orthopa

Seems like maybe gov really is waiting for en banc opinion huh? Or at least giving themselves 6-8 weeks of wiggle room just in case. In the May interview(s) Calabria said he had been negotiating with Mnuchin and had a good relationship. He said he was negotiating the sr preferred agreement and NWS. Looking at the timing maybe this outline will discuss stopping the NWS in time to start building capital in 2020? Would be hard to make a judgement without hearing the audio regarding the 2024 comment but just like Otting, Calabria came in with guns a blazing and things have drawn out.

Explicit guarantee means Congress. If the administration is counting on that then I'm selling everything tomorrow. What I think is more likely is a continuance of the existing implicit guarantee and Treasury line of credit, with FnF paying a commitment fee. This lines up with what was in the presidential memo. The difference is that right now Treasury is only contractually responsible for around $200B of losses, which represents the undrawn money from the PSPA funding commitment. I'm not sure if FHFA and Treasury can legally increase this amount, but it shouldn't be necessary. As I said in my post on Tim Howard's blog (and first said by cherzeca on Twitter), right now we have $6B of capital in front of the $200B line of credit, and after recap and release it would be $150B (or whatever Calabria decides on) ahead of that same line of credit. It's a good enough arrangement now and will be better than good after recap and release. That should be plenty to reassure MBS investors while technically not potentially putting Treaury on the hook for all $5.5T of FnF's liabilities as an explicit guarantee would do. True, I guess what I was suggesting that Treasury would prefer that as part of their working with congress on reform as recommendation. I think that honestly would be Mnuchins preference in the end as he has repeated the working with congress multiple times. We could see both options as the mandate calls for both in its directions. "(A) The Federal Government is fully compensated for the explicit and implicit guarantees provided by it to the GSEs or any successor entities in the form of an ongoing payment to the United States;" Implicit as it is now to get the wheels turning as an admin reform and an Explicit as part of an ongoing reform effort with congress.

Thanks. Here's the clip: https://video.foxbusiness.com/v/6059461043001/#sp=show-clips So we know first part of the plan. A guarantee, seemingly explicit and most likely paid for. The details may conveniently leak from here on out.

https://www.realvision.com/tv/shows/the-larry-mcdonald-series/videos/the-man-who-saved-aig Interesting discussion with Millstein and his thoughts on Fannie, Freddie and Calabria. Starts 21 minutes in. https://www.realvision.com/tv/shows/the-larry-mcdonald-series/videos/the-man-who-saved-aig

I exit the position after the recap plan comes out and I make an assessment of perceived final value after conversion or redemption etc. That is the exit plan. Bad news for me is if FnF is liquidated and the gov, the appeals courts and supreme court tell shareholders to fuck off. I believe we are the furthest from that than any other time I have held the shares. I think your trying to apply a trading plan to an event driven highly sensitive illiquid set of securities. That in of itself would probably exclude it from most rational technical analysis trading plans. As someone pointed out before you cant predict the future and thus the final outcome. This investment has a binary outcome, really bad, or really good and Im pretty sure most of those posting and invested have come to terms with that. As a conclusion an exit plan is not rational with your line of thinking here.

More color based on my previous reply. According to Bloomberg article (yeah I know) https://www.bloomberg.com/news/articles/2019-06-17/craig-phillips-leaves-treasury-before-fannie-report-is-finished. "Craig Phillips, a top aide to Treasury Secretary Steven Mnuchin, left the agency last week before the release of a housing-finance plan he was expected to finish, according to people familiar with the matter. Phillips, who said in May that he was planing to step down, led the Treasury Department’s effort to draft a plan to get Fannie Mae and Freddie Mac out of U.S. conservatorship. Federal Housing Finance Agency Director Mark Calabria said last week that he hoped Treasury’s plan to return the companies to private ownership would come by the end of the month. The White House is reviewing a draft of the proposal, people familiar with the matter have said." Phillips wrote the draft and moved on. Not sure there is much else to glean from that.

All this news deluge does is prove no ones knows any more then anyone else. What else is new. At this point wondering what is taking so long is useless IMO as the possibilities are endless, both good and bad. Can only wait for FHFA capital rules and Treasury Plan. Back to waiting for Godot.

Was just going to post that. Everyone is in the dark, pick a side, place a bet and watch it play out. We seem to be approaching maximum negativity and frustration. The plan must be coming out soon! ;D

The plan was done and he moved on to wall street.

Someone is really negative now! ;) Unless someone is involved in the process directly how do you expect them to give an accurate estimate? Its would be a blind guess and useless. Thus the question is useless. Preferred capped at par at yesterdays prices ~100% upside. So if it takes 3 years 100% in years not a good return?

Lots of chatter/opinions from the "other side" lately huh? As Rosner points out no one is named and and like the IMF article just negative fluff with no real basis. Not much to read into IMO other then there must be a TON of pressure behind the scenes against everything we as shareholder want OR a full court press by the opposition as a last gasp. What I have found interesting is you havent heard/cant hear much from "our side" as those that would benefit greatly surely would be cast in a negative light as part of the hedge fund windfall crowd. Thus all you get is dialogue from calabria etc but nothing else. Let the price goes down, wont affect the end product. Either the plan comes out in a couple months, FHFA capital rules come out soon, the NWS stops this fall, capital build/IPO happens in Q1-Q2 of 2020 or this gets delayed till after the election.

Would like to see cherzeca's opinion. Maybe a delay tactic to hopefully release plan and in turn settle with plaintiffs via stopping NWS and recap but one would assume that stuff would not occur until the fall. Will the en banc opinion take that long? Maybe the gov wants to be in control and not be at the mercy of the courts?

Nice find. Problem as many of us know keeping the preferred shares as they are do not help build capital and time is going to be of the essence. Preferred will convert and in such still protect the rights of the common shareholders.

Could be. I think its more the MBA/Bank crowd that is more of an opposition and causing trouble behind the scenes then congress. Sure things will be quieter with congress on recess but I dont think they are the opposition at all.

I don't recall if I have recommended that book, but I have definitely read that book. You have to be careful with the concepts in Intelligent investors. I don't think it is applicable anymore, and even buffet didn't use those concepts of NAV margin of safety. Munger taught him to focus on the moat. There are countless times when I bought a declining stock, thinking that I got a deal, and it is safe because there is margin of safety, and later some shocking news came out and I had to sell at big losses, which eventually caused me to quit value investing. Even GSE preferreds could be a very good example. There are countless times in this thread where we were really bullish, and stock was going up. Later it came down on unbelievable news. I learned that lesson and changed the way I operate. Most here will not tell you this. Just like my simple, underrated 5 month MA that to this day continues to hold the line and has shown NO sell signal since this last run, here is another simple -perhaps even useful- nugget. To learn, all you need is to be active in the market and be utterly observant. Become a student of the game. Continually and constantly. Along the way read some, hear some as a complement to your own observation. And be prepared to lose about $100,000 of your savings and 5 years to walk through several economic cycles. By far, the largest and most important lesson in this journey is about yourself. What you can safely handle, emotionally and intellectually, together with being patient. Yeah.... But the only problem is that such a slow MA won't be much useful when the tidy turns. It would likely go down 30% before you get out. I do use MA as one of my only few indicators, but only to get the idea that the trend is up. And I strongly agree that "By far, the largest and most important lesson in this journey is about yourself. What you can safely handle, emotionally and intellectually, together with being patient." To just further the TA talk in true market form it appears that the market is trying to price in good news (get in while you can but at the last minute) before the Treasury plan in released. Looking at FNMAS previous highs are within striking distance and the trend is still up. Muscleman my biggest fear trading purely on technicals and on news, esp with this situation is official news is likely to come out either pre market or after hours negating the ability to get in and enjoy the updraft. We may get a politico or WSJ warning like "plan coming this week" that will juice things a little but if this plan contains anything of good substance for either common or preferred then the only meat left on the bone maybe time value to expiration for when the plan goes through. It very well likely could be completely vague again with discussion of an upcoming capitalization plan in the fall or something and if the end game truly is par for preferred then one would think there could be a bump with the upcoming plans' release, a bump when the NWS is stopped this fall/winter, and then when the recapitalization starts. What will be really interesting to me is to see what the market guesses the common to be worth with each of the above developments. Think about what has transpired since the end of Jan and the price of the common has gone nearly sideways. One would think it would also jump with each development but until the final capitalization plan comes out it could easily trade sideways. I mention it only bc of conversion value. At some point if not already conversion value needs to be determined and I believe the longer it takes the plan to come out the better the rate will be for preferred as the negotiating holders will simply say look at what the market is tell you. There could be a clash here with the IPO price but the market will immediately price that in once known so maybe its a moot point.

Of course the more specific the plan the better. The memorandum calls for liquidity requirement recommendations which may give a glimpse of what the capital raise may look like. That would more likely reflect on common price and assumption of dilution. The market may bid up the preferred once a road map is established as those who are impatient will feel more comfortable laying down money for a more concrete future. If the plan gives windows or aspiration for capital raise in light of the capital needed that should bump the price too. Of course the more details the better but IMO it will take a combination of the specific capital raise numbers, NWS ending and assumed conversion plan for the prfd to trade at par. Any dividend discussion although very unlikely IMO would let them trade above par I believe. Maybe Im in the minority here but to me its a foregone conclusion that the NWS will stop, capital will be built yada yada. Its just time to wait to see when it is that we get the final terms. Its just waiting to see what Mnuchin, Trump, Paulson came up with before the election and how favorable the terms are.

agreed. I cant imagine JPM would hold this kind of meeting unless it has gotten a mandate, guessing from treasury. What just came to mind for me, and this has probably already been long decided, but does Mnuchin look across the table to Moelis (Paulson) and tell them they are getting unfavorable terms for their preferred shares? Whats the answer that best compensates Paulson for his early support/donations/and advisement? Now true we do not know if Paulson has bought common and is working that angle but he was only prfd when his quarterly report circulated a couple years back. Moelis is Paulson. Notice Ackman, Berkowitz dont have an inside seat the table. True they both stand to benefit and may put more capital to work in the offering but IMO this is an agreement between Paulson/Trump/Mnuchin that was made a long time ago finally coming together.

...and Moelis is essentially Paulson. Paulson is close to getting his payback for supporting Trump early before the election. https://www.vanityfair.com/news/2016/11/john-paulson-trump-favor-to-ask This and Mnuchin has been why this will happen since the day after the election.

I think the more important read through here is how granular the WH plan will be that is released and how fast things move. I think bringing in investment banks to discuss about an IPO is pretty telling about both. If things were going to take a while/drag and we were going to be playing more guessing games WH could easily put out a generic framework and leave us hanging once again. Talking with investment banks before the plan is out IMO says the plan will include "mile markers" for recapitalization as well as probably more specifics then we think about how much and when the captial raise will all happen.

I went and looked back in the thread and FWIW since I tend to like patterns last time hardincap got real down on FnF the WH released the presidental memo a couple days later. Maybe we are close! ;) :D

Be careful with wishful thinking like this. I think a more realistic assessment is that there is some magic force probably from the tbtf banks that delays this again. Think about this: Why is Otting’s 2-4 week comment failed to deliver? Why did Calabria changed his tone from IPO in the 1st quarter next year to hopefully sometime next year? FWIW the presidential memo outlining the request for a plan did come out in March so it was what ~4 weeks late? Otting was implying at the time the everyone is one board with what was going to happen. The memo could have been what he was referring to a plan that was coming out. There certainly could be a TBTF force behind the scenes and they can delay all they want but will in the end they will lose. EVERYTHING has lined up for what we as longs have hoped for. Its just may take longer then we thought. What is a couple weeks or month extra? There is a presidential memo requesting a plan that will put $$$ in our pockets and there have been clues along the way with recent comments from Calabria what that may mean in regards to return. All the delay does it speed up the recap in the end. I believe there is a set deadline this is all up against and that is the upcoming election. The longer the delay the harder the recap cram. The big picture is still there. Concerning oneself with every little word and detail will make you crazy.

No question he is most knowledgeable. The problem is if anyone has every brought up an opinion or point contrary to him he deletes it off of his blog and immediately dismisses it. I get that its his blog but sometimes a little back and forth is helpful to evaluate the entire range of outcomes.

It has been slow the last couple of weeks but it could be the quiet before the storm (confirmation bias?). Does not mean anything about the outcome/this investment has changed. Phillips left bc he was/is done with the plan. He was hired to construct a plan, and is gone now bc the plan is at the WH. Not sure how much more you can glean from that. IMO fuck Tim Howard. He only hears/types what he wants to hear and has no more pull then anyone outside of the admin. He is on the outside pushing his agenda on his blog and what benefits him most. Could just be admin waiting for en banc? If so, so be it. It is frustrating to wait long now that the end of June is here but it is what it is. Does not mean plan is off the rails.

It is more concerning that just "market price dipping". It is normal for a stock to pull back after a good run. What concerned me was the internals of the chart. The behavior of the chart looked like a top instead of a retracement before the continuation of another up move. I am not going to disclose how I use TA to analyze and draw these conclusions. Even if I do, I'll be labelled as voodoo one more time. I think the internals of the chart for FNMAS as a generic pfd view look like an upturn is coming. The pullback has happened on low volume, MACD looks to be turning up soon, stochs are where a turn around has been before, OBV hasnt falled off a cliff and Accum/Dist looks fine too. Market is waiting for upcoming news.

Dont know about delusional but certainly some GSE investor fatigue. The more you think about this saga the more it will drive you nuts.