orthopa

Big if is right. If you look back at compass comments over the last couple of years they are in the dark just as much as anyone else and have been mostly wrong on their predictions all along. They did and still may have a $1 target value on common.

I assume that your analysis assumed that the seniors were declared repaid? Because otherwise it seems to me that juniors and common get nothing at all. This would be another reason to own the lower-yielding prefs then. I had thought the "flattening of the curve" of price with respect to dividend yield was due to an anticipated conversion to common only based on par/stated value, but receivership that actually leaves enough money for juniors would be another reason. Correct seniors declared prepaid Thanks. How do you account for the seniors disappearing from the balance sheet? Just wipe them away and increase accumulated deficit by the same amount, leaving total equity unchanged? In that case Fannie's last 10-Q showed around $3.8B of total equity, only enough to pay off 20% of the $19B in junior prefs. If you don't mind, how did you come to your conclusion? I was looking at it in receivership and 1B liquidation value. Ill have to find/dig up my notes but I thought I got to just under ~20B left after and 19B of preferred.

I assume that your analysis assumed that the seniors were declared repaid? Because otherwise it seems to me that juniors and common get nothing at all. This would be another reason to own the lower-yielding prefs then. I had thought the "flattening of the curve" of price with respect to dividend yield was due to an anticipated conversion to common only based on par/stated value, but receivership that actually leaves enough money for juniors would be another reason. Correct seniors declared prepaid

More..."The Federal Housing Finance Agency, which controls Fannie and Freddie, would direct the companies to sell or transfer their assets and then put them in receivership, the people said. In a receivership, funds are available to common shareholders only after covering more senior claims, such as the FHFA’s expenses as a receiver, the government’s securities and preferred shareholders." I looked last Q and in a liquidation scenario there was just enough to cover Jr Preferred and common got nothing. Will have to look at most recent Q.

https://www.bloomberg.com/news/articles/2018-01-04/fannie-freddie-overhaul-might-mint-hedge-fund-riches-or-losses "This time things could be different. The authors of the latest bill -- Tennessee Republican Bob Corker and Virginia Democrat Mark Warner -- are considering a proposal that could make investors in preferred shares whole or close to it, while owners of common shares could fare worse, said people familiar with the lawmakers’ thinking who asked not to be named because the legislation is still being drafted." Same verbage. Its been reported twice although by same reporter. Does that make it any more true?

Up 23.5%. Was higher mid year but PM took a dump. Holding PM, MO, V, FMNAH, FMNAJ BRK. Totally missed the cryto run up. WAY out of my circle of competence.

As a prescriber of these medications if you knew they were too strong the first time why did you pick them up in the first place? You could always ask the surgeon beforehand if you wanted some not a strong right? Why didnt you? People dont show up with their "pain tolerance" ability tatooed on their forehead. People also process narcotics very differently and build a tolerance. How am I suppossed to know this beforehand if i give you pain med. Secondly what the best way to figure out how much pain someone is having? Only way I know is ask them. Is everyones 5/10 pain the same? What about 10/10? People lie too. People often forget that they also have a hand in their care in your example you could have very well not gotten the medication right? What if you have a high deductible insurance and the 3 days worth of pills wasnt enough and you got wacked with another cash payment? What if you ran out of pills over the weekend, could'nt control you pain, now you have an out of pocked visit to the ER? You probably would rather take his bullshit answer as you put then have a $1000 plus ER bill and multiple follow up out of pocket payments for more small scripts. What people who blame physicians for the opioid epidemic forget is that these people put the pills in their own mouth. I don't remember every seeing a physician jamming narcotics down someones throat. Secondly what do you do if someone comes in your office says they have severe pain and cant live with it? Tell them they are a liar and leave? Mind suggesting to the physician community what med you would recommend if OTC meds dont work and the pt is taking an SSRI and as a result cant have ultram? Medicine is difficult and there is nothing more difficult in judging someones pain. Its impossible and thus often people over prescribe at times. Secondly the vast majority of narcotics that are heavily abused are generic and physicians are not incentivized at all to prescribe them. The non generic ones that they could be persuaded to prescribe almost always have anti abuse formulations which would fly in the face of a mis aligned incentive by drug companies.

That was posted earlier in the thread. I dont know how he/she came up with 15% upside on some of the preferred. Jesus, some of the preferred are trading at 25-30% of par. I would hope this investment offers more return then that in everyone elses eyes.

https://www.wsj.com/articles/how-the-great-fannie-and-freddie-dustup-could-end-1513880901?mod=e2tw Anyone able to get the full text of this? Thanks in advance

maximizing warrants does not seem to be a priority for any congressperson or senator, even if it is for some people on the message boards and moelis / ackman / rnc. I used to believe it made sense to believe in the warrants' appeal but no one in power has spoken up, despite many opportunities to do so. I think you probably have'nt heard anyone come forward to discuss monetizing the warrants yet because that discussion includes treatment of both preferred and common shareholders. Maybe once the language of the new bill is out "we" and others in power can start to extrapolate about second order benefits for gov.

Agreed. The biggest risk of zero, imo, was Congress eliminating the companies and giving shareholders the middle finger by keeping the SPS on the balance sheet. It is much harder to screw shareholders when the companies themselves are preserved, and there is less incentive to do so. Agree, is now the time to go all in if you haven't already?

Agree but what is odd is that market only believes ~20-25% chance that preferred will get par...but is respecting dividends? The market seems to be putting the cart before the horse here.

FWIW no mention of them getting rid of fannie and freddie. Keeping them owned by gov not a great mention. Goes totally against Mnuchins out of govt control and ownership. Hensarlings bill looks like posturing and a smoke show. Put up a big stand, preserve your legacy, yada yada. The Corker Warner bill seems to be the more realistic attempt to actually move forward in some fashion.

I think its certainly healthy to worry about Mnuchin being pro shareholder or not but I think it would be very difficult politically, legally (ongoing Sweeney case) financially (new private capital) to hose shareholders. The Joe Light article which certainly could be fake news alluded to this. I also think you cant completely discount the Paulson, Ackman, Berkowitz, Mnuchin, Corker connections. I know that may seem like a wishful thinking but I think have been validated by the Joe Light article if it isnt fake news. The only thing that doesnt seem to really add up over the past couple of weeks is this Hensarling bill, time will tell I guess.

It doesn't add up. If there's been an agreement across Mnuchin, Corker, Henslaring- why is he fighting so hard for this bill? Posturing is my guess. Just for my own clarification this concern is regarding the Hensarling bill correct? Not the corker Warner bill that was rumored to be preferred shareholder friendly?

interesting. the market is in 'show-me' mode. FnF investors used up their 9 lives of hope a long time ago. This is in reference to the Hensarling bill correct? Not the Corker/Warner bill that was reported to be friendly to preferred. Hensarling said in his release he wanted the charters repealed.

Tobacco, and most of anything related to investing regarding orthopedic surgery.

Agree, we aren't all the way there yet but becoming increasingly likely that this works out favorably with a target of par for the preferred. Like I had mentioned back probably 300 pages ago my capital at stake is aligned with Berkowitz, Paulson etc. Ill take that any day in a situation that has the relationships we hashed out before. I know a fear for some has been preferential treatment for those bringing suit against the gov but that is not the clean solution I believe the gov is working towards. I was thinking too it really makes more sense now that Paulson and Ackman mentioned Corker working on a bill and targeted an early 2018 for the investment working out favorably. They knew Corkers actions, the time table laid out does not seem all that unrealistic now. I think one has to look hard at passing up a possible ~400% return to par in some of the preferred issues +/- a div for the common which seems to be a bit of a black box. Is the risk for more then a 400% return worth what you could lose in common? First thing I would say if I read this typed by someone else is fat chance the div gets restarted, and I agree. But why is the market pricing it in then? Its odd. The market is pricing this at a ~25% of success but respecting the dividend payouts the securities had. ..and to fuel my overwhelming confirmation biased I added more FNMAH today

https://www.marketwatch.com/story/prospects-for-housing-finance-reform-brighten-and-may-favor-shareholders-2017-12-08 The angle that some have mentioned in this thread that the gov will want to not have lawsuits hanging over reform mentioned in this article.

Enter mnuchin and admin reform? Looks like this maybe becoming more urgent

Is there anyway to block someone, this is getting tiresome.

hmmm. lots to think about here. especially since we don't know what mnuchin wants. on one hand, he thinks extending jumpstart for a year is fine since he really does want to work with congress and avoid friction with the Republicans. on the other hand, he could recoil from this, realizing he loses leverage in negotiations in 2018, and play chicken with Congress if they resist completing the govt funding or tax reform over this. he might also want to settle lawsuits with a 4th amendment, and this could scuttle that plan. there's not a lot of volume in the lower price preferreds which tells me that the mkt doesn't fully buy this joe light article. Lets see what the end of the day volume is on the preferred. Put in an order for the less liquid preferred and extremely hard to come by. Who would be selling with this news at these prices? I try to think at things from multiple angles. what if the joe light article was simply a way to grease through the jumpstart extension, and ultimately means little? or what if the corker plan pays back preferreds but only over many years, which reduces the NPV? I wouldn't be writing this if conveniently the jumpstart renewal didn't appear 12 hours after the Bloomberg article. Did you even read that bill that was posted? It appears as an extension of 1 year BUT it actually tries to stop paying out money for the housing trust funds while assuming dividends will stop as well. What this bill (Corker/Warner) is trying to achieve is prevent Admin to nuke the Srs. because... my view, they want to do that in the housing reform bill and this little bill is a prelude to allow recapitalization and build up of capital. The original jumpstart was two lines. It only referred to tying up Treasury's hands. Had no language on anything else. This is much more than just an extension. It is already meddling with potentially a 4th amendment that will stop dividends. There are still funds/retail that use any rally to unload. A bit disheartening. @ Orthopa that wayne comment wasn't nice. And we still don't know the end to this movie. My view why Mnuchin is implicitly okeing all this. He said any reform comes after build up of capital. The above bill appears to: a) give congress 1 more year for reform b) strongly suggests fixing the coming zero net worth capital as it includes language of "not paying dividends". Comment to Wayne wasn't derogatory, just looked back in the thread and noticed he was out 2 days before, thats all. Also any bill needs to be signed by Trump (mnuchin) of course. I dont see congress going to far off he rails here but always possible of course.

Ouch, sorry Wayne.

hmmm. lots to think about here. especially since we don't know what mnuchin wants. on one hand, he thinks extending jumpstart for a year is fine since he really does want to work with congress and avoid friction with the Republicans. on the other hand, he could recoil from this, realizing he loses leverage in negotiations in 2018, and play chicken with Congress if they resist completing the govt funding or tax reform over this. he might also want to settle lawsuits with a 4th amendment, and this could scuttle that plan. there's not a lot of volume in the lower price preferreds which tells me that the mkt doesn't fully buy this joe light article. Lets see what the end of the day volume is on the preferred. Put in an order for the less liquid preferred and extremely hard to come by. Who would be selling with this news at these prices?

I can see made whole as in a target ie par. What is the made whole target for common? Can be any number I guess. Secondly there was some talk in the thread about the huge volume spikes in the preferred FNMAS and FNMAH in october. Very well could have been Ackman et al. Some here thought it her was it was berkos clients liquidating. A