SnarkyPuppy

Has anyone following the space closely identified a reasonably easy way to invest in companies working on custody solutions? I'm not aware of any public companies but haven't looked very hard. Will report back if I find anything as well.

Evidence in the real world of what? I don't follow. Given that Mnuchin cannot unilaterally implement two of the core parts of the Milken proposal, how do you expect that to be a plausible downside scenario? I don't see how the Milken plan could be amended into something Treasury can do by itself. It begins with amending the charters, something only Congress can do. It can't be. Hence why I'm worried that he's waiting for another Congress & a new FHFA director to stand behind him. If he wanted to go the route of Moelis, he can do that today. Doesn't need a new congress. Doesn't need a new FHFA director. With respect to your legal argument, all of the legal arguments to date have passed every basic common sense test (and seemingly the opinion of some attorneys), yet we've been absolutely blindsided by the judicial branch opining that it does not have the authority to review. How does that argument not also apply to the liquidation preference in the event of receivership? You're acting like its a probable event that we win a liquidation preference suit and I just don't see how you're optimistic on the legal front at this point. To be clear- I remain cautiously optimistic and am playing devils advocate.

Breakeven cost of mining is largely irrelevant to the actual value of bitcoin, as the difficulty to mine dynamically adjusts to the number of miners. Said another way, if the # of miners went down dramatically -> the ease of mining would adjust proportionally. Listen to podcast #3 if you're interested in more - http://horizonkinetics.com/podcast-type/consensus-money/

What other incentive do you see away from the warrants FOR the gov't that would out do $100B? Personal incentives. These guys want to get re-elected. Handing over the secondary mortgage market to the large banks -> fundraising from the large banks for the next election cycle. oh so systemic corruption due to extremely weak campaign finance laws. Got it. I've written this before but I'll repeat it. Indignation is not an investment thesis.

This paper involves two things that Mnuchin and Watt (or Watt's successor) cannot do without Congress: amend the charters pass the companies through receivership So if Mnuchin is going to do any purely administrative action, he won't be able to come close to what the Milken Institute wants. Even then, a pass through receivership will prompt a whole wave of lawsuits from junior pref holders, unless said holders are made whole anyway (which involves deeming the seniors repaid). The longer FnF build capital and/or make NWS payments (i.e. the further past the 10% moment FnF get), the stronger the case gets for the junior holders. Absent actual evidence in the real world to the contrary, this is wishful thinking. The fact that Mnuchin hasn't/isn't acting administratively is consistent with the fact that this plan could be aligned to his agenda, rather than administratively implementing Moelis.

What other incentive do you see away from the warrants FOR the gov't that would out do $100B? Personal incentives. These guys want to get re-elected. Handing over the secondary mortgage market to the large banks -> fundraising from the large banks for the next election cycle.

So many ways of looking at this. I guess let me try inverting- -If he was anti-GSE's why would he have publicly said he will not get rid of Fannie Mae? He said this publicly in an interview a few months ago. -If he was against the public/private model- why not say so? What downside is there to saying he's against having public shareholders? The current congress is clearly happy to offer legislation that is anti-shareholder - so if full privatization was Mnuchin's agenda, why not publicly say so and openly push congress towards that model today while the players are in place? Why the hostility between Corker and Mnuchin/Trump? -If he is worried about being criticized for taking care of his hedge fund friends, why would he be transparent in his plans? Why not take a slower approach and make it seem as if he is analyzing the situation objectively without having a foregone conclusion? I don't necessarily see the downside of being transparent about a negative outcome for shareholders. I do see downside in being transparent about a positive outcome for shareholders. So far, he hasn't been transparent. With all of that said - the most likely downside scenario is this model: http://assets1b.milkeninstitute.org/assets/Publication/Viewpoint/PDF/Toward-a-New-Secondary-Mortgage-Market.pdf I wouldn't be stunned if that's where things end. Seems consistent with everything we've heard so far across multiple key players. Maybe we would receive some relative compensation in lieu of ownership of the new private mutuals. Maybe we wouldn't. The counter-argument is that the government doesn't receive $100bn. Well- as time goes on the current administration is receiving quarterly checks and the period for which the benefit/use of that $100bn for the current administration is shrinking. The government is financially incented to exercise the warrants - but that assumes that is their primary incentive.

Why is Paulson still in this trade and concurrently estimating high degrees of confidence? Is he uninformed? Has he really had no conversations w Mnuchin?

My quick take- Mnuchin wants an explicit guarantee but doesn't want receivership/end of the current GSEs. - watt likely won't agree to Mnuchin acting administratively to implement explicit backstop or won't allow Mnuchin to act administratively at all sans congress legislation - congress likely won't come up with legislation with current GSEs around (e.g. public shareholder model) Once Treasury has an FHFA director that will be agreeable on both -> recap with explicit guarantee + utility structure

I have a full position and dollar cost average incrementally every 2 weeks.

I was digging around to get more information on the RNC proposal from last year. An article on a separate RNC proposal (https://www.politico.com/story/2017/08/25/rnc-gop-anti-kkk-resolution-hate-groups-charlottesville-242037) states that: "But the move by the GOP’s official political arm — signed off on by the White House ahead of time — underscores the level of concern within the party over Trump’s comments on the protests and the impact they could have on the party heading into the 2018 midterm election." Is this standard protocol for RNC Resolutions? The presumption is that the White House signed off on the GSE Resolution. Also interestingly, the RNC chair and other key members of the RNC (e.g. Todd Rickets- Finance Chair) were directly appointed by Trump. I didn't know that (maybe obvious to others). The GSE Resolution states that the Resolution is owned by the RNC 'Paid for by the "Republican National Committee"'. Has anyone looked into this before I spend more time on it? I don't see anything at first glance of the RNC rules (https://s3.amazonaws.com/prod-static-ngop-pbl/docs/Rules_of_the_Republican+Party_FINAL_S14090314.pdf)

You sound like the losing team complaining about the ref.

Just to be fair - the people you are relying on (Rosner and Howard) stand to benefit monetarily from a recap release/moelis scenario. That doesn't necessarily discredit any of the above but it's important to understand incentives, conflicts of interest, and human bias.

I was googling around this morning and didn't find anything housing related either. This interview looks interesting though (only skimmed through it for GSE stuff so far) - https://www8.gsb.columbia.edu/valueinvesting/sites/valueinvesting/files/Graham%20%26%20Doddsville%20-%20Issue%2020%20-%20Winter%202014.pdf

Fair point, and I agree with what you said. But I'm looking at this from the perspective of a possible legal victory that would unwind the NWS. It's easy to say that voiding it as if it never happened would eliminate the seniors, but I don't remember anyone bringing up the undercapitalization issues it would create. It's probably moot anyway, any court decision that unwinds the NWS would get appealed anyway, though I don't know what would happen to all the dividends in the meantime. Perhaps they would go to escrow, being returned to FnF if the appeals fail and sent to Treasury if the decision unwinding the NWS is overturned? That would make a recap a complete nightmare because FnF wouldn't know how much capital they need to raise. I think you raise a good point though - I hadn't thought about it that way. Primarily because I think this ends with a moelis type settlement/recap (because what else can actually happen?)

Presumably if they were private and actually allowed to pay down the sr prefs & allocate their own capital, they would have also have done a capital raise whereby existing investors would be more than happy to pay down the 10% yielding senior debt in exchange for some dilution

I agree with you from the perspective of Ethereum being a utility for smart contract execution (i.e. a cheap agile UAT interface as you describe it). I have no conviction on Ethereum. Think it's possible the platform itself plays out in a bullish way with the coin itself being worth next to nothing (marginal utility cost for smart contract execution as described in the whitepaper wachtwoord posted a while back). But can you answer this question from the perspective of a cryptocurrency being valuable as a judgment and censorship resistant store of value? The value proposition is quite literally tied to the fact that it is completely removed from government decision making. Surely this is a strong counterargument against governemnt issued cryptocurrencies? I'm actually confused that the store of value thesis doesn't click with more people. Peter Thiel basically articulates the bull thesis as we have at 36min. Just seems incredibly +expected value right now.

The highest weekly closing price was at $12.31 on March 2014. Considering the source and the lack of any other news, I'm highly skeptical. Edit: Is this facilitating a block trade? Is this really how block trades ever work?

"(I wonder what that means"- value investing is the discipline of removing price/enthusiasm (december spike) from underlying fundamentals (censorship resistant store of value) and evaluating the spread. Nothing has changed. Maybe the optimism of those who watch CNBC? I would invert the google ban. Maybe it's a problem that centrally owned corporations can censor ads based on opinion?

Larry Kudlow - https://www.dropbox.com/s/soupvnqqu349wz3/20150718__Kudlow%20Show%20Fannie%20Mae.m4a?dl=0 Interesting. Is nobody worried that only pre-NWS are compensated?

Meh. Quote from Michael Berman: "As chairman, Berman's top priority will be to continue MBA's role in redesigning the government sponsored enterprises, Fannie Mae and Freddie Mac. "I am honored to serve our industry as MBA's 2011 chairman," Berman said. "MBA will continue to lead the battle to restructure GSEs with private capital and a new, clearly defined, but limited government role in guaranteeing mortgage-backed securities." Context of Michael Berman for those unfamiliar: https://www.nytimes.com/2015/12/07/business/a-revolving-door-helps-big-banks-quiet-campaign-to-muscle-out-fannie-and-freddie.html

Is it me or does he always excessively raise his eyebrows when talking about fannie and freddie? Also the pause and careful wording is probably another tell. And while typing that above I've realized how insane this trade has become. I still keep taking a step back and think there's only one realistic outcome but I also am conscious of how silly this is becoming.

I'd strongly distinguish between understanding and trying to understand. The paper you link hypothesizes some answers to these questions. We can discuss the details of those topics - but it seems obvious the question Emily wants us to answer is "what coin can I buy to get rich?"

Might want to have a reread if that's your takeaway...

I'm struggling here. In almost every post you've made I always walk away stunned at how well thought out and forward looking your thoughts are. Except when you reference central banks issuing their own cryptocurrencies rendering non-sovereign decentralized cryptocurrencies worthless. Surely you understand that the most attractive element of bitcoin or ethereum is its separation from authoritative governance? It's critical that a government cannot modify the supply and its critical that the cryptocurrency is censorship resistance (i.e. difficult to seize). That's the value...