orthopa

It is probably correct that nothing has changed about Mnuchin/Calabria plan. But our guess of what that plan is keeps changing. Since we don't know, the price goes low. I disagree. Until this article, Mnuchin has been on record stating they are deliberating on the issue. Then these statements appear from a late in the day interview in the article - he would have known it will end up on the front page of the WSJ. Puzzling but definitely a negative coming from him (alternative being silence). WHY? Did talks breakdown? Was a decision to punt reached with concern for impact on the financial system? What changed for him to give these statements? Mr Market letting prices freefall along with volume indicate some are getting the message. I think you have a lot of quick money that bought in after the Capital rule was announced getting out. Muscleman is a clear example of a complete idiot who may or may not buy shares so I'm honestly not surprised some people are selling. Look how fucked up his reasoning on this investment is and he has the ability to buy and sell like anyone else.

And the answer is that nothing will be done before they leave. They have to think about their future as they leave the office. They could be offered highly paid jobs like the other "revolving door" politicians who implemented the NWS. Of course if that's not enough incentive, what just happened to Brian Kemp's daughter's bf could be enough incentive. You said a while a go you were leaving and not coming back because no one liked your analysis. Why the fuck did you come back then? Go away please. Your probably the least informed investor in this thread posting recently (you have competition though), and you and everyone else knows your "signals" are a bunch of fucking horseshit. Its frankly embarrassing to even imply something so ignorant with this investment. Seriously what's wrong with you?

I added more this AM. I dont see how you can take the context of the WSJ article as he wont do anything when he unilaterally brought it up as an option during a congressional when not pressed for it? Again have to look at the big picture here. What do you put more weight behind? Testimony to congress less then 2 weeks ago? Internal non biased memos from a Fannie executive? Confirmed discussions between Mnuchin/Calabria on PSPA? etc or a middle of the night article from Ackerman with a one liner? This whole thing has been airtight up until the business insider leak yesterday. Im not saying Mnuchin did this on purpose but as tight as this has been and as well as he had played this there was no way he was happy with the Fannie Exec.

Very important excluded quote from Mnuchin from the original Bloomberg article that Victoria Guida added later in a Twitter thread... The only thing missing here is that on SCOTUS he said: “It’s not the only issue but obviously to raise third party capital that issue has to be resolved.” Yesterday Mnuchin comments were very bullish IMHO. The question now if PSPA happens before or after Christmas, I would bet that this will come close to deadline (20 jan). I agree, there are things he will "likely" agree to, "wants to set them in the right direction". What does he likely have to agree too, to set them in the right direction that will allow them to raise 3rd party capital? This is probably the same thing Calabria has been "urging" as part of an agreement to raise capital to meet the capital levels in the capial rule.

Thats my thought too. They are fileting the SG back to back to back here. My goodness.

The problem with that idea is that Mr. Market will probably reduce your position for you before you get a chance. Interesting where we're at now. Maybe I should wait 24 hours to post this, but it seems pretty darn likely that SCOTUS argument will occur on the 9th. And my hunch was wrong - preferred prices are higher than they were in late October even without the pre-SCOTUS settlement we've been hoping for. Just shows again that predicting price movements doesn't work very well. Orthopa, however, is on the record saying he/she would heavily decrease exposure if SCOTUS is argued. Are you sticking with that view? I haven't as you mention anything settlement wise could have come down to the wire. Here at 9 am EST its unlikely that will happen. I too was wrong in my line of thinking that a settlement HAD to be done. I would shift my goal posts now to the 4th amendment being done before Jan21st as the point of no return with a huge position. Its seems mnuchin et al is comfortable to go forward with this regardless of what the SCOTUS decides. Im still at a bit of a loss how FnF starts to raise money and when if the SCOTUS decides the NWS was legal. 1. Are you able to raise capital in these companies knowing the NWS was legal? 2. Whats the soonest you can go to market now to raise capital? One would think it has to be after the SCOTUS decides in late spring/early summer.

Plus Mnuchin's planted question with Timmons-SC designed to clarify the trigger point for release during the capital build. IMO, Mnuchin is unlikely to make this type of effort if he wasn't serious about a PSPA amendment/consent decree. Overall, I looked for any sign of a change in direction away from the objectives written out in the UST Housing Reform plan. I didn't see any, and new signals (from Powell/Crapo/Warner) left me feeling even more positive. Mnuchin appears to be a man of his word who works in an administration that prides itself on keeping promises. Like it or not that's a wager we are all making. agree how can you have a plan for releasing on a consent decree if you don't do a final agreement? IMO he just showed his cards/purposely telegraphed etc.

So Calabria is lying is what your saying and you know the answer? No my friend your along for the ride and riding the coat tails of someone else. Apparently this hasn't hit you in the head yet. So you think this entire thing from start to finish, the players involved, the parts of the capital rule incentivising converting preferred to the exact dollar amount of par to meet capital requirements, the dividend exception to allow paying for dividends is all one big coincidence? Some healthy skepticism is warranted but its clear your having a hard time seeing the big picture here. I think a better question is this. Whats your theory on why we are here where we are right now based on my previous post regarding Paulson? Do you honestly believe the Mnuchin and Calabria have a soft spot for housing finance and if so why are they doing this? The system worked for 12 years as is and still does. Why are they doing this?

There wont be urgency to recap the company as soon as possible? Why, to pay out an exorbitant % of earnings in commitment fee to treasury? To withhold dividends as long as possible to current and new investors? To keep a lid of CEO pay? That makes no sense and you know it. That only makes sense to the retail common investor who hasn't read the capital rule. Preferred get converted early and enjoy the upside of the common not at the end. Where has preferred getting converted at the end happened? C? AIG? and why does where the common trade in relation to eps matter now all of a sudden? Place in the capital stack matters as will be shown in the recap plans. Maybe its warrants, maybe its a better then market conversion but preferred holders, hold preference in the capital stack and a 33B key to getting out of conservatorship early. What do common hold? Just the pie that will be taken from. No way the preferred holders that have ridden these cases up to the SCOTUS for the benefit for all involved don't come away with a sweet deal in the recap. You think Paulson, Berkowitz et al are doing this for the good retail common holder when they will have a seat at the table with the GSEs in recap? For "the rule of law"? Get out of here. You think he was throwing $150,000 plate fund raisers for Trump 4 years ago trying to get to make the retail common holder a millionaire while he holds preferred? Nope. This is for him, its simple, hold what he holds. Unfortunately, Jr preferred do not have a seat at the GSE recap table. How do you figure this? Calabria has already said that the GSEs will deal with the shareholders and you will need 2/3 approval to convert some if not all issuances of the Jr Preferred. How do either of those facts reconcile with "The Jr Preferred do not have a seat at the GSE table."?

Apparently a couple of days after its approved and distributed. Ill report back.

This kind of journalism is so pathetic imho...if they wanted to do it for hedge funds wouldn't it be years ago. Instead of looking at the merit of the proposal, they come out with all sorts of garbage. Security prices go up all the time with event based investments; it seems this is just an excuse for journalists pushing an agenda. Edit: also to invert the argument, if/when a PSPA and consent order is done, one could argue any rollback to that path can seriously set back the mortgage market as well, and with more lawsuits to boot. It is pathetic but so true. This is all for Paulson and always has been. He tried by lobbying before the 2016 election, supporting Trump early, becoming an economic advisor on housing for Christ sakes early in the admin that conveniently chose Mnuchin, a former MBS trader and partner of Pauslon as Treasury Secretary. Then you throw in an architect of HERA and critic of the NWS in Calabria and whalah 4 years later you make Billions, and Billions of dollars. It was a long shot no doubt that Trump got in but so was this. I still have yet to hear a convincing argument why Mnuchin felt so strongly about releasing FnF the day after the election and why it just so happens Calabria with his past was nominated for FHFA. No mention of FNF during Trumps 2016 campaign but the day after the election the former MBS trader who is buddies with Paulson says it has to be done. OK!!! How did Mnuchin rise up from a no name campaign finance guy to being Treasury Secretary to lo and behold also be the final say in the 4th amendment 4 years later. Wow, what a god damn coincidence!!! https://theintercept.com/2016/11/22/hedge-fund-managers-expect-a-return-on-their-investment-in-donald-trump/ After reading the article ask yourself, is it really a coincidence we are were we are 4 years later in regards to a 4th amendment and releasing FnF? I think not and Im aligning myself with the guy thats going to eat first.

There wont be urgency to recap the company as soon as possible? Why, to pay out an exorbitant % of earnings in commitment fee to treasury? To withhold dividends as long as possible to current and new investors? To keep a lid of CEO pay? That makes no sense and you know it. That only makes sense to the retail common investor who hasn't read the capital rule. Preferred get converted early and enjoy the upside of the common not at the end. Where has preferred getting converted at the end happened? C? AIG? and why does where the common trade in relation to eps matter now all of a sudden? Place in the capital stack matters as will be shown in the recap plans. Maybe its warrants, maybe its a better then market conversion but preferred holders, hold preference in the capital stack and a 33B key to getting out of conservatorship early. What do common hold? Just the pie that will be taken from. No way the preferred holders that have ridden these cases up to the SCOTUS for the benefit for all involved don't come away with a sweet deal in the recap. You think Paulson, Berkowitz et al are doing this for the good retail common holder when they will have a seat at the table with the GSEs in recap? For "the rule of law"? Get out of here. You think he was throwing $150,000 plate fund raisers for Trump 4 years ago trying to get to make the retail common holder a millionaire while he holds preferred? Nope. This is for him, its simple, hold what he holds.

With all the op eds, these bloomberg articles, Bright talking, parrot, stevens etc we have to be close.

Not true and that's the beauty of the upside for the preferred. It takes 8 years there is no way preferred don't get converted to enjoy that common upside with a conversion. The benefit to building capital that divs are not paid. If not converted (which makes no sense because it counts towards capital and levels the playing field if Srs gone for all parties involved) You have some preferred with a 25%+ div yield on cost that can compound with that upside. The capital rule has an exception for div payments which protect preferred in this regard. What many who hold common dont realize is that the preferred is defacto common with protection, preference in the cap structure, and optionality. If one wanted the upside of common right now you would just hold preferred (at least the high div series) because there is very little chance IMO they are not converted and to there benefit to do so. Like I said before those higher up in the cap structure will make sure they extract their pound of flesh before leveling the playing field. No way they advocate for others to have returns higher then their own from the start. There are many previous examples of this happening and nearly every projection and back of the envelope calculation that has been published assumes the same. If you hold both common and preferred you are holding the same thing except the one hasn't diluted the other to its benefit yet. Of course you could try to trade around these two but that maybe a fools errand.

It looks like this is regarding CARES with Powell. I would not be surprised to see someone on the committee (warner) ask about the GSEs with his letter out there needing a response. Expections for anything in the near term before wed should be low.

For what "cause" will Calabria be fired for if Collins does not go through?

Ill raise you 1 week. Fingers crossed. The fact that Mnuchin and Calabria have met multiple times in the past couple of weeks, the rumor mill is running, and the anti release articles are coming out left and right tells me there is the possiblity for this to happen eminently and most importantly before 12/9 to preserve Calabrias position for as long as possible to see this through. The consensus seems to split on where the SCOTUS will be argued but the fact that this is happening now and not a couple days before Christmas tells me 12/9 is on MC's and SM's radar too.

I have been continuing to add myself over the last couple of days. I never thought we would have had a chance after the capital rule. FWIW maybe market still believes that 4th PSPA doesn't happen and the opposing news flow is enough to make someone on the fence wait and see what happens. 12 years of waiting maybe compressed into 2.5 months and there are still many skeptics and rightfully so.

cries of desperation it seems.

This is getting really interesting! Hoping and speculating we will see something concrete after all. Speculating? I don't know how much more this can be telegraphed at this point.

For those that think that cloths masks may be or may not be effective think about whether or not you can smell your own fart or someone else fart when they pass gas.

right. Ackerman is too much of a tool not to be used as a tool by C/Mn. the collins reply brief was due 11/23, filed 11/19. you almost never see an early filing. https://www.supremecourt.gov/DocketPDF/19/19-422/161278/20201119155421721_11-19-20%20Collins%20Merits%20Reply.pdf The article was certainly a trial ballon. This has been telegraphed for essentially years now so not sure why the MBS market would be suprised by this. I dont have access to an instrument to tell by pricing or otherwise if they were or will be "surpised" but I doubt that to be the case. Apparently Sherrod Brown has come out and said he thinks Mnuchin is the worst Treasury Secretary of all time so he wont lose any friends there by doing the PSPA. Calabria has said that the lawsuits go away with the 4 PSPA and with the timing here that very likely maybe the case. For optics there may not be a "settlement" as much as plaintiffs drop the case no? It would be in their best interest depending what's in the 4th PSPA to preserve Calabria for as long as possible and let his removal play out through the legal system. Someone please tell me if Im off on this but once there is a 4th PSPA within 30 days FHFA should request recap plan. FnF then have 45 days to respond and in turn FHFA has 60 days to approve. So we are looking out no further then 4.5 months from the PSPA amendment to know the final fate of the Jr Preferred. Hopefully sooner as one has to imagine JPM and MS have been sitting on plans for months and just tweaked it Wednesday night. Worst case by middle of Q2 2021 we should finally know our fate.

I think today was a bigger read through day for the common with the capital levels are they are most affected by this. Final PSPA amendment gets us closer but CRP will obviously finish off final valuation +/- some arbitrage. Im adding more tomorrow.

Then how long until new FHFA director confirmed, replaced, new capital rule, new comment period etc. Thats way later for a new rule to go into place. Lots of dilution can happen by then.

Ackerman is a hack, as was Joe Light before him Based on Ackermans and Gaspirinos reporting both were way off on latest developments.