now comes the big question: What will Calabria do to Fannie Mae and Freddie Mac? What probably sealed the deal for his confirmation was his declaration that he will not reduce mortgage loan limits, an edict that warmed the hearts of the National Association of Realtors and other trades. On Thursday, NAR was among the first to issue a press statement in support of the libertarian economist and then all the others fell in line… So, this is what might happen next: Calabria will pow-wow with Treasury Secretary Steve Mnuchin and Senior Counselor Craig Phillips and come up with a schedule whereby the GSEs will be allowed to retain more than the $3 billion maximum capital buffer they are allowed to have now. But how much? In 2018, the two earned $25 billion. If they’re allowed to keep all of it, in say six years’ time, they’ll have enough of a cash cushion to be released from conservatorship purgatory… Unless, Treasury decides to exercise the option it owns. If so, recap and release will happen more quickly. Of course, there’s Congress to think about…

Good point. Didn't mean to mislead, just typing as quickly as I can while listening to this hearing.

Van Hollen (regarding Otting's comments): "You don't know of any plan, correct?" Calabria: "Correct." That's concerning.

Haha! Tillis basically said I don't think Congress will be able to get anything done and I'm looking forward to what you (Calabria) can do.

+1

He more or less punted when asked what he thought of Otting's comments a few weeks ago to FHFA staff. He said he thought it was just a pep talk, that he was trying to help with morale. I wish Calabria would have said something better, but perhaps he simply wanted to say nothing at all.

Calabria has said "well capitalized" at least a dozen times so far. Question from committee member: Your thoughts on what Congress should do about this (Fannie/Freddie in general, wide open question)? First thing Calabria said "I believe regulator can make number of changes to make stable footing to minimize losses in the inevitable next market downturn." He has quoted Shelby at least twice (maybe more): "never seen an institution fail that was well capitalized, well regulated, well managed..." More rough quotes... "2 large institutions with zero capital is my concern. Very concerned to have large orgs without adequate capital." "get rid of privatized gains and capital losses, need to be well capitalized." "For any additional capital to be raised requires an agreement." "I support the concept of having significantly more capital at the GSE's."

I think the real question is if the NWS will be stopped, not when it will be stopped. If we're correct on the former, then the latter is small potatoes. And I'm highly bullish on the answer to the former being "yes." In other words, if we're spending more time debating, contemplating, discussing the "when" (as opposed to the "if"), well, that means the thesis is pretty darn strong at this point.

He said it on January 17th. Next Friday, February 15th, is 4 weeks.

I'm certainly not going to put you or anybody else in this discussion on the ignore list! I don't believe in TA, but I do believe in the value you provide to this board.

Technical Analysis at COB&F? Guys...

This isn't him lol I'd imagine so, hence my "if it's a real Craig Phillips account."

Not sure what to think of this (if it's a real Craig Phillips account). He seems pretty motivated to finish this thing... Challenge accepted. Time to get reform done!!!!

^^ Mnuchin comments on Crapo ^^ Thanks for posting, allnatural.

Crapo's outline: https://www.banking.senate.gov/imo/media/doc/Housing%20Reform%20Outline.pdf