SnarkyPuppy

This is quite literally what Calabria discussed a few years ago (YouTube video posted previously in this thread). Also consistent w his prior writings. Is this explicitly inconsistent with anything munchin or Calabria has said publicly? Immediate thing that comes to mind is "there will be two companies called Fannie and Freddie" in 5 years as Calabria had said publicly. But in the aforementioned YouTube video he quite literally talks about creating an LLRE which has a 5 year life. Sure would be one way of a "waking congress up and accelerating the process of getting them to act" Would also be consistent with "the companies will be on their own to build capital". Obviously I don't think this is a realistic outcome given risks involved but Calabria seems to have some challenges with realistic constraints.

Why the action by Otting then? Under this theory, he either acted on his own or the plan has changed

the meat of Collins is in the APA claim IMO. it's cleaner and more direct. In addition, Calabria's change is an attempt to protect his job for a full term which makes sense. the pending Collins verdict is huge. a loss, and we're at the mercy of the govt, price targets and goals will likely be cut for both preferred and common. a win, and we have a real seat in negotiations. guessing here, but that's likely why things are stalled, everyone is waiting for this. I'm nervous for the outcome. Good luck, everyone. This makes sense from Calabria's perspective but I think the negative way of looking at this is from a signaling perspective. This seems to be a clear signal that Otting and Calabria (and through possible extension, Mnuchin) were not necessarily as coordinated as I initially thought. Part of why I've been ignored the noise of some of Calabria's comments is the simple thesis that these extremely calculated men in high visibility positions are not publicly commenting an a restructuring with massive execution risk without clear coordination and strategy behind the scenes. The amateurish about face on the constitutionality claim seems to contradict this thesis. The bullish way of looking at the change is simply to try to buy time on the release of the Tsy plan and Sr Pref amendment. But if that's the case, it necessarily implies that the plan is inconsistent with a positive remedy from the en banc ruling...

Fair, my comments were unnecessary and didn't add value. Apologies. This thread has been extremely beneficial to me.

So now fhfa believe it's constitutional. Trying to push the decision back? Would that even work? Wow. I was busy working yesterday and just saw this. :o This is mind blowing to me. Once again the price behaviors change and TA warnings all over the place before bad news came out. Forecasting is always easier in hindsight This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight? LOL. I can't talk about the past. I can't talk about the present. I can't talk about the future. What can I talk about? Well humor me then. What happens next? I don’t have a clear view of that right now. I'm stunned

So now fhfa believe it's constitutional. Trying to push the decision back? Would that even work? Wow. I was busy working yesterday and just saw this. :o This is mind blowing to me. Once again the price behaviors change and TA warnings all over the place before bad news came out. Forecasting is always easier in hindsight This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight? LOL. I can't talk about the past. I can't talk about the present. I can't talk about the future. What can I talk about? Well humor me then. What happens next?

So now fhfa believe it's constitutional. Trying to push the decision back? Would that even work? Wow. I was busy working yesterday and just saw this. :o This is mind blowing to me. Once again the price behaviors change and TA warnings all over the place before bad news came out. Forecasting is always easier in hindsight

Have any more wisdom to share?

Did you guys forget about the part where Calabria, an extremely calculated individual, went on public TV and reiterated IPO while referencing conversion or par for preferreds like 3 weeks ago? None of these weird theories would be discussed if the market price hadn't dipped a little bit.

The problem with this reasoning is that you can: A. Attach it to anything B. It has no upper or lower bounds. Which is how speculative bubbles start and end. Under this reasoning, there’s almost no upper limit to pay for bitcoin - and no way to even determine a price that makes sense or not. It’s easy to say “the upside is infinite and the downside is capped”, but the truth is you’re picking statistics at random. Why should there be a 50% chance of 1000-1 odds on bitcoin? How do you know it’s not a 1% chance of 10-1 odds - how would you do this in a rigorous way? It seems too easy to fool yourself with these number games. That's fair on probabilities. But I would argue that bitcoin has a greater chance than anything (your point on "you can attach it to anything"). Bitcoin is the first value transfer mechanism that exists without counterparty risk... I don't think you can say that's equivalent to trading beanie babies.

The discussion is not Gold vs Platinum vs Silver. The discussion is bitcoin vs Gold/Platinum/Silver. The thesis is that bitcoin has attributes which achieve the objective of non-sovereign depreciation and censorship resistance in a materially superior manner. In the short term, while conviction on this is much lower, there's arguments to be made that the odds of a significant increase in price (relative to a significant drop in price) is likely simply due to increases in liquidity (institutional ownership) and sovereign/institutional game theory (every country outside of the US would benefit from a non-USD reserve currency; pension funds will be asked why they missed bitcoin again). Let's be perfectly clear - this is not investing; it is speculation. But there is such a thing as intelligent speculation. If someone offers you a gamble- put $1k with a 50% chance of winning $1mm and a 50% chance of losing the $1k, if you don't take the bet then you can claim Warren Buffett disciple status but you'll still be an idiot. Gold's market cap ($7tn) is a simple proxy for a non-sovereign depreciation and censorship resistant store of value. Should bitcoin be worth $1tn, $3tn, $5tn, $7tn - I don't know. You don't need a scale to know a man is fat.

Discount to what? The closest comp to a depreciation resistant non-sovereign store of value that exists today By that measure platinum is a far better investment, right? No - the qualities of bitcoin are superior to gold and platinum for similar reasons

Discount to what? The closest comp to a depreciation resistant non-sovereign store of value that exists today

Is there a reason you are purposely ignoring the bitcoin = gold thesis? Yes, there is. I don’t like gold. I don't either. I do like gold at a 95% discount though.

Is there a reason you are purposely ignoring the bitcoin = gold thesis?

I'd imagine your biased leading question can be answered the same way as the following question: If I invest $1 in USD (theoretically) how much of that dollar goes to support criminal activity or subversion? I have a follow-up question for you: Can you please articulate in clear terms with evidence how Bitcoin is supportive of criminal activity in a greater manner than physical cash? Please address in your answer the manner of which Bitcoin by definition is publicly traceable forever and physical cash is not publicly stored on a ledger/can't be traced.

Please provide evidence to support your claim that volatility has been "increasing over the past few years"

Possibly my favorite part about bitcoin is those who continue to scream tulips/bubbles/scam over and over again without thought, as if blessing the "scammers and gamblers" who own bitcoin with their infinite wisdom. Will continue to do so as bitcoin transitions to a multi-trillion dollar mature non-sovereign censorship and depreciation resistant store of value?

And on the flipside...

It's interesting to me that the administration has been signaling release of a completed plan for the month of June 2019. The timing aligns closely to the en banc decision and that seemingly hasn't impacted their timeline for releasing the plan. I see three options as a result: a) They aren't actually releasing it in June 2019 - or they are waiting until en banc comes out. b) The plan is so high-level that is compatible with a positive and negative (for shareholders) en banc outcome. c) The plan notes that Tsy has been repaid and the sr pref must be eliminated, consistent with a positive en banc outcome.

And.... FHFA recommendations for legalislative action came out this morning. https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-2018-Report-to-Congress-Includes-Legislative-Recommendations.aspx

New article today https://www.wsj.com/articles/regulator-to-press-congress-to-act-on-mortgage-finance-revamp-11560337204?redirect=amp#click=https://t.co/rPGBeVanRR Its becoming increasingly clear that the administrations plan to reduce recapitalization execution risk and attract "private capital" is to ask congress to implement changes prior to a clearly defined recap start date. - Regardless of whether congress acts, there will be some form of guarantee (explicit securities based guarantee from congress or moelis backstop administratively). - One wildcard is increased competition via changes to charters - but fnma/fmcc if nothing else have a head start with infrastructure, timing, brand, IP, and existing business portfolio - see cherz comments above for more in why this isn't necessarily the end of the world scenario. For years FMCC securities traded at a discount to FNMA securities for no clear reason other than brand. Potentially...this applies to non FNMA/FMCC in the same manner By communicating a clearly defined start date for administrative-only recap, the admin is signaling to the market that it recognizes the "legislative risk" that private capital clearly cares about, but is also basically providing congress with a deadline. Implicit in this structure is the hope that if congress can't enact anything with a deadline in place, the market will be incrementally more comfortable that there won't be any changes

Right- I don't think it's likely but it would be a way of recapping them very quickly ahead of elections. Just trying to come up with some unique ways we can get f'cked.

Nothing stopping BRK from asking for a ridiculous coupon and getting it

As others are discussing on twitter, it's interesting that he delineates between IPO and Private Capital. Private capital could be a rights offering where existing investors contribute (might account for why Berkowitz has been positioning himself so heavily in cash). But it could also mean a Buffett or Blackstone sweetheart deal which could be a risk here. FHFA as regulator can deem current senior prefs repaid while also saying oops you're undercapitalized - and duty to safety/soundness warrants a swift recap - and Buffett/Blackstone put up $150bn in new senior prefs in a private placement with the government. What's stopping FHFA from making this deal while FHFA is in control? Of course this negates the value of the warrants but possible Calabria/Mnuchin don't care? The situation I described, while I don't believe is likely due to warrant incentives, is entirely possible and would F* jr prefs. Not clear what legal recourse there would be given the sr pref deemed repaid overhang would go away...