Luke 532

Brown: "Are you and FHFA/Watt working together to prevent another draw by GSE's?" Mnuchin: "No. My conversations with him are on the dividend... And conversations that we're willing to work with him and Congress on housing reform."

Mnuchin on a question about giving direction to Congress on GSE reform in 2nd half of year: "We'll give a clear outline what our recommendation would be... we will come back with a specific suggestion." It's likely he already knows what he wants to do, he's just biding his time. Whether his plans are good or bad for us remains to be seen.

I think he was trying to talk about when the next sweep payment was due? That would be about 40-45 days from now (end of June).

With him saying he wants payments to continue and wants to work with Congress, he might be trying to slow down the Corker's and Warner's of the world from trying to push something through legislatively. It just seems odd that Watt did a 180 and wants to retain capital when coupled with Mnuchin's comments. If Mnuchin came out and said that he agrees with Watt and the capital needs to be retained then Corker, Warner, etc. would likely be in a much bigger hurry to push things through. Just a thought, could be off-base and perhaps Mnuchin really does want the payments to continue.

He also said he has a strong preference to working with Congress on this issue. Did anybody catch the quote for the 75 day thing? Corker said something about 75 days...

+1... and doing this with Junior prefs makes most of the major/big/important lawsuits vanish. That's a benefit for gov't players like Mnuchin.

He was also publicly critical about Trump 2 weeks ago. He probably realizes his GSE plan isn't looking very likely and he's lashing out as any toddler would when they don't get their way. Two weeks ago...

Steve Eisman, the real life fund manager depicted by Steve Carrell as Mark Baum in The Big Short, disclosed today in CNBC that he owns Fannie stock.

Very brief discussion on Fannie on CNBC today...

Assuming the NWS is paused/stopped in June, what do you all perceive as the major risks going forward for preferred shareholders? I'm intentionally not including my opinion in this post as I don't want to influence thoughts/opinions/comments. Thanks in advance for commenting!

The real Tim Howard on yesterday's hearing (emphasis added is mine)... "I liked the fact that Watt argued and laid the groundwork for suspending Fannie and Freddie’s net worth sweep payments beginning next month. Unlike the March 31 payments, I think the companies now WILL retain the earnings they otherwise would have paid to Treasury on June 30, and will continue to retain them until they build up a capital cushion that Watt feels is sufficient. I do not believe Watt would have been so direct with Senate Banking Committee members about the need to suspend sweep payments to build capital had he not had the backing of Treasury Secretary Mnuchin." https://howardonmortgagefinance.com/2017/04/25/narrowing-the-differences/#comments

I'm pretty sure it's a joke, hardincap.

Wow! Heated debate between Corker and Watt. Typed as I was listening live so please excuse errors... Corker: Lefty think tank and righty think tank coming together. Watt: we've made reforms to enterprises and those shouldn't be ignored. Watt in charge of GSE reform, congress housing and finance reform. Corker: Building capital. Notion of running out of resources is baseless issue, why is it even being discussed. Unilateral step by you when they have 258B in capital right now and drawing on that credit creates a different direction and sends signal to world that something is happening that is not. Watt: I hope you heard the analogy I used, keep them safe and sound and efficient. If risk of draw or reduction in commitment that backs enterprises then the market being impacted if it happens then what we say is foreseeable it happens it won't be you they come to talk about if it happens, it will be the conservator that will have to answer to it. Corker: why don't you draw 10b now to see what happens? Watt: don't need it now. Corker: Do it anyway. Watt: Why take that risk if we're estimating the risk is harmful? It's my responsibility and I will live up to that responsibility as conservator. I can't afford to assume that risk. You can afford to say it's theoretical, I can't. Corker: most baseless argument I've ever heard. Something has happened recently. I don't know what it is. Watt: I'm not saying it's a large risk or not, I am saying I can't take that risk regardless of size.

Watt in open Q&A: "Modest changes to the PSPA's would be the first and most prudent step to address these issues..." Nice :)

Latest from "Rule of Law Guy" Fannie And Freddie: The Net Worth Sweep And FHFA's Next Big Problem With Delaware Law https://seekingalpha.com/article/4071009-fannie-freddie-net-worth-sweep-fhfas-next-big-problem-delaware-law?app=1&auth_param=c78o:1ch3djj:a89883b965abd9e070c6c14e5e1abcd9&uprof=44

It seems he's still using both fix and housing reform terms, but I don't see much difference between the terms. Here's an interview from 2 weeks ago where he says fix, and earlier in interview he said housing reform... Starts around 14:20 mark... https://www.pscp.tv/w/1mnGeEMpZpAGX I may have missed a few words here and there as I typed this while listening... Interviewer: "Have you talked with Ben Carson on those plans?" Mnuchin: "Absolutely. We are going to work very closely with him. Although the major focus is on Fannie Freddie we are concerned with the growth of FHA loans. And we want to be very careful in fixing Fannie Freddie that we don't create a bigger problem at FHA. Whatever the solution we're not going to push down on this and pops up on the other side of FHA. So we're looking at this and working with HUD on comprehensive housing issues to make sure we have liquidity and we have safety."

I'll go through the videos again of where he said it and repost. Perhaps he hired him to be thorough eventhough he knows what he wants to do. And, yes, it might be of interest to him to benefit those he puts in power if they present or find something to him that can be implemented and not alter his plan. I just searched for 20 minutes and didn't find multiple interviews where he stated his expertise, but I could swear he has a few times after confirmation hearings. I've watched pretty much everything he says over the past 6 months but I didn't save everything I've watched. But perhaps I'm wrong on him stating his expertise repeatedly.

I'll go through the videos again of where he said it and repost. Perhaps he hired him to be thorough eventhough he knows what he wants to do. And, yes, it might be of interest to him to benefit those he puts in power if they present or find something to him that can be implemented and not alter his plan.

I believe this is highly likely. After all, one of the first things Mnuchin starts every interview with is "I've followed these companies closely for 30 years..." He might as well say, I'm an expert and don't need help on what to do here but I'm a politician now so I might as well make people think they have input so they can tell their constituents they were involved in the outcome. when has he started interviews that way? i know he said that at his conf hearing but im not aware of any interviews. the fact that he hired craig philips and assigned him to housing reform shows he really is exploring all options and isnt wedded to any one path In multiple interviews he has. Just look at any videos I've posted of him since November and he makes a point to mention it the majority of the time if asked about GSE's.

I believe this is highly likely. After all, one of the first things Mnuchin starts every interview with is "I've followed these companies closely for 30 years..." He might as well say, I'm an expert and don't need help on what to do here but I'm a politician now so I might as well make people think they have input so they can tell their constituents they were involved in the outcome.

"Ultimately, private capital in the mortgage market requires a transparent process that provides certainty and respect for the rights of investors, both in the current framework and in any transition to a future system." ? I interpret the language in the Blackrock proposal as discussing MBS investors, not GSE equity investors. I think you're right.

"Ultimately, private capital in the mortgage market requires a transparent process that provides certainty and respect for the rights of investors, both in the current framework and in any transition to a future system."

Pulled this from the blackrock proposal. They are basically asking for government guarantee to continue with private investors being first at bat to take losses. This could work. What would this mean for existing preferred shareholders?

Corsi at 15:00 mark: "The regulators of Fannie and Freddie are asking President Trump to stop taking the money out of Fannie and Freddie." https://youtu.be/PWNQNf7DCfY I know, I know, Corsi is a whack job (not factoring in Mnuchin's comments possibly confirming Obamacare story) but I wouldn't be surprised to see Watt say something along these lines during his testimony next week. After all, in the past he has publicly stated the law got trumped and the conservatorship can't last forever.

Trump should stop tweeting so much — these 'interjections are harmful,' says powerful GOP Sen. Corker I highly doubt Corker would risk upsetting Trump by saying something like this if he liked what was going on behind the scenes.