investorG

the moelis presentation is huge -- these guys are pros -- and I advise paying attention.

agree on legal. on administrative, it's tbd I believe -- why fire an empty weapon now when in 7 months you'll get a loaded one? the Sweeney case, if it's not thrown out, is a multi-year process. the 11k documents are perhaps good for public perception but they don't seem relevant for the 4 appeals court cases (maybe one will side with Judge Brown) and Delaware.

interesting. probably important not to dismiss. i'm guessing a solution where FnF exists but with material competition and thus a lower earnings base. this would likely satisfy the banksters. the shareholders, in return, could get cancellation of warrants / sr preferred (govt's been paid back with full interest), and preferreds voluntarily tendered to common (using threat of no dividends during capital building phase). capital raised through retained earnings and equity offerings (hence hiring MS treasurer as deputy cfo). lawsuits dropped. or maybe all that's just too simple....good luck everyone!

not bad news that the trump budget release (in the analytical perspectives section) removes all the harsh language from Obama's admin regarding winding down the GSEs and notes that the future $200bn+ of expected revenues from the GSEs is subject to revision based on potential reform efforts.

timeline for a positive resolution of Sweeney + any appeals seems years away. imo we need a legislative / admin resolution and/or one of the 4 appeals courts (st louis, Chicago, Cincinnati, and eventually texas) to side with judge brown (she's already laid out the argument, no need for additional work).

I'm seriously worried about a private settlement. Not sure the nuances of timing between the announcement of the settlement and ceasing trading of the shares on the OTC, but in theory you settle the cases with the existing plaintiffs and wipe the current shares so no new hedge funds can sweep in and restart the process. most people don't go out of their way to be nasty to others. even though some unnamed journalists and senators might, i'm betting that the general consensus in the end will provide solid benefits to public shareholders (although paling in comparison to the gov'ts windfall) relative to current price levels. we're betting on the American spirit here, imo.

Does anyone here thinks we will lose Delaware and Sweeney case? let's put it this way - I don't expect a win. to me, more relevant for any document releases and a backdrop that facilitates an eventual settlement (not any time soon).

yes. maybe a tad less like 20-25pct, and a mix of common and preferred.

it's kinda relevant -- warner did say with foreign subsidiaries so it wasn't directly the GSEs but it was, I think, a trick question to get him to bite. Mnuchin, I thought, did well by not taking the bait. overall I thought mnuchin did well today, better than before.

As previously stated, I think Watt went rogue. Mnuchin does not approve. on the record, yes he disapproves --- I hope everyone realizes how important it is for him not to irritate republicans in congress over the near term with hc, taxes, budget, and debt ceiling between now and year end. not to mention trump's Russia problems. trump's awful start and Ginsburg put us in a terrible short term position. in reality, there's a great chance he admires it.

With him saying he wants payments to continue and wants to work with Congress, he might be trying to slow down the Corker's and Warner's of the world from trying to push something through legislatively. It just seems odd that Watt did a 180 and wants to retain capital when coupled with Mnuchin's comments. If Mnuchin came out and said that he agrees with Watt and the capital needs to be retained then Corker, Warner, etc. would likely be in a much bigger hurry to push things through. Just a thought, could be off-base and perhaps Mnuchin really does want the payments to continue. agree. he's got a plan which is: it's not good to piss off the congress Repubs at this moment. Watt can do this on his own, and from corker's comments watt is firm in his view.

He also said he has a strong preference to working with Congress on this issue. Did anybody catch the quote for the 75 day thing? Corker said something about 75 days... he's suggesting the june30 payment is going through and so the next decision point is early august when they report 2q earnings.

i'm satisfied so far. he left open the door for admin action if needed. and he's playing by the book on the dividend, his view is clearly now (nws) and in the future (fees), the treasury needs to get paid for their backstop / guarantee. he's way smarter than you or me, he's playing the long game not trying to pump up the security prices in the near term (and piss off our enemies) when his power doesn't pick up for 8 months. so the key here is what's his real end game goal -- I have my view but it's just a guess.

Perhaps it is just a terminology issue but the preferred's can be redeemed. Series R: Optional Redemption by Fannie Mae: On or after November 21, 2012 at $25 per share plus accrued dividends from the most recent payment date Series S is more complicated, not sure how this would be handled: Optional Redemption by Fannie Mae: On December 31, 2010, and on each fifth anniversary thereafter, at $25 per share plus accrued dividends from the most recent payment date, whether or not the dividend was declared it would be a tender rather than a call. it could settle lawsuits. likely done @ a reasonable price well above current levels and decently below par. but that is about 10 steps ahead from now, so not too relevant at the moment. we're still in a firm downtrend for the last 3 months.

imo its better to own both given the uncertainty. currently I have a mix of 70-30 common / preferred but I change frequently depending on relative outperformance. why own common too? --- a) it's priced closer to 0 if things go bad (optics matter for some people), and less hedge fund ownership b) it's possible but hard to justify crapping on the warrants while giving 3-5x payouts on preferred c) the preferred-centric court cases seem like low-ish odds for material payouts and even so appear to be 2018 events I do think there is a false sense of security among some preferred holders, even though I believe it's important to have a mix of both. it's somewhat pathetic all of the arguing on some of the boards about common v preferred, but I guess when things aren't currently going our way then these things happen. Tim howard's latest comment on his blog sums it up for me -- mnuchin needs legislative failure and/or some court changes to happen first before any potential administrative solution which means the near term catalysts, aside from the sweep potentially stopping, aren't too visible. I do think the securities still represent great value at these levels.

people may very well sell on this but he taking them out of conservatorship - which is what he references - is likely many years away even in a favorable outcome. imo better to focus on what's right in front us which is a) sweep b) court case miracle c) hints on priorities for future reform and d) anything else I'm missing.

Assuming the NWS is paused/stopped in June, what do you all perceive as the major risks going forward for preferred shareholders? I'm intentionally not including my opinion in this post as I don't want to influence thoughts/opinions/comments. Thanks in advance for commenting! I'd say the risks are they propose a plan that doesn't re-instate divs for a long period of time or that maybe they force a shitty conversion deal. I'm more optimistic though that they would rather pay us off so they can re-issue new jr. Look forward to hearing everyone's opinions. preferred risks: --- trump kicked out --- mnuchin's plan surprisingly doesn't include GSEs --- dumped into receivership which creates uncertainty / timing risk --- the ackman / icba plan of building capital over time and not paying dividends for years set against obviously many positives. i'm surprised the security prices are this low after yesterday's hearing, it could be the first item on the above list impacting things.

I don't see it as he went rogue, more like doing his job, and I'm curious why you think he didn't have mnuchin's blessing. All I heard was watt didn't want the congressman encouraging mnuchin not to negotiate with watt to build a capital cushion through minorly adjusting the agreement, so he could dance with 2 people instead of one (unilaterally withholding dividends).

I disagree - given the congressional R's obsession against the GSEs and Mnuchin's limited power regarding the sr preferred through year end, I believe the only action one could realistically hope for this year is stopping or altering the sweep, which is now officially in play. And Mel Watt, for today at least, was more friend than foe in his answers, I was impressed with him today. edit: I do also think phillips and mnuchin's comments are also extremely important because they will shape the final reform.

I believe Mnuchin and Phillips are in a good position to shape things --- the committee is not terribly sophisticated and is certainly not in agreement. However their power increases materially later in the year, all things equal, and so a long year of roller coaster debate is likely with some court case noise in the background.

does anyone know when mnuchin's testimony is next week, or also when craig phillips is speaking (from the wsj article). thank you

I'll tell you what is not ambiguous... If this comes from Larry Fink, which it does, he firmly believes shareholders were toast in 2008 and further toast in 2012 and should be completely wipe out. He believes hedge funds are vulture speculators of the worst order. On the other hand, he is an Obama man so his report may now have less weight. About the only worrisome fact is the infiltration of Craig Phillips, a blackrock fellow, into Treasury. big difference between 08 and 12, and fink is smart enough to know it. in 08 yes they were toast bc they were capitalized at virtually nothing when the credit provision costs exploded. however the govt chose to keep them alive due to their own self-interest, not due to pity for shareholders. and then in 12 the GSEs were chugging along ok, even though they had a long road still ahead of them. it was either a crime or morally incomprehensible to change the deal terms and initiate the sweep. imo it's fine for all the various constituencies to state their arguments for reform, whether they are pro or anti GSE. however the media and the decision makers need an urgency for fairness, whereby all parties' rights are respected.

does anyone know where we stand in the timing of the Collins case in texas, are we simply waiting for the verdict? thank you

corsi has proven his mettle on the GSEs, more so than the vast majority of other people in this orbit. he's sticking his neck out for the little guy and working quite hard.

the current mnuchin defenders are off base imo. he is dirtying his hands with the stench of the NWS because he is acting weak overall and chooses not to risk upsetting congress, rather than taking the bull by the horns and saying he won't stand for theft. moreover he hides behind some spokeswoman instead of saying it himself. he still has great potential. my hopes for 2017 for him were not high --- we understand his leverage increases in jan-18. all he had to do this year was stop the sweep. it is what it is, my expectations were wrong. good luck everyone!