Luke 532

Zachary Warmbrodt ‏Senate Banking Chairman @MikeCrapo is releasing a housing finance reform plan today that would make Fannie Mae and Freddie Mac private companies, overhaul FHFA and establish a new “Market Access Fund” to address affordable housing. More details @POLITICOPro

Andrea Riquier Anyone else hearing that Senator Crapo is going to release a #GSE plan this morning? It would be funny if he introduced a bill that was essentially the Moelis plan. I doubt he would, but if he did then he gets credit for it, Admin gets what it wants, everybody wins.

It seems he is clearly stating who is in charge and who is essentially along for the ride.

New -- Otting responds to Maxine Waters, Sherrod Brown: “As we begin the journey of evaluating the Enterprises and developing a framework for ending conservatorship, I would welcome your insight and perspective." Doesn't get specific re plan.

I don't think it's clutter and I'm probably not alone. I appreciate the conversation taking place and hope it continues.

Agreed. Good post, Snarky.

Tim Howard comments... Note that “working with Congress” does not mean legislation; that remains a “bridge too far” in the current divided, partisan and dysfunctional Congress. And Treasury Secretary Mnuchin has repeatedly stressed his desire to consult with Congress on any administrative reform plan he proposes. As recently as December 18 of last year–at Bloomberg’s offices in Washington–he said, “I would like to get [Fannie and Freddie] out of conservatorship, My preference would be to do something that has bipartisan legislative support [note the use of the word ‘support.’] There are changes we will be able to make with a new director at the FHFA.” The letter to Otting from Maxine Waters and Sherrod Brown last week very likely did result in the renewed emphasis this week on the “working with Congress” aspect of the administration’s plan, but other than that I don’t see much sustantive difference between where we were then and where we are now. I think the pro-Fannie and Freddie crowd got a little too far over the tips of their skis last week, and the pro-bank side is now working to sell a counter-narrative. We should all take deep breaths, sit back, and wait to see what the administration actually comes up with. https://howardonmortgagefinance.com/2018/12/03/the-interested-parties-respond/#comments

I think this is probably the most important part of the article:

Well, it is written (at least in part) by Joe Light. "with assistance by Joe Light"

It's likely just political theatre.

My thoughts exactly. I bet Otting still stops the sweep in the plan that will soon be revealed, but Admin works with Congress on some of the other details.

*TRUMP ADMIN TO UNVEIL FANNIE, FREDDIE OVERHAUL PLAN SOON: DJ *DJ CITES WHITE HOUSE SPOX ON FANNIE, FREDDIE PLANS: DJ *WHITE HOUSE TO WORK WITH CONGRESS ON FANNIE, FREDDIE CHANGES:DJ

Just a Mark Zandi hit piece floating around out there.

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. ;)

+1

This... ...is connected to this...

Do you mean "Holy Spirit"? Forgot two asterisks. :-) Agreed. The plan is largely in place and they're ready to act on it. Yes, sure seems that way. I am curious what that would mean for common shares. I only own prefs and have no plans of owning common, but I am curious. I think it just depends on how closely the Admin plan lines up with Moelis.

https://www.politico.com/story/2019/01/24/federal-housing-finance-agency-overhaul-1111874 White House will announce a plan by next month to end government control of Fannie and Freddie, per a recording of FHFA Director Otting speaking to agency staff. Significant headway expected within 6-18 mos. WH doesn't think it needs legislation. “This is a path that's been established by the White House and the Treasury, and Mark has signed off on it. I've signed off on it," Acting FHFA Director Otting told staff on plan to release Fannie & Freddie from govt control.

Two orders. Look they went at the ask. current bid/ask 15.80/16.00. 270k @ 16.45 270k @ 16.60 They had to have it. They got a good deal at just 33% of par.

Half a million FMCCL changed hands this morning. Haven't seen that volume as long as I've followed it. Only about 5,000,000 shares outstanding.

I got to the 16 minute mark and then it crashed. Can't get it to start up again. Probably a lot of people listening to it at the same time.

Oral arguments up: http://www.ca5.uscourts.gov/OralArgRecordings/17/17-20364_1-23-2019.mp3

5th Cir investor suit development. Democratic legislators filed an #amicus arguing @FHFA is constitutional but neither plaintiffs or government defendants take that view. Amicus appears to want to avoid precedent impact on @CFPB. Settlement may be only way to avoid precedent.

Use COB&F to gather information, develop and/or test your thesis, compare alternatives, etc. Then make the decision on your own. You should know this, but I want to offer a gentle reminder to avoid asking strangers on a message board what to do ("should I buy X, should I buy Y"). Personally, whenever I'm studying a company and have the urge to ask somebody "what would you do" I know I'm in over my head and I don't invest in it. It takes a certain degree of wisdom to know when you don't know. I hope that makes sense.

Those looking to initiate a position or add, don't sleep on some of the lower dividend prefs. FMCCL, for example, still trading at 30% of par. Although I might just be talking my book. ;)