orthopa

With no pre announcement of a new amendment by this time today to agreement safe to say dividend gets swept huh?

Seems like TH is really getting into the weeds trying to inference who wrote the memo, predicting infighting, and blaming big banks for certain verbage. I give him credit for trying but he seems to be trying to hard. Selfishly all that matters to me as prfd holder is the recap and how it happens. I guess if there is no agreement on a pathway forward that could hinder the recap but Im all for giving up some on the eventual final structure of the GSEs in exhange for a quicker and shareholder friendly recap.

I actually have some $$ ready to go if it does go through to add to a dip. Id rather be able to add to a dip knowing what i think the eventual endgame is then chase an illiquid runaway train and incur capital gains on top of it. Seems like market maybe thinking payment is made too as seems like there is a lid on what some thought the gains would be today. That being said it would be a pretty Rich move by treasury to sweep a payment when the president wants a report on appropriate capital levels to get FnF out of conservatorship as soon as practicable . ;D ;D ;D ;D

Maybe this is delineated in the Trumps request for what is Administrative vs. Legislative. Maybe legislative options are unimpressive and most will rely on inertia and the last 10 years as evidence of such. As you said legislative uncertainty is always there and could very well be priced into the eventual make up of the common more so then the prfd. I think what would scare capital away would be more so another sweep type situation but I bet the capital rules go a long way toward showing as Mnuchin says "taxpayers never put at risk again. " If captial is raised while Trump is in office it may give some solace that anything congress would pass would have to be signed/vetoed by him also protecting their investment to some degree. After his term is up for debate.

No question, 180 Billion of creative financing he says. Wouldnt it help to allow them to start to keep some of the 20B a year that they make? ::) ::)Also makes mention of people needing to trust and not be afraid of the GSEs. Not mentioned directly but people need to not be afraid of investing/putting capital in them too. The plan has been outlined for us. Now we just wait and ponder if we have enough in the investment.

For those technically influenced FNMAS forming a nice 3 white soldier formation. Typically means higher. Problem now is its 20% higher then earlier this week. :o :o

Ill let you guys be negative for me. Maybe Im naive but I see nothing negative about this. Big banks or not I could care less as long as the recap happens in a manner friendly to me and I see nothing suggesting otherwise so far. Recap is coming. We used to be at FnF getting "wound down" and I was able to wrap my head around that not happening. Worrying about minute possibilities not worth the time IMO now. We are getting hit in the head by an implement so close that we cant read what it says because have been conditioned otherwise. If WH memo discussed private gain public loss, HF enriching themselves etc shareholders should be worried. Any shareholder discussion has been left out on purpose to avoid that criticism. Next big step for shareholders are recap plans which have been called upon. Worst part will be in the waiting but looking at a Moelis-ish timeline if this is going to get done before 2020 election we only have 18 months. Gitty up.

Yep another sympathizer. Perfect storm it seems. :)

on balance, I find this to be a huge plus. 1. it comes from potus himself. there can no longer any dispute that administrative reform of GSEs will occur, and will begin upon presentation of a plan as soon as practicable. 2. there is reference to authorizing FHFA director to approve guarantors of conventional mortgage loans in the secondary market (I am assuming this includes mbs)...but this will require legislation. how likely will this congress pass legislation? how quickly once any such legislation is passed will fhfa director be ready to start approving guarantors...and how likely is it that any such competitors will line up to go head to head with the GSEs? because the memo asks treasury to distinguish between things that can be accomplished administratively and only by legislation, it seems clear that the administration reform will not await congressional action. 3. while HUD is instructed to reform its programs to avoid duplication and it will remain the primary department focusing on low-income housing, by implication GSEs will continue their low housing mandates (which are currently mandated by statute). so it would be likely that any additional guarantors approved by fhfa under any legislation passed by congress would likely also have such low income housing mandates. this is not what the banks want to have to undertake in forming competing guarantors. 4. it is clear that the GSEs are to be released from conservatorship with their capital levels restored to a sound level. this means that crapo's 2 pager is toast. EDIT: I saw successor entities...I just thought that was eye-wash. the whole structure and other language of this memo is to get GSEs out of conservatorship. +1 There is an entire section (xi) that specifies requirements for the GSEs to have conservatorship terminated, (A), (B), ©. This is what I think your are referring to and IMO leaves the door open for others to have to compensate for guarantees. This entire memorandum signals moving forward, a clear delineation of what needs to be done and a prudent separation of what is administrative or legislative. Recievership is out the window, as are undercapitalized GSEs. The key now is A, B, C of (xi). Safety and Soundness means one thing; capital. Getting out of the political and reform weeds it will be interesting to see if Sr. Pfd is declared paid down. Maybe Im naive but I dont see a reason for the prfd to be trading at less then 35% of par. The GSEs are getting recapped, there is no receivership, and IMO behind the scenes Paulson/Otting/Mnuchin et al are firmly in the drivers seat. Where the rub? Time to wait still?

Reading through it again it appears as if the WH and Treasury/HUD will reform Fannie administratively , and then turn to congress for comprehensive reform. 1. "The President is directing the Secretary of the Treasury and the Secretary of Housing and Urban Development to craft administrative and legislative options for housing finance reform." 2. "Treasury will prepare a reform plan for Fannie Mae and Freddie Mac." 3. "HUD will prepare a reform plan for the housing finance agencies it oversees." 4. "The Presidential memorandum calls for reform plans to be submitted to the President for approval as soon as practicable." 5."Critically, the Administration wants to work with Congress to achieve comprehensive reform that improves our housing finance system. Looks like the reform plans from Treasury and HUD are could get approved before comprehensive reform gets going. And FWIW we have gotten this far in the process this year with no mention of the evil hedge funds reaping a large windfall. Instead its " We’re lifting up forgotten communities, creating exciting new opportunities, and helping every American find their path to the American Dream — the dream of a great job, a safe home, and a better life for their children"

This is a well timed memo.... 1. The white house throws in their 2 cents the day the congress wraps up their reform hearings. 2. As Midas mentions the desk of the president now acknowledges not putting the tax payer at risk for future bailouts, ie sweep. This gives more then enough cover to stop the sweep IMO. If Treasury does it can point a finger at the President as he is involved now. This certainly looks like the back and forth that was suspected by the former treasury official quoted in the Marketwatch article. I think as alluded to the plan is already known. Otting said so right? He signed off, Mnuchin signed off, WH signed off, Calabria signed off. The plan is known. Is this the cover to get it started? The tone of the letter to me seems more like this is the plan and you can help then we need your help.

if the SBC sought therapy, it would be diagnosed as passive-aggressive. I dont see a bill getting reported out of committee with any bi-partisan support, and even if passed by senate without bi-partisan support (which I highly doubt), it will go nowhere in house. so this is just more waiting for Godot. question is whether the potus directive reported this morning will result in a meaningful analysis that can be turned into an actual administrative reform plan, or will this just be more sound and fury signifying nothing. Agree. Chris what do you see as the upside/downside to stopping the sweep in regard to this attempt at reform from the SBC and the memorandum today from the WH?

Its amazing to me after 10 years it all comes down to a brief Crapo outline on a couple of sheets of paper and a combined 4 hour hearing with 10 experts. You would think something that needed to be reformed so bad would take more effort. Unless of course you were pressed to act in the last minute. I dont see what downside there is to Treasury to stopping the sweep. The Senate banking committee is well aware of the ability of FHFA to go it alone and no doubt Ottings comments. That being said what can they do? Block Calabria's nomination. The committee talks as though he is already the director.

this has been my concern since otting's 2-4 wk timeline failed to materialize. the likely timeline: otting's comments leak. congress tells wh privately they will go fast. wh says publicly they want to work with congress. crapo outline released. mnuchin writes brief support statement. 2 days of productive Senate hearings. today's hearing went better imo. Calhoun was strong. lots of utility talk, less Demarco agenda. barring something crazy, the committee will likely pass a bill, perhaps with more cushion than standard 13-12 party line votes. that raises the odds of it passing the Senate this summer, and then they could see where waters stands at that point. so things changed vs january. mnuchin is likely giving congress 1 last shot. crapo likely knows time is of the essence, and things will likely move quickly. this timing also allows for the FHFA to hopefully finalize capital ratio targets and perhaps the 5th circuit outcome. + Begin retaining capital in the interim once Calabria is in his seat which shouldn't disrupt any reform efforts. while possible, there's a better chance they leave the sweep intact until they lose a court ruling or congress fails imo. That certainly would be the path of least resistance but goes against Ottings comments regarding capital. In the end only makes the capital raise more difficult and lets congress stall longer.

any link to article or just a headline?

My first question would be does more capital go along with reforming goals of he WH? I would say so. We will know with sweep this weekend. "Everyone " seems to be against recap and release but ok with recap and reform.

I couldn't watch, but prof. levitan addressed this committee in 2011. about explicit guarantee. did they drag him back to make same point 8 years hence? Dont recall much about explicit guarantee. . He talked mostly about the single guarantor model. If anything all of this chatter by otting seemed to have put congresses' butt in gear. If sweep is held on 3/31 if anything it would create more urgency and Otting could frame it a step getting FnF out of conservatorship with reform via Congress.

Well....why cant Calabria/Otting stop the sweep and let this reform nonsense die out alongside the recap of capital? As long ago as they were I think this is what Otting maybe have been hinting to in his comments and letter to Maxine Waters. What a pathetic last gasp this is, a show from all of these experts.

https://www.banking.senate.gov/hearings/chairmans-housing-reform-outline-part-1

https://www.marketwatch.com/story/fannie-freddie-reform-could-rewrite-a-familiar-washington-script-2019-03-25?mod=mw_latestnews

People who bought on Ottings comments are getting restless and moving on.

Except that it already happened once in December of 2017. I don't see anything inconsistent about another similar letter agreement in the next two weeks. All increasing the liquidation preference of the seniors does is stop the $16.1B overpayment, past the 10% moment, from going any higher. I also don't see why Treasury wouldn't just insist on a huge instant capital raise, to get the companies recapped as fast as possible. Then no government backstop is necessary, beyond a catastrophic one that would only kick in if FnF lose more money than they did in 2008. Agree. Not sure why treasury would want to make the rebuilding process harder when the eventual goal has been telegraphed to different extents by many different people....End of the day FnF need more capital. Hell even delaying the sweep or putting it off for a week makes more sense the missing out on billions of dollars due to timing of the new FHFA confirmation. Apparently Otting, Calabria, Mnuchin, WH all on board right? Just end the sweep and build capital. Its not like the table has been set for EVERYONE interested and watching for it to happen.

If Calabria not voted on in time Otting could always stop the sweep too.

Its my understanding McConnell may move forward with the Senate nomination of Calabria today.

back to waiting for godot.....