orthopa

60 days from publication in federal register Thats what I was trying to figure out too. My naive assumption it was already. At the top of the page I linked it says Home / Supervision & Regulation / Federal Register / Comment List https://www.fhfa.gov/SupervisionRegulation/RegulationFederalRegister/Pages/Open-for-Comment.aspx It also lists the Enterprise Regulatory Capital framework under the Rule Making/Federal Register link. Not arguing. Just hoping this all means it was placed on 5/20 and the 7/20 date is realistic.

So far there only appears to be a couple of legitimate comments to the capital rule. Chris Whalen has his comment up now. https://www.fhfa.gov/SupervisionRegulation/Rules/Pages/Comment-List.aspx?RuleID=674 FHFA said comment period was 60 days so that means comment period up by 7/20/2020?

thanks for ROE comp. do you think that because GSEs are so dominant with such large moats (albeit with political risk that likely will never go completely away but should be attenuated once release occurs) that a somewhat lesser ROE would be acceptable? it seems that a bump in g fees is a foregone conclusion given this cap rule. if Biden admin starts, I think it will have its own divisive arguments about what to do with the GSEs and how to react to what trump admin might have done at end of term (GSEs do that to people) but in principle everything that trump admin will have done (cap rule, g fee bump) can be reversed other than a release from conservatorship into consent decree phase. conservatorship requires facts re GSEs solvency that will no longer be true, and I assume the consent orders will have provisions that insulate them from easy revision/termination Raising G fees also go towards Calabrias goal to opening up competition in the Market. I get the fact that g fees going up raises costs on homeowners but even a 2bps raise at today's' mortgage rates only raises the payment $11 a month on a 30 year $100,000 mortgage. If the $11 is preventing you from buying a house then....

A cryptic message? For who and why? Found the price drop in the last week a bit more bothersome than I should have. Still fundamentals have been solidly improving in the last year. My base case is this drags on for another year or so before we find out our status, and I find it difficult to envision how the recap process can move forward without something reasonable being offered to Preferred holders. I have been adding more with the drop. I dont think we wait another year at all to find out status. Maybe for the first round of capital raises. Preferreds status will be known well before then. We finally have a hard/soft deadline in the election and capital levels in last PSPA agreement to push things along. As hypothesized by some I think we do get a "big bang" type announcement. PSPA amendment, announcement of recap plan, exercise of warrants, conversion of preferred to common based on prior 30 day trading range and likely reverse split. I think if Trump loses election consent decree comes right after. If the conversion ratio is right that maybe enough for preferred holders to settle. CET1 only counts common stock so I think any dividend payment talk past or future is meaningless to get out of conservatorship ASAP. With common trading at $2-3 a share preferred holders can extract their pound of flesh that way. Treasury will exercise warrants before conversion so preferred holders not diluted by Treasury. If conversion is going to be main method of value extraction for preferred holders then any announcement affecting price will have to be under wraps until all at once like Citi. As Tim alludes to this time period coming up maybe finally when the benefits of holding the preferred come to be seen. The sources of capital will surely include some of the biggest preferred holders and if the gov is serious about the recap ( hiring HL, MS, JPM serious enough?) then they need the big preferred holders blessing.

I'm literally attaching the graph from your "Florida seems to be doing just fine" tweet and circling June hospitalizations here in case you miss it (#1 and #2 are the phased reopening marked by original tweet)... Again, you do not seem to understand how lagging indicators work. Hospitalizations/mortality move after delay due to the time course of covid infection (weeks after cases which are the leading indicators). Here you see hospitalizations trend down slightly after reopening, then back up in June (due to inherent delay) as expected. Younger age of cases does explain some of decreased mortality (so far) and weather/climate/humidity might help too (though it doesn't help Brazil). However there is a clear rise in % of positive tests, there are too many uncertainties, and this movie has played itself many times before in the same way to be ignored. Bottom line is that cases are shooting up in many states, hospitalizations are trending up, and hospitalizations/mortality are lagging indicators that should not be looked at as early warning signs... How are you differentiating between hospitalizations for medical issues other then covid/post op patients and those only with a postive covid dx and need for treatment? Am I missing this in the graph somewhere? ER vists across the country are up 100% of percent month over month. Are you counting admissions from this and non outpatient surgeries?

https://www.tampabay.com/news/health/2020/05/05/coranavirus-was-in-florida-before-we-knew-it/ At least 26 people who contracted COVID-19 started showing symptoms in late December or January — and at least eight of them both had not traveled and did not have contact with another person infected by the virus. The trend continued into February. “That’s community spread,” said Eric Toner of the Johns Hopkins Center for Health Security. “It’s invisible, it’s invisible, it’s invisible, until it’s suddenly obvious.” "the data show the virus spread silently through Central and even North Florida during January, a time when testing for the contagion didn’t exist in the United States" "“Many of us have long suspected that there were undetected cases in the U.S. long before we had our first confirmed case,” Toner said. The new data “helps to explain what appeared to be a sort of explosive outbreak out of nowhere.” We are back to this huh? How can tell how many people had it with no testing? As soon are the testing ramps up, the cases ramp up and you crow!!!!

Real vision today released a new fannie video with Gaby Hefesse https://www.realvision.com/shows/the-interview/videos/a-sleeping-giant-opportunity-in-fannie-mae Anyone have anyway to view?

Well this gives MC and SM just under 5 months to come to an "agreement" on the 4th amendment, finalize the capital rule, and JP Morgan and MS time to come up with a recap plan. You would have to imagine some sort of a recap plan was pitched during the RFP. Sure they are the 2 powerhouses but would they show up to the interview emptyhanded? With preferred trading lower then pre covid the market really is pricing in election risk I believe. Market either doesn't believe Trump will win or MC can get the job done in the 2 months after election. A 4th amendment would go a long way towards assuring investors the NWS is over for good but as cheesy as it sounds coming off the OTC would allow some more exposure to the securities too. Couple of questions for the board. 1. Is losing Selia bad for the preferred share price until a Trump win due to uncertainty of how long MC stays? 2. Does the relist of the securities move the needle and is it done before the "big bang" of consent decree, recap plan that is being hypothesized? 3. Its seems the pace of reform has certainly picked up since HL was hired in Feburary. Does anyone see the final PSPA amendment coming this summer or do MC and SM continue to "negotiate" to the end?

I think he and Mnuchin have been planning for a Biden victory ever since things were delayed last summer. I dont think this really news to any of those that post here since we follow it so closely. If Calabrias' word is to be taken for true its only common sense. The silver lining of this I think is that it may speed things up again. FWIW things like this seem to come out "per sources" as a trial balloon. This has happened a couple of times through Gasparino and he hasnt been totally off with his sources. He is heavily slanted in his interpretation against shareholders via twitter so I tend to focus more on the news then his interpretation. Calabria could take the political angle now that he had to act more aggressively before the election to ensure he follow the law via HERA to release FnF from conservator ship. He could easily say he couldn't let political uncertainty get in the way of the law. This could be sped up real quick once FnF pick advisors. Spend the rest of summer coming up with a recap plan and do a 4th amendment at the end of summer/early fall.

I think you have to look at this from the perspective of why is this even happening at all in the first place? That reason I believe is John Paulson (and those other who are invested/supported Trump pre election). The same reason Mnuchin said the day after the election Fannie was a priority. Did Trump run on that platform and I missed it? Now true its going on 4 years but in the end who does all of work this benefit? The housing system had continued to work under conservator ship. The gov continued to collect $$ under conservator ship via the NWS. There was no reason to change the status quo. No one on either side of the aisle would have said a word if nothing was done. This is being done for the same reasons Mnuchin went from a no name Goldman banker to the Trump finance manager to Treasury Secretary in less in a year. The same reason Mark Calabria was picked to to be FHFA chairman. The same reason that Otting said "everyone signed off on the plan". The same reason why Paulson and Trump have gone mum in regard to FnF both distancing themselves as much as possible. Reforming FnF is a priority for the administration but a priority that the most boisterous President in recent history has completely avoided talking about compared to China, Free trade, immigration etc? Its obvious why. Its going to really benefit people who supported him pre election. Mnuchin did say 3.5 years ago that it would get done during this administration. I still believe it will get done.

Not that this line of thinking is wrong at all but I think this is a good represenation of why the preferred trade at 25-30% of par.

Calabria can talk tough now but in reality -- and we'll know in the next 1 month and 5 months -- Zandi might very have more official impact on FnF's future than Calabria. I wonder why most politicians and reporters avoid the elephant in the room regarding Calabria's likely shortened tenure. It doesn't take a lot creativity to see how this will likely go. If Calabria tenure is shortened measures will be taken to make sure that what is done is irreversable. One other tidbit I thought about was we look to inauguration as a deadline if Trump is not re elected but its likely the March, April time frame if not longer that a new FHFA director is sworn in. The point he made about banks making jumbo mortgages and holding way more capital and their ability to still make money was worth listening to also. I think he will bend some on the capital rule but I don't see him breaking.

Be careful, Survivor. If scenario 1 below plays out things like FNMAP will be awful. Not as bad with scenario 2, but won't do as well as higher div prefs. With that said, gun to my head I bet all prefs convert at same percentage of par (probably 85-100%). I used to own a large chunk of FMCCL but currently I have zero interest in owning the super-low dividend issues due to the reasons below... There is still some good debate on whether the dividend rate will matter. With the recent FHFA presentation it appears as if FHFA really likes CET1 capital and the only way the preferred get there is by conversion. As a result I think there is no doubt that all preferred are converted to common. I hold both FNMAH and FNMAJ as a way to hedge on the dividend and have bought over time when FNMAH was cheaper relative to others. Luke where have you heard/read of your example number 2?

Latest forbearance data shows less people in forbearance programs and as the unemployment rate continues to decrease hopefully that trend continues. If FnF were to release reserves my assumption would be that wouldn't happen till the end of the year to see how things play out with the first 6 month period. Good news none the less as FnF reserved for 15% of loans in forbearance and it looks like it may have peaked in the single digits. https://www.cnbc.com/2020/06/05/governments-mortgage-bailout-shrinks.html

Someone/something is slowly accumulating the preferred on a weekly basis. Each day there seems to be some huge volume in a single issue compared to normal volume. 5 million share block in FNMAT today. Dividend wise when compared to FNMAS its trading pretty cheap.

The protesters seem to be wearing masks and using hand sanitizer, so not sure what your point is. Are you suggesting we continue to tolerate violent, systematic racism? Or are you just advocating for us to "let 'er rip"? Let 'er rip has failed in every country that has tried it: Sweden, UK, Brazil, US (unintentionally). Not sure what my point is? Were you not just arguing that the virus is a minimum 4x deadlier then the flu and that any narrative otherwise is dangerous? You have to be angry as hell these people are playing with fire like this. Secondly what does racism have to do with a pandemic? This thread has been about the pandemic and you have argued very heavily in favor of great caution and the severity of the disease.

i have a question (not so medical) for you: Given the next hypothetical case, out of the possibilities, which would you put on the first line of the death certificate? Listed randomly: -fentanyl intoxication and recent methamphetamine use -partially blocked coronary arteries -COVID+ -partial obliteration of trachea due to an extrinsic knee cap Personally, i would put decaying culture as the main cause of death and perhaps that would trigger a call from a health authority but it would also go a long way in explaining the current state of affairs. I dont know. I just cant believe what we are seeing after the dicussions we have had on this thread and why no one is pissed/scared or a mix of the two.

Based on your criticism of the President and how he handled the virus you must be losing your mind watching all of these mass protests. Remember when he wouldnt send masks to Canada? Seeing these mass protests with thousands huddled together must be driving you nuts!

After nearly 600 pages of handwashing, mask wearing, social distancing pictures, graphs, contact tracers, studies, data, etc Im absolutely floored there isnt more outrage about the mass protests in this thread. This thread is full of people who have pointed out at length the presidents faults in dealing with the virus. These protests and mass gatherings are organized by groups in opposition to the man who said the virus was a joke. Where is the outrage! Liberty has contributed hundreds of twitters links about the virus, mask wearing, hand washing, social distancing rules etc. He must be beside himself.

4x isn't close**. It is a dangerous, BS narrative. CDC "best estimate" of Covid IFR-S = 0.4 CDC estimate of flu IFR-S last year (my calculations)* = 0.095 * 2018/2019 Estimated deaths / est. symptomatic illness = 34,000 / 35,000,000 = 0.095 Source: https://www.cdc.gov/flu/about/burden/past-seasons.html ** And the CDC estimate is low compared to other experts. For example, Dr. Fauci estimates 10x. Source: https://www.cnbc.com/2020/03/11/top-federal-health-official-says-coronavirus-outbreak-is-going-to-get-worse-in-the-us.html My "getting close to that" references the fact that your comparing a virus with a widely available, cheap vaccine and 2 widely available medications to a novel one with neither. So yeah the comparison is BS. Not because its a narrative but because your naively comparing death rates between a treated disease to a non treated disease. We are at 4x worse comparing the flu with a vaccine, some acquired herd immunity and meds to a virus with none. Whats your best estimate for the flu with neither a vaccine, tamiflu, and xofluza? Historically ~40% (83,600,000) of the adult US population gets the flu vaccine and in 2009 during h1n1 the vaccine was 56% effective. One of the higher effectiveness rates in recent time. Let vaccinate 40% of the US population with a corona vaccine (how about we start with the immunocompromised and nursing home pts) and get 2 meds FDA approved showing efficacy comparable to what we have the flu and see where we are. Whats your best guess there 1.5-2x worse tops? https://en.wikipedia.org/wiki/Influenza_vaccine Like I said I think we are getting close to that. **edit Fauci early on also postulated that HIV could spread via respiratory droplets and other then body fluids making it far more dangerous then it was. Point being I would take all early assumptions with a novel virus with a grain of salt. That article is 2 months old.

FnF's capital has nothing to do with the market price of the commons. There is also no guarantee of any price appreciation after said events, let alone enough to get the price above $4 for 30 days to re-list. For all the good news FnF shareholders got in the last 16 months, the price is around 40% lower than it was at the end of January 2019. A reverse split is the only realistic way to get an over-$4 share price to stick, and I fully expect it to happen later this year. Somewhere between 1:10 and 1:20 is my guess for now. Moelis 2.0 is completely unrealistic anyway. Why would junior pref shareholders sign up for a plan that involves them converting at a re-IPO price in the teens (a far worse ratio than they could get right now in the open market), and giving existing common holders a much greater return than the junior prefs themselves? OK, thanks for correcting me nicely. Stupidly confusing market cap with capital, to say the least. Another dumb question on my part. My expectation like many others is that preferred get converted to common. Some have hypothesized a haircut for preferred but if that's the case how is treated for capital levels? ie There is 19B of Fannie preferred par value. If converted at say 80% of par you convert it into 15.2B of common. Does that 3.8B of capital just disappear into thin air? If not what is the offsetting asset that would keep the capital amounts pari passu?

major political risk. mnuchin and calabria might have a plan for the next 8 months before a likely transition but it's sure not apparent to the mkt. The political punt in summer of 2019 - per bloomberg story in july - to post-election for a potential 4th amendment + capital raise was disastrous. No question that took the wind out of the sails big time. Looking back I wonder if it was the capital that they wanted to build. A year and a half before the election is a long lead time to determine to slow things down although the process itself isnt quick by any means.

Hey! Can people who have no idea what the IFR of the flu is please stop saying Covid "is just as deadly as the flu"? Hey! With the CDCs latest best estimate we maybe getting close to that. Keep in mind that the flu has that IFR with a widely available cheap vaccine and now 2 approved medications to treat it. Corona of course has neither a vaccine or approved widely available meds. So looking at it this way if there was not a flu shot available, and no meds to treat it, how high would its IFR be?

To show how crazy the market is last time alot of Fannie preferred traded to the upside at these levels was after Ottings comments in early 2019. Since that time we have had: 1. Calabria sworn in as FHFA head 2. Treasury plan 3. En Banc decision 4. Selia case argued 5. September capital cap PSPA amendment 6. FHFA hired a financial advisor 7. FHFA hired new council 8. FHFA releases capital rule 9. Freddie/Fannie announced RFP to underwrite/come up with recap plan. Still at these levels market not believing FNMA will be recapped or Preferred get more then ~30% of par. Nuts.

One of the daily mailers IMF I think it was yesterday made a comment that 20-40% of those mortgages in forbearance were being paid on despite the status. Not sure if this was overall or per an individual servicer but encouraging regardless. If that is truly the case that provides some upside to reserves that were taken.