orthopa

Now its the US and Europes' fault. Great, just great. Your making Dalal look bad now after his summer pronouncements.

Classic. Xenophobic rant when called out for using misleading stats. Hey Dickie you weren't in charge of that French track and trace program were ya?

I assume they have changed their minds since then, but no more than a month ago ACG Analytics had been predicting the capital rule would be finalized before the election. So yet another delay. The idea that if Trump loses, Treasury and FHFA are going to settle the lawsuits before SCOTUS hearing and wrap everything up in our favor with PSPA amendment and consent decree by mid-January looks less and less likely. Theoretically, it can be done, but the reality is nothing has been achieved in a timely manner throughout this process. I've been in the junior preferreds for 6 years and I'm not going to throw in the towel now when they are still at 30% of par, but I have to admit I'm as worried about the outcome now than I have been at any other time. With all the steps that Calabria has made in the right direction, nothing of any permanence has truly been accomplished. If the NWS hasn't been written down by early December and the case goes to SCOTUS, there is a real possibility that we come out of this with nothing. It certainly has been a frustrating ride. Im going on 7 years with some of my earliest preferred holdings so I agree each delay feels like an eternity. I have gone back and read/listened to the majority of Calabria and Mnuchin had to say as well as all the Treasury/FHFA documents etc just to make sure I didn't mentally make an error causing a miss judgement in holding this investment. After spending a great deal of time I came to the same conclusion. There is no alternative and if you go by the words and some of the actions these guys are serious about doing this. The problem is there has been many more words then action. I think there is some credence to how Mnuchins legacy is affected by this as I posted before but he could easy tell us to f off and ride into the sunset I guess. Last summer we first got the rumor that the admin was going to wait till after the election to do anything. That was obviously correct as much as it was counter intuitive to the momentum at the time and what was coming out of Calabria's mouth. If you think about it that way what has happened and the pace makes perfect sense. That doesn't mean at all that I agree with it as an investor or like it. Unfortunately we need deadlines and ultimatums to get anything to happen and 3 big ones are coming up; election, SCOTUS case, and inauguration. That being said as foolish as it was to hold for the last 7 years it would be just as foolish to let it go until at least inauguration. As I delineated before in another post if Trump loses and the SCOTUS is argued then at a minimum I would heavily decrease my position as it really goes against the leverage I feel is there now and the point of no return in regards to judgement and who is in power when that judgement comes down. I don't feel confident enough in my understanding of legal outcomes to predict how things will look with the range of SCOTUS decisions with a Dem Treasury Sec and/or Calabrias job in jeopardy. Not to mention that now with the capital level to where it is you would have a Dem Treasury Secretary negotiating an interim PSPA agreement with a possible lame duck Calabria. What a nightmare in regards to leverage, investment time horizon and range of outcomes. That could change with a consent decree signed by inauguration which would mean a jump in price but I think going into inauguration hoping on the goodwill of others in a lame duck session is a little nuts. We have hashed this out a million times but if Trump doesn't win its pretty obvious what should happen and when if Mnuchin and Calabria are serious about reforming FnF, raising capital, yada yada. If not just have to move on but as I said before count me out of the next one of these that comes along. I have severely underestimated investments with the gov and depending on the goodwill of others in an investment.

Per capita, Ontario has 1/3 the daily cases compared to the U.S. But I fail to see your point. You asked whether cases growing meant that masks didn't work. I gave you simple math that proved cases could grow even if masks are extremely effective. This is like saying a cancer drug is very effective except that the cancer will grow. For some reason we have gotten to these undeniable truths and perceived ignorant questions below not only on this board but in the "world"; media, social media, public perception etc. I say that knowing situations are very different throughout but there seems to be some consistencies when you start to explore the topic. 1. NZ, S. Korea and Sweden are all examples of options taken. NZ and S. Korea are the right ones, Sweden wrong one. 2. Masks unquestionably work. If examples are brought up to suggest they don't its undoubtedly quickly explained as laziness or irresponsibility of people even with wide spread usage. Irresponsibility seems to run contemporaneously on different continents. 2.1 For some reason 20%, 50%, 90% of people wearing masks all have the same outcome and you seem to get increasing cases. See 2 for an easy explanation why they don't work. Hard math is then used to explain softly understood situations. Guilt is placed or ignorance is assumed based on the hard math as its obvious masks work and we quickly move on. 4. A plan was needed and that would have made things better. When examples are brought up where plans by a leader didn't work its the peoples fault. People in areas where there was no plan blame the leader. 5. The virus can be controlled we just all aren't doing our part. We then take our children for their regularly scheduled immunizations. 6. Covid is not the flu/cold no matter what happens. If downward trending IFR's, CFRs are discussed 225k dead brought up in US immediately. End of conversation. If probed unexplainable life long illness or incapacitation is the mic drop. Prove that wrong in 10 years. 7. Humans hoarding paper/goods, food etc could be considered panic. The measures put in place by other humans causing hoarding not panic but the correct decision. 8. People who die from a contagious disease much more important then other deaths. End of discussion. 9. Locking down works. Bringing a wide spread virus back into enclosed areas/houses where mask usage drops significantly best idea. Questioning such obviously stupid. 10. Cases are the important measure now, hospitalizations, ICU usage not so much. "So your saying its a bad thing they didnt use the field hospitals you dummy?" 11. We have learned alot about the virus and how to treat it and maybe we could do things different this time? What about the 225k dead? 12. Masks work. The people who got the virus when almost always wearing a mask got when they took it off. Duh! That being said even though people mostly take their masks off at home we still should encourage people to stay home at night and avoid public areas to stop the spread. 13. Even if masks stop the spread just a little its worth it as it counts in the big picture. If a medication makes only a little difference it didn't work. Look at the data for the masks,er i mean medicine! Its right there black and white!

20.7B net worth now. Only 4.3B until cap is hit which maybe end of Q4? This could be another lever to force Treasurys hand as it seems that the only way anything happens. Since that cap maybe hit or close to it with next Qs earnings I think looking at the last amendments language. "The Enterprise and Treasury agree to negotiate and execute an additional amendment to the Agreement that further enhances taxpayer protections by adopting covenants broadly consistent with recommendations for administrative reform contained in Treasury's September 2019 Housing Reform Plan, in further consideration for the amendment contained in Part I of this agreement. " I guess Treasury could just start to sweep everything again over 25B but not sure how Calabria would publicly handle that with a very conservative capital rule eminent that he has taken heat over and FSOCs recent blessing and recognition that FnF many need more capital then the rule calls for. Seems like that would be against the regulators duties and the law as Calabria says. The issue I see is if the SCOTUS is argued and decided then another interim amendment is need to account for 2 more quarters which doesn't seem consistent with the Treasurys September 2019 housing reform plan or the language of the last amendment. Of course I/we would believe that additional amendment would be the final amendment but of course Calabria and Mnuchin could just raise the cap and stretch us some more. That should probably be the base expectation for now.

Going back to what Mnuchin has said publically on FnF its very interesting to hear this interview now, 13 months later knowing where we are with the Selia ruling and SCOTUS https://www.foxbusiness.com/markets/treasury-secretary-steven-mnuchin-trump-administration-fannie-mae-freddie-mac-reform He says "regardless" of what happens with the court case he will not let the court case stand in the way of housing finance reform and "we" will restructure Fannie mae and Freddie mac so they have private capital. How the hell can they do that "regardless" of the court case NOW? He says the court case is an "investor issue" that continues to go through the legal process. Clearly 13 months ago he viewed the 2 as separate issues. 1. An "investor issue" going through the legal process and 2. the building of private capital for FnF. Clearly DOJ has brought him up to date since that interview since they are unquestionably tied at the hip. Looks like to me the SG holds the reins on the SCOTUS case and not Mnuchin in anyway whatsoever.

A quote from the above video 5/10/19. "Calabria is currently waiting on a plan from the U.S. Treasury on reform for Fannie and Freddie, which he expects this summer. Then he will negotiate with Treasury and hopes to come to an agreement by the fall that would then allow them to stop Fannie and Freddie from sending all profits to Treasury later this year. That is, ending the so-called net sweep. By January, Calabria wants to start the capital-building process and thinks it’s possible an IPO could occur at the earliest in the first half of next year." Wow.

It seems the way to move forward with this would be and could be much simpler then these 2(mnuchin and calabria) seem to make it. If we remember correctly Calabria came out guns a blazin here (https://www.foxbusiness.com/markets/fannie-freddie-ipo-could-come-in-2020-fhfa-mark-calabria) and then the Bloomberg article about waiting till after the election came out and the brakes have been on big time. FHFA/Treasury has needed to stall and he certainly did his aprt waiting 5-6 months longer then the above article implies for new capital rule after treasury waited 3-4 months for the Housing plan. Hopefully the Bloomberg article is true or we may all have been taken for fools to believe what has been said. Calabria seems pretty confident that he will be in office for his whole term. Granted this article was printed pre Selia but he still seems to believe he cannot be removed without cause. Surely he knows about the possibility of a Biden win and the Selia precedent in ruling.

The head of state in almost every European country may have been with him too.

In the event of a Biden win and a P SCOTUS win, it's unclear to me how the SPS gets written down. Then you have Calabria whos job maybe on the line with the SCOTUS negotiating the future of housing finance in the US with a democrat treasury secretary being advised by Jim Parrot et al. Thats a nightmare. In that case is a consent decree even written if a 4th PSPA isn't agreed to? How can you have a Biden win, an argued SCOTUS case, no PSPA and a consent decree? That combo doesn't work. If Calabria and Mnuchin are serious about this the SCOTUS is never argued, especially with a Biden win. If not time to walk away if not run. can't deny this other than to say that my investment thesis would still be intact: TINA and Ps will win. IRR goes out the window I admit The question is even if damage remedy decided how far of a 180 can a Dem President, Secretary, and FHFA director take FnF and shareholder returns with them.

FWIW looking at the price action/chart for those believe it no matter who wins the election the move will be a doozy. Last time BB were this tight were end of Feb this year before the covid sell off and end of 2019 before the Otting comments. Both were roughly ~50% +/- moves respectively for the preferred and 200%/-65% for the common. Buckle up.

In the event of a Biden win and a P SCOTUS win, it's unclear to me how the SPS gets written down. Then you have Calabria whos job maybe on the line with the SCOTUS negotiating the future of housing finance in the US with a democrat treasury secretary being advised by Jim Parrot et al. Thats a nightmare. In that case is a consent decree even written if a 4th PSPA isn't agreed to? How can you have a Biden win, an argued SCOTUS case, no PSPA and a consent decree? That combo doesn't work. If Calabria and Mnuchin are serious about this the SCOTUS is never argued, especially with a Biden win. If not time to walk away if not run.

Europe got complacent. Cases here are rising too - in all regions. I think we will crack 100k cases/ day very quickly. Hospitalization is the one metric to look at. The last waves topped out at 60k COVID-19 hospitalization. Once we get to this number, the hospitals system becomes strained, we are going to have local restrictions again. Edit: another indicator - my wife went to Costco today and noticed that several items like paper, wipes were sold out, just like during the first wave. Apparently people are getting ready for things to come. Yes. Do stupid things with the virus and let it get out of control and then be forced to brake (eventually) the economy. Where i live (BC) we are seeing a spike in cases due to weddings, funerals and gender reveal parties. People are ignoring the max 50 people limit. Right before flu season. Stupid is as stupid does. North America and Europe are seeing a spike in cases at the worst possible time... up, up and away :-) There is no way that certain states in the US that are trending down after big spikes early this year are not making mistakes either. If in BC people are not following guidelines and letting their guard down there has to be similar circumstances in other states. Looking at the NY case count if 5 million people in BC cant follow guidelines and let their guard down how the hell are 20 million in NY doing it? I don't think they are as you point out as humans get lazy, let their guard down, get tired of restriction and ignore rules. That being said looking at case count there is a larger force at play.

The summer time Europe cheerleader is back right on cue. Any comments on Europe?

Europe got complacent. Cases here are rising too - in all regions. I think we will crack 100k cases/ day very quickly. Hospitalization is the one metric to look at. The last waves topped out at 60k COVID-19 hospitalization. Once we get to this number, the hospitals system becomes strained, we are going to have local restrictions again. Edit: another indicator - my wife went to Costco today and noticed that several items like paper, wipes were sold out, just like during the first wave. Apparently people are getting ready for things to come. I never understood this. If you ran out of toilet paper and stuck at home why not just take a shit and hop in the shower worst case? Irrational fear being replaced by irrational fear.

My 2 pennies. 1. If Trump wins we should see substantial post election price appreciation as that eliminates a lot of short term uncertainty. Still doesn't account for Calabria and Mnuchin moves post election but allow more time for both to carry out the plan. 2. If Biden wins likely we see a drop post election (maybe even significantly) until we start to see some action from Calabria/Mnuchin leading up the SCOTUS oral arguments. This maybe the best outcome for an accelerated time line though. I think since amending the PSPA and formally stopping the NWS maybe the biggest short term action both Calabria/Mnuchin can take in the next 6 weeks to affect share price that is the biggest thing to watch for and can happen with either election outcome. This ideally happens before SCOTUS oral arguments and comes with other actions. I think what happens before or on Dec 9th will be the biggest tell for shareholders. My confidence in Mnuchin/Calabria would both be seriously compromised if SCOTUS oral arguments occur as scheduled. This is for multiple reasons. 1. As cherzeca and others have pointed out actually/continually fighting a case in the SCOTUS that is 180 degrees to what the administrations public housing goals are undermines my confidence in those goals as being serious. 2. This undoubtedly delays the offering prospects for early next summer if we don't get a decision till June. Tack on another 6-12 months to any idea of a timeline you may have had for capital building and getting resolution of Jr preferred if that's what your holding. 3. Many lawyers/opinions have high probability of shareholders winning in SCOTUS. If shareholders lose we lose substantial if not all leverage in negotiations and the NWS likely stays intact until decision and who knows what happens after. If Biden wins, and the SCOTUS is argued by the gov I would really consider heavily reducing my position. The prospects of a having Biden in office, a Dem Treasury Secretary, and the possibility of Calabrias position in jeopardy is the worst set up to have while waiting 6+ months for a SCOTUS opinion to come out.

What is their incentive trying to push FNMA/FMCC and IntelSat very hard? Could it be just self re-enforcing bias? ACG first started with a bold prediction in 2019 about FnF. Then as it turned sour, they have to double down to show their clients that they should be listened to. Or maybe there isn't some weird conspiracy behind everything; and they think that it's a complicated subject for which they can provide value to interested funds while simultaneously benefiting from being right given the risk/reward dynamics? +1 To be fair everyone on in this thread has been wrong at some point and until this works out is wrong if invested. They have earned respect on the timing of some calls.

unlocked now https://www.realvision.com/the-ultimate-election-trade-fannie-and-freddie-live-with-gabriella-heffesse

Not sure I quite get the quoted part of this tweet. Ready for what? If released under consent decree the terms would have been determined already. I wonder if the mile markers will be released with or as part of the capital rule?

Speaking of chances, I've laid out the possible near-term scenarios from today and assigned conservative probabilities to each node to arrive at a "low-ish" estimate of a JPS win. Spoiler: It's 80%. I have no doubt others will see different probability distribution and for that reason, I welcome any feedback (especially from those with more insight & expertise). FWIW I've owned JPS since 2011, and recently added significantly more around current levels. See attached. You have 80% odds of an amendment which requires Mnuchin's approval. Why is it only 20% odds that Mnuchin says F* you and leaves the mess to the next administration if Trump loses? Certainly a possibility I have thought of but a low one I believe for a couple of reasons. 1. Granted it was only words but reforming the GSEs were a priority for this administration spoken by Mnuchin himself. 2. A loss in any fashion during a Biden admin is blamed on Mnuchin/Calabria as right now they have their name all over this and Calabria still in office till removed. So either they leave their mark on their terms or a courts terms. 3. Even if only at 50/50 odds something as large as overturning the NWS and being held responsible for such carries no glory. Why even step in that arena when you can stop that possibility in totality with a pen stroke? 4. Last PSPA amendment agreement contemplated another amendment. 5. Again I have mentioned this before but I think many people that Mnuchin would interact with outside of public servant duty would benefit much more from a 4th PSPA then not. This will be seen as enriching the hedge funds but lets call it for what it is. 6. There is substantial cover at this point in regard to Tsy investment and risks of SCOTUS. As much as sticking it to Biden may seem palatable this would stink of Mnuchin forever. How can it not? A interesting point that Phillips brought up during the recent MIT webinar was in regard to treasury's investment return. Not only have the GSEs returned the original commitment +10% but treasury also has the warrants which will be worth 10s of billion of dollars making this one of the govs best investments if not best ever. That should quiet Mark Warner and his buddy down real quick.

Was just going to post this. It lays out the thought process of what should happen and why between now and Dec 9th.

We need more twitter links on the contact radius and size in um of corona fart particles and whether not our 880 thread count bed sheets can act as an effective mask. That will get us back on track real quick.

Something does not add up here. https://www.bbc.com/news/world-europe-53934952 https://www.bloomberg.com/news/articles/2020-08-30/france-tightens-mask-protocols-after-surge-in-virus-infections Mask mandates go into effect end of august and 6 weeks later France has a state of health emergency. Is 6 weeks not long enough and now we have to wait 2 more weeks for the masks to start working? https://www.euronews.com/2020/10/14/france-will-reimpose-a-coronavirus-related-state-of-health-emergency-from-october-17 ...and so much for that testing and tracing stuff. https://www.mediapart.fr/en/journal/france/200920/how-frances-covid-test-and-trace-strategy-became-overwhelmed https://www.theguardian.com/world/2020/oct/13/uks-test-and-trace-having-marginal-impact-which-countries-got-it-right https://www.theguardian.com/world/2020/sep/23/glitches-dent-german-enthusiasm-for-covid-contact-tracing-app We thought only the US couldn't get its act together with testing!! Who on the board wanted all this testing again? Clearly its working well in Europe. Uh oh. Canada is no bueno. https://www.cnbc.com/2020/10/14/who-warns-canada-is-facing-a-second-wave-of-coronavirus-cases-.html "The government warned Ontario could experience “worst-case scenarios seen in northern Italy and New York City” if trends continue, Reuters reported Friday." So seeing that France instituted some mask mandates and had a test and trace program in place (that is failing) what exactly is it again that the US should be doing different? Trump took it on chin on good old cornerofberkshire&fairfax. All we heard all summer was how the US was a covid shithole from our European and Canadian brethren . ....and now the thread is quiet.

thanks for posting. Calabria has a personal interest in settling Collins after election day and before 12/9 if Biden is elected, or it appears that he has ben elected. This could take the form of simply an economic deal, via a 4th A, or also a release from conservatorship into a consent decree. With Collins settled, Calabria "could" ignore any attempt by the Biden administration to remove him, and resist in the courts until an appellate court rules against him (and scotus denies cert). this could take over one year, during which Calabria could continue as director. edit: just read article quickly. there is a real disconnect insofar as Layton doesn't seem to understand that it is possible (and in my view if Biden is elected, likely) that Collins will be settled in connection with the elimination of the SPS. it is astounding that he doesn't seem to understand the relationship between the two. Great explanation thanks. Yeah he does not mention settlement once and has always suggested the recap would take "forever".

https://www.jchs.harvard.edu/sites/default/files/research/files/harvard_jchs_path_gse_reform_layton_2020_0.pdf Interesting read. The possible Biden admin plans make my blood boil and if Trump isnt re-elected I forsee Mnuchin and Calabria doing all they can before inauguration to leave a long lasting mark on the GSEs and not even given a new Biden Treasurer a chance to do much. Multiple times he refers to Calabria's job being at risk with the SCOTUS case. cherzeca this is a question for you. Sometime back I asked or implied that Calabria's job would be on the line with the SCOTUS decision if it ever came down with one next spring or summer. I cited this as additional motivation to settle before oral arguments. You had said if I remember correctly that Calabria essentially had no skin in the game with the case. So is Calabrias removal for cause provision up for decision with the SCOTUS or not? If so I see another reason to settle before oral arguements this time for Calabria to allow him as much time as possible to carry out releasing the GSEs from conservatorship. Thanks