Eye4Valu
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Posts posted by Eye4Valu
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Not even sure a Trump impeachment and conviction represents true downside, as Calabria was Pence's economist.
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Is there a case for damages if the sweep is ended but the principal is not deemed paid?
the current lawsuits would continue to seek that relief
so we haven't all lost faith in the legal system like I have?
Care to share why that is?
Will let you know following decisions in 5th Circuit and Ct. of Fd. Claims
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I think we all see this. But in the best Pavlov fashion we have been trained to expect bad outcomes. In my own case I know I am now terrified of a windfall. Maybe I will even give it away to Corker. Or Stevens. Parrot?
I share the feeling - in addition bad karma from corrupt stakeholders (the opposite of honest and trustworthy management as Buffet and Munger would say).
Not sure you can be considered a "corrupt" stakeholder by owning common or preferred stock. To me, what the government has admittedly done, seems corrupt and along the lines of bad management. Unless I misunderstand what you're saying.
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Many parts of Calabria's paper, written with Krimminger, directly contradict positions that FHFA has taken in the various lawsuits. What does that mean for the lawsuits? We already saw some of this when the DoJ refused to defend CFPB as a constitutionally structured agency, and thus had to take the same stance with FHFA (or did I remember wrong)?
http://investorsunite.org/wp-content/uploads/2015/01/Krimminger-Calabria-HERA-White-Paper-Jan-29.pdf
An example from page 5
HERA requires FHFA to conduct the conservatorships in order to “preserve and conserve” theCompanies and to rehabilitate them so that they return to a “sound and solvent” condition.
Watt's name on all the lawsuits will be changed to Calabria's, right? If Calabria himself had the opinion that preserving and conserving the assets are actually required (and not optional, as FHFA and Treasury have held so far), would he have to either change his stance or stop defending the lawsuits?
I think there will be a global resolution to settle the lawsuits and end the conservatorship. I don't think Calabria or an acting director will immediately drop the lawsuits or change position until they put forward the global resolution. What I wonder is if a 5th Circuit decision comes down before a global resolution is announced, which seems probable.
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I dont think you can reference the stock price as a guide as mentioned before. The prices have been wrong before for nearly every decision/announcement over the past 5-6 years. It was not a predictor of Lamberth, Trump presidency, Mnuchin comments on Fox, etc, etc. It wasn't a guide then and isn't a guide now. Shares for both are in total wait and see mode. Nothing more, nothing less.
I look at it a little differently. The examples you cited were public / binary events where a typical hedge fund couldn't gain an edge with additional research. The current example is likely different, and the hf sharks -- they are smarter and greedier than many here give credit despite their relative underperformance -- are surely digging in their contacts and avenues to see if something like Moelis is in the cards given the enormous upside potential. and the market is saying for now, that's not the case. of course there are some caveats like mnuchin has the tightest vest possible and hasn't started the process yet but i'm trying to be as realistic as possible even though I strongly wish Moelis was implemented for both fairness and policy reasons.
If you want to be realistic, then wait and see what happens. Maybe Moelis, maybe receivership, maybe something different. I think we all understand now that you think a receivership is likely. Thank you for your input. I appreciate the input of others as well. Reality is, we'll all find out what happens at some point in the future. I actually think the 5th Circuit may be helpful in resolving this matter.
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Buy "en primeur" in good years and hold. For example, I bought a 2015 magnum of Chateau Margaux. It has doubled in price from the time I purchased it. Not everything will work out this well, and some even decrease in value, but on average, this is a decent strategy. Downside of it is that you have to put down your money up front and wait approx. 3 years to receive your wine. Only buy from reputable stores. If your budget permits, buying in lots (12 bottles) will serve you better if you sell at auction, where you're likely to obtain the best resale price.
https://en.wikipedia.org/wiki/En_primeur
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the share prices - with both languishing and the common underperforming - are signaling receivership.
it's hard to believe this is possible as the appropriate solution, but at this point the market is telling us what's on the menu.
Wouldn't the preferred be trading much lower if that was the case? I don't think the market is signaling anything.
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mnuchin on the hot seat, per the WSJ. since he cant change the fed pick and the Chinese likely don't take him too seriously, hopefully he feels motivated to accomplish something significant, soon, and fair on housing.
https://twitter.com/realDonaldTrump/status/1066116263649382400
@realDonaldTrump
I am extremely happy and proud of the job being done by @USTreasury Secretary @StevenMnuchin1. The FAKE NEWS likes to write stories to the contrary, quoting phony sources or jealous people, but they aren’t true. They never like to ask me for a quote b/c it would kill their story.
Horse pile coming from the same publication that gave John Carney and Joe Light a job. John, Joe and the Journal, you're fired!!!!!
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I guess he's now the black sheep of the "family" due to the "rogue wave?"
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Purchaser "may"
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You don’t understand, it is a value stock. We should keep holding it till 2028 and beyond. They are saying “let us hide behind ‘congressional action’ rhetoric so that we can finish the two to bankrupt companies, it’s coming with home prices down and we have been successful doing this over a decade and the media is in our side where none of them is reporting the loot”. Can’t fight the city hall, judges are political appointee and know what a wink means.
“White house to address housing finance in near future”, don’t be mistaken, near means another 10 years. They said in 2016, the term ‘near’ many times and we are in 2019 soon. Truth is they love the sweep money : it is sweet and stolen.
Trump voice " you mean to tell me if I do nothing I keep getting all the money, but if I try to do the right thing I lose the money?"
lol what do you think someone like Trump is going to do in that situation?
He'll actually make more money by doing the right thing, which is a powerful incentive for a guy like him. But don't get me wrong, I'm not trying to convince the peanut gallery.
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the BI analysis includes stuff we have been saying on this board for years. sure like it better when I read BI saying it than us! thanks for sharing @allnatural
What's BI? And do you have a read on how plugged-in they are?
think of it this way: Joe light is the JV; some guy writing for BI is Varsity at Bloomberg
Don't know about Joe, but I'd rather be on the varsity team
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The CPPI now stands 26% above its prior December 2007 peak, with core commercial 6% higher and multifamily 65% higher.
Above is a very recent stat on the CPPI as backup to my earlier post -- can anyone think of a technical reason why MF is outperforming so much? (hint it's the same reason no one can afford to go to college anymore).
Rising rents, similar to rising tuition
bzzzzzz wrong.
Bloated Administration
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The CPPI now stands 26% above its prior December 2007 peak, with core commercial 6% higher and multifamily 65% higher.
Above is a very recent stat on the CPPI as backup to my earlier post -- can anyone think of a technical reason why MF is outperforming so much? (hint it's the same reason no one can afford to go to college anymore).
Rising rents, similar to rising tuition
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right because that gives the banks the superfecta referenced previously - they not only want moral hazard on the entity level, which they already have and no one seems to notice, they want it on the securities they create so they can get beneficial treatment for holding those debt instruments and also race to the bottom on the collateral quality in those vehicles because after all it's just another put to the gov't for them so who cares right?
While I understand you're attempting to be level headed about what's happening, you shouldn't discount the idea that this breaks something that is working to move the entire industry into an untested alternative. Currently the beneficiaries of the charters will likely not want to be primed and have a decently sized lobby themselves.
I would also add that it doesn't make sense to put the guarantee on the individual pools, because similar to CRTs, that takes away the ability to spread the risk premiums from an enterprise level and moves it to a security level, which means it will be too lumpy to be efficient and will serve to raise mortgage costs for every borrower.
So while your lamentations about what we want or whatever are noted, there are real structural issues that have yet to be addressed by the MBA proposals, because they don't really care about the details, they just want to kill the roadblocks and those are the GSEs. Read and understand Howard on CRTs. If you have good for you, if you haven't please do. Doing so makes clear that these are 1/2 baked ideas with 1 overarching goal - to get the market. I would also suggest reading Howard's book for background, it is pretty wild even if it's pretty wonkish.
ok, one more...since questions were raised.
i agree it's complicated. but mnuchin was hired for 2 reasons imo: loyalty to trump and to do this.
regarding CRTs, i believe you and Tim howard that they are not productive. they were used mainly by the companies and Mel Watt to stand in front of congress and pretend to say that they were doing stuff that reduced taxpayer risk. in fact, mnuchin doesnt appear to like CRTs -- when asked in a congressional hearing, he chose not to endorse them.
on other things, tim howard is biased imo as a legacy FnF homer. for instance, I cringe when I read things (from others and maybe also tim - i'm not sure) like 'on a cash basis, FnF didnt need a bailout' and there were accounting issues that caused the 2008 takedown. I disagree. the way accounting works for financials is when things are bad you take loan loss provisions in advance of the actual losses coming through. things were worse than bad then, who knew how large the eventual losses would be. I also think the implicit guarantee structure was / is bad. in addition, the securities, with the explicit govt backstop, could have lower yields than MBS pre-crisis when the govt gty was implicit, which rarely gets mentioned and is a potential negative for the big banks. I think mel watt's utility concept is best but apparently mnuchin doesnt.
Oh you disagree? Interesting.
So I know how the accounting works for MBS and I know how impairment works and I know how impairment testing by auditors works. I know how modeling MBS works and CMBS as well. Also corporate CLOs if you want to go there but I don't. I've always been more focused in real estate. I know accountants like to think no one could possibly understand this. I can. I also know how to make those losses look better or worse depending on the desired outcome using modeling software - take your pick but there is Intex, Bloomberg or Trepp.
Have you read this? https://www.housingwire.com/blogs/1-rewired/post/34280-the-three-card-monte-accounting-of-fannie-freddie-conservatorship
It's pure financial obfuscation. Sure maybe some big MMs have phds doing econometric gymnastics into their models but at the end of the day, you're still trying to predict the future and whatever assumptions go into the model will sway the results.
Cut out all the noise and the only thing that matters is cap rates. Cap rate composition is the risk free rate and a spread. When the risk free rate is sustained at 0 for a long time then you will eventually see capitulation and cap rates will drop - and when you have systemic depress of rates for a long time the thirst for yield will drive cap rates ever lower, meaning the risk premium shrinks and puts ever more downward pressure on cap rates and upward pressure on property prices. Couple that with global ZIRP and undoubtedly, you're going to see rampant asset price appreciation - if you look to Moody's/REAL CPPI you'll have seen that post 08 basically unabated.
All that is to say - that the losses projected on the MBS holdings at the GSEs in 2008 were so severe to cause such huge impairment that it didn't come to fruition or ever have come close in the entire history of lending on real estate, so you like accounting so what does that tell you? It tells me that whomever implemented those loss assumptions knew that they'd have to pressure their auditors to accept such an amazing outside of the norm assumption on the fair value of those positions. And did you know that the same audit firm in this case recently settled shareholder lawsuits over this very issue? Meaning that they knew they were going to lose and lose face on what they signed off on. Yay accountants! nailed it.
Now to be fair, the reason those losses didn't materialize is mostly because of the massive intervention by the FED, but that is beside the point. All of those projected losses was subsequently reversed, is not something that you seem to be contemplating in your disagreement. Further they were used as the justification to force HERA down the throats of Congress and the unrepayable loans onto the books of the GSEs.
So feel free to disagree all you want. I would say you're dead wrong. I don't understand the hubris of thinking that you would know better than the former CFO of these companies. Read his book - he's not lying.
Also the banks don't give a flying f about the yields on the bonds, they want the market to generate the fees on the originations to then put the risk of said originated collateral to the gov't. Meaning when their crap loans default the taxpayers would then again be on the hook.
So I think I might have this pegged closer to truth here but feel free to refute points above.
Interesting, thanks blackcoffee
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I am sure the jury charge will be the object of much fighting over wording (if Lamberth entertains those submissions).
I agree that a jury on this file is a nightmare for the defendants.
How long do you think before getting into court for the trial? A poster on SA, who says he is a lawyer, advises that entering the order will take 8-12 months and 6 months for a date after that. That will give us some idea as to timing for settlement. How long for expert reports, assertive and responsive, to be exchanged before trial?
who the f knows...
+1
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My guess is that Emily is probably not even a girl, and is one of several trolls who offer little value on this thread/site. An agent provocateur if you will.
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Let's assume for arguments sake that the Ps actually won one of these cases and had the NWS enjoined. Would that really speed up the time table to resolution here given the likelihood of appeal? Would any administrative resolution be drastically different than what they would put forth otherwise? I'm thinking probably not, but curious what others think.
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Did you all listen to Ackman on the recent conference call? I thought the following point he made was a good one: "What's interesting about this security is it treated really like a litigation security. Restaurant stocks penetrate very much in same-store sales, these stocks are treated really based on people's perception of progress in litigation. And I think that is not sufficiently farsighted. I think litigation will still move -- obviously if there is a -- we have a government's motion to dismiss is defeated. Stock will trade up on that but at the end of the day here you have two of the greatest businesses ever created in very strong dominant positions performing really well and we are a large common stockholder of."
Many if not all of the recent posts on this thread are litigation related. Is it possible that people aren't seeing the forest from the trees here?
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You all make great points. You never know with judges though. It's tough to interpret their questions and comments one way or the other. Case in point..."Salting the Earth" and "Hotel California" comments made you think those judges were sympathetic to the plaintiffs arguments, until they ruled the other way.
as I recall hotel California was willett, who ruled for Ps
My bad. What a classic comment and well thought out dissent by Willett!
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You all make great points. You never know with judges though. It's tough to interpret their questions and comments one way or the other. Case in point..."Salting the Earth" and "Hotel California" comments made you think those judges were sympathetic to the plaintiffs arguments, until they ruled the other way.
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If an equitable settlement can be reached, there is no reason to continue on with the lawsuits as a matter of principle. Fannie and Freddie aren't the first nationalization, and won't be the last.
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Thank you! Maybe we get lucky and get 1 more dissent.And I just found this... J. Willet was on Trump's Supreme Court list. Did not know but members here perhaps already did.
https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-supreme-court-list/
And related...
Hello fine folks! I've been lurking here for a while reading the many fine thoughts of the posters here. Thought I'd say hi and also add to rros' post above that Judge Stras is also on the Trump short-list for SCOTUS and he is one of the 3 judges in the Saxton 8th circuit court. Like many I have been following the court cases with rapt attention and hope that the rule of law prevails in the end. Best to all!
Exactly. A dissent in support of the Lamberth/DC Circuit/5th Circuit Opinions on the APA Claim.
FNMA and FMCC preferreds. In search of the elusive 10 bagger.
in General Discussion
Posted
Agree. Favorable decision there provides the adequate protection I'm looking for.