Luke 532

At this week's @MITgcfp Future of Housing Finance conference, @MarkCalabria stated that @FHFA will release mile markers that indicate when capital is enough and sufficient, and said that "we as an agency need to be ready." Sounds like a consent decree to us! #GSEs

Just PSPA around Thanksgiving.

From somebody that has connections with high-level officials at UST and FHFA.

Word on the street is that PSPA is coming around Thanksgiving.

Bloomberg Intelligence (Ben Elliott) on Biden win/utility model/cap reqs attached...

Nevermind. ACG just told me they posted this erroneously.

Hmmm, interesting tweet from ACG... Full remarks from @MarkCalabria at #FSOC. Says they found adequate capital could be materially less:

I have reason to believe she is actually much more confident than her publicly stated 80% chance, but I'm not at liberty to discuss details of that belief here in this forum.

LOL, I agree. I made a similar point to somebody earlier today. I understand why they trade where they do, but those prices don't represent the actual risk/reward in the trade. Big difference.

https://files.acg-analytics.com/wl/?id=shIIixOKejR2zEc8DlZsZiDRgmhHAutt 80%+ chance PSPA by inauguration day (if Trump loses)* 95% chance of SCOTUS unwinding NWS (obviously, if no settlement prior to their decision) This equates to a 1% chance that neither happen: (1 - 0.95) x (1 - 0.20) = 0.01. Or, in other words, a 99% chance we either (A) win SCOTUS or (B) PSPA by inauguration. *Note: the 80% PSPA chance was from a few months ago during a call ACG opened to public, but they confirmed this week when I asked that % still valid. In other words, my take-away, pricing of junior prefs represent a severe discount in the market that doesn't represent what is actually happening behind the scenes.

This is beautiful.

SCOTUS December 9th... NEW - Supreme Court releases December argument calendar. Big-$$$ Fannie Mae/Freddie Mac case set for Dec. 9.

Attached is the full opinion... 17-cv-00497-0066.pdf

The reasoning behind the section below troubles me greatly. How can a judge write something of that nature?

I found that particular piece interesting as well and a bit confusing.

ACG's latest (attached) 7-30-2020_GSE_Reform_Timeline.pdf

+1

10% chance, according to ACG, that we lose both in court.

Tim Howard submitted his comment on cap rule proposal... https://howardonmortgagefinance.com/2020/07/13/comment-on-fhfa-capital-re-proposal/

Agree does not raise capital but FHFA put emphasis on CET1 capital in the capital rule and their presentation afterwards. Converting preferred to common is a zero cost transaction and instantly raises 33B. Also once the Sr preferred is gone it puts all shareholders; treasury via warrants, jr preferred once converted, and legacy common on a level playing field going forward. I cant think of any reasons why they would not convert them? Why deal with the headache of paying or not paying a div on expensive legacy jr preferred while trying to build capital? Then how do you sell additional preferred at expected lower interest rates then the jr preferred. Too many headaches. Also makes plaintiffs happy and very likely removes legal overhang, which is a massive impediment to any capital raise.

Excellent!

Capital rule to be published tomorrow in Federal Register...60 day clock for comments is now ticking.

Collins distributed for conference on 7/1. $FNMA $FMCC

SCOTUS Seila Law: @CFPB survives; for-cause removal provision declared unconstitutional. "The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will." $FNMA $FMCC