waynepolsonAtoZ

"But then, a communist President took over." Well, if it's fair to say that Obama is a communist, then it must also be fair to say that The Donald is a Nazi.

My quick take- Mnuchin-bad. Watt-good.

True, but why will the status quo change? Yes, there is DE, which could play out relatively soon, and, eventually, there is the Court of Federal Claims, but, in the short run, Mnuchin is hopeless and Watt is OK but relatively impotent. It was clever to do the SPSPAs in a way that requires both TSY and FHFA to sign off on changes--given that TSY never will in a million years ever do something good for someone other than their Wall Street paymasters.

"b) he has a master plan and is saying absolutely nothing so that he can roll out whatever it is when desired with zero hints that could throw it off course." The catch is that his master plan is to do what's good for Goldman Sachs, not what's good for America (or us).

"love that watt said his peace...which gives democrats succor. " Love that one. Freudian slip?

"Huh???" That's my concern. As a practical matter, the commoners and preferreds are dead in the water. Not explicitly, but FnF equities are pretty much dead--other than the senior preferred stock, LOL. And, Treasury and Calabria seem to like it that way. Treasury is Treasury is Treasury--it doesn't really matter who the President is, the financial oligarchy is in control of Treasury. Sweeney really is the only one that is going to save us on this one I think. Mnuchin, I think, is a bad guy although hard to be sure. I've always thought that FnF can't be recapitalized if existing shareholders aren't treated fairly. But, Trump is President, so anything can happen (i.e., pigs can fly). Maybe it can be done. Anyway, Sweeney is the key at this point. I seriously doubt she's going to dismiss her case, but one never knows.

"imo mnuchin will likely go through the motions in 2018." I like your scenario. I tend to view Mnuchin as a bad guy for FnF, but one never knows for sure.

I was only good at market timing once, buying heavily in the July to Dec 2010 period. I just wanted to give "fair warning" to the extent anyone was interested in a different opinion. I do think the stocks I swapped into also have good if not better prospects in the next couple years. Still, I'll be looking at this stuff this weekend to try to see what's what.

Here is another thing. https://www.nytimes.com/2017/12/03/us/politics/government-shutdown-republicans-congress-spending.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0 My thought being they aren't going to give up on the sweep unless they have to. I see a correction coming in terms of the valuation of the preferreds in the market. However, I'm 100 percent out of the FnF preferreds, so take it as you will.

"What else is to fear?" The thing to fear is that Rs hate FnF.

"That little gem is a diamond, big one, we need it, we must have it." Just to state the obvious, if they get that enacted they will put another DeMarco in place, someone that truly hates FnF.

Fair enough. Another thing is that a serious attack on the health care industry could cause a recession. Health care is 1/6 of the economy at this point. https://www.theatlantic.com/politics/archive/2017/06/the-ahca-recession-report/530322/

Hi! I just wanted to mention that the "ACA sabotage" is expected to add $6 b to the deficit in 2018, $21 b in 2020, and $26 b in 2026, if I copied the numbers right. http://www.slate.com/blogs/the_slatest/2017/10/13/voters_think_trump_owns_his_obamacare_sabotage_republican_politicians_agree.html It seems increasingly likely (to me) that the gov't will not give up on the NWS anytime soon.

Does anyone have a transcript of the hearing? Exactly what did Watt say about 2 to 3 percent buffer if no c'ship during the hearing? Does Watt in fact say that if FnF aren't in conservatorship they should be considered SIFIs and have $100 b to $150b in capital? In other words, the written testimony is one thing, but I'm more interested in what he actually said during the hearing live under questioning during the hearing. Let me know if anyone finds a tr. of the hearing.

"while watt knows far more than you and me about the GSEs, mnuchin knows 10x more and almost certainly will be the driver -- watt is most likely along for whatever ride, just like always." Maybe, but that surely would be a bad thing, correct?

"Watt has explicitly wrote multiple times that a buffer would not be a step towards recap/release. How do you balance that against the requirement for Watt to sign off on an administrative recap/release?" Where, specifically, has he said this?

"On Tuesday, October 3, 2017, at 10:00 am in Room 2128 of the Rayburn House Office Building, the Committee will hold a hearing entitled “Sustainable Housing Finance: An Update from the Director of the Federal Housing Finance Agency.” The Honorable Melvin Watt, Director of the Federal Housing Finance Agency, will be the sole witness. The purpose of this hearing is to receive an update from the Federal Housing Finance Agency (“FHFA”) on: (1) measures the FHFA has taken as the conservator of Fannie Mae and Freddie Mac; (2) the FHFA’s current Strategic Plan for Fannie Mae and Freddie Mac; (3) the current financial condition of Fannie Mae, Freddie Mac and the Federal Home Loan Banks (“FHLBs”); (4) the current state of private sector participation in the housing finance market; (5) whether adequate steps are being taken to encourage additional private capital in this market; (6) additional actions the FHFA has taken as regulator of Fannie Mae, Freddie Mac and the FHLBs; and (7) the Director’s views on housing finance reform." https://financialservices.house.gov/uploadedfiles/100317_fc_memo.pdf

While eschewing cause and effect, I'd say he's a warning to others. Granted, it must not have been too hard to dig out the dirt on him, but a lot of interesting stuff was found and publicized. The Rocky Top politics blog is one example.

"If so, wouldn't Fannie and Freddie make lot more money?" As a general matter, if the Treasury goes up then FnF would have substantial deriv gains related to their hedging of their interest rate risk.

"Great comment." Yes, it's a reasonable way to interpret recent events. I think it's great that Craig Phillips now has "permission" to talk to people and he is reportedly doing so. I will also say I'm glad I'm preferred. Even though it can readily be said that Treasury is now actually or virtually fully repaid (including interest at 10%), it's human nature to want to get even more for Treasury to go forward. So, no big surprise that the warrants are likely to be exercised. Freddie has already made it, Fannie is almost there. Note also that Alex Pollock isn't at AEI anymore. I was wondering why he wrote something that was reasonable. http://www.rstreet.org/op-ed/fannie-and-freddie-face-the-moment-of-truth-on-their-taxpayer-bailouts/

While I'm not especially over-confident about Mnuchin's reliability, one way to interpret his recent moderation is that he's trying to position himself as The Decider, i.e., trying to [avoid] pre-judging the issues. Then, at the right time he would look at all the available evidence and say, based on the "record" before me, I think it's time to end the NWS and recapitalize the GSEs. I guess it's possible. [i had to edit this.]

Weird that D Sen letter and RNC documents are being publicized seemingly simultaneously. No matter. They might hypothetically gotten more attention if they had been released right at September 6 or so, the anniversary of the seizure. No matter, things are looking up.

OK! Gotta love the RNC document.

Financial services roundtable. http://www.fsroundtable.org/ed-demarco-lead-fsrs-housing-policy-council/

DeMarco is NOT on the Milken Institute team?