waynepolsonAtoZ

Watt has said he would defer to Tsy on the SPSPAs including the 3rd Amendment. I think Tsy would need to change and then Watt would go along with it. Watt has already said he favors recap.

Chris Roberts case got shot down (Judge Chang). I knew him, Horatio. It really seems like the takings case is going to be the venue.

FYI. https://object.cato.org/sites/cato.org/files/pubs/pdf/working-paper-26_1.pdf http://investorsunite.org/teleconference-new-paper-shows-conservatorship-of-fannie-mae-and-freddie-mac-does-not-comply-with-the-law/

"I think it is a stretch to put the GS-alum of past administrations on par with the GS-alum of the current administration." JMHO, I think investor expectations are distorted. We'll know one way or another soon enough though. It will be interesting to see how DOJ responds to Judge Sweeney on April 17th. I'm still optimistic in the longer run though, with no capital by yearend 2017 being the key driver.

So what is GS's plan for the GSEs? Same old, same old, same as what Hank Paulson, Geithner, and Lew, have done over the past 8+ years.

Gary Cohn is on the rise at the White House. https://www.washingtonpost.com/politics/inside-trumps-white-house-new-york-moderates-spark-infighting-and-suspicion/2017/03/18/51e3c4d2-0b1c-11e7-a15f-a58d4a988474_story.html?utm_term=.91f5867f6fd3 With all the GS guys at Tsy and WH, it seems that the possibility of The Donald doing something for FnF investors is DOA. Recapitalization could still happen, but it will take a while.

"Mr. Mnuchin and Mr. Donovan will tackle not only changes to the corporate and individual tax codes but also the potential restructuring of the government-sponsored mortgage guarantors Fannie Mae and Freddie Mac." I have a hard time grasping that guys from Goldman Sachs will do something that is good for FnF investors. However, maybe the I bankers will make a ton of money handling the sale of the warrants and so on. Did the i banks make much money on the AIG transaction?

The date on release of documents is April 17, 2017. I'd guess that there is a 50/50 chance that they substantially lighten up on their privilege (secrecy) arguments in their April 17, 2017 filing. I doubt Tsy will change the sweep in March, maybe a one in 10 chance. If the Tsy/DOJ lightens up on privilege, then I wouldn't be too surprised that they did change the sweep so for the June payment, say one in three chance.

Yes, I bought some FMCKJ today at around $7 per share. Granted, I sold some other shares on Monday and I don't usually do much "trading." FMCKJ at least is easy to get in and out of (compared to some of the $50s).

"But does stopping Net Worth Sweep get's our $25 for FNMAS?" I would say yes, it does.

Well, this feels significant. https://www.nytimes.com/2017/03/10/business/trump-fannie-mae-freddie-mac.html?emc=edit_tnt_20170310&nlid=12864748&tntemail0=y&_r=0 I guess the key for me is that they can't recap in any meaningful way without treating existing investors fairly.

Jim Millstein's the only good one of that batch. http://www.urban.org/policy-centers/housing-finance-policy-center/projects/housing-finance-reform-incubator/jim-millstein-administrative-plan-restructure-and-reform-gses

I downsized my position earlier this week. I don't think Mnuchin (or Trump) will do anything for us, or rather my pessimism has increased lately, leading me to reduce my position.

"From Trump University to his litany of failed projects and developments, Donald Trump is infamous for the bait and switch, selling fantasies of luxury, then ensnaring buyers in schemes of wealth extraction. As president, Trump is making this an ethos of government, promising to help the disadvantaged, and using that mandate to slash benefits and funnel tax dollars to the wealthy and connected. The Trump image always has been and continues to be a con, and we, the American public, have been had." http://www.slate.com/articles/news_and_politics/politics/2017/03/trumpcare_proves_that_trump_s_promise_to_take_care_of_rural_voters_was_always.html?wpisrc=burger_bar

"not optimal, trusting fox to decide re 11000 other hens." Still, Sweeney may have sensed that the Trump Administration might look at this "policy call" and reverse course. Seems possible. "Sneak peek" would still be possible even if the Administration wants to keep the stuff secret. Here is where WH might disagree with Treasury/DOJ and get them to change course.

Lazy question, does anyone know the names of the judges in the district court cases that are still active? I believe IL, IA, and TX. DE seems dead for now?

Does HERA allow the treasury secretary to do this while in conservatorship? How are all existing shares cancelled - what technically happens? If it happened, wouldn't the gov't have to consolidate FnF into its capital structure? This would be why the warrants are only for 80%. FnF are still investors-owned companies, but if someone owned 100% of FnF, the parent usually would have to file consolidated statements. In other words, the gov't would have to add $x trillion of FnF debt to the gov'ts balance sheet.

Q. Did you meet with the Russians? A. No. [but what I meant was that I didn't meet them with my "campaign hat" on. However, I did talk to the Russians while at the convention and then I had a meeting later where I "may have" talked about election stuff.] If he just has to recuse himself, that might actually be better. He wouldn't be able to lead the DOJ on the Russian issues at all.

I wish silent keyboards were more common. I hate listening to someone type during a conference call.

Asset concentration risk is a problem, a problem many if not most rich people have.

I wasn't wrong.

"if reheard en banc, the merits panel decision is voided" en banc is active judges, 7D, 4R, good luck.

$6.4 b of deriv gains in 4Q2016

I want to echo Fairholme's comments in their report to shareholders that "As interest rates rise, Fannie Mae’s and Freddie Mac’s portfolios become even more valuable – and we anticipate that Q4 2016 results will reflect this positive impact." I'll leave it to you to compare the yield curves for 4th Q 2016 (Sept 30, 2016 and December 31, 2016) and 2nd Q 2015 (March 31, 2015 and June 30, 2015). It's easy to do here. https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/Historic-Yield-Data-Visualization.aspx Point is that the Treasury yield curve went up a LOT in the 4Q2016. This means deriv gains not deriv losses given that this line item is marked to market each quarter. I used 2Q2015 as a comparison. Deriv gains were $3.135 b that quarter. Note that interest rates went up a lot more in 4Q2016 than they did in 2Q2015. On the order of 20-40 basis points at the short end and 40-50 bp at the longer end. Note that 3Q2016 deriv gains/losses were negligible so we may be looking at total comp income for Freddie Mac that is $3 billion or more higher than last quarter. The 10K should come out first thing tomorrow am.

"fed doesn't regulate GSEs. not sure why she is even answering questions about GSEs." Fed doesn't directly regulate the FHFA, however, the Chairman of the Board of Governors of the Federal Reserve System (Yellen) is one of 10 voting members of the FSOC. The FSOC can veto actions by the FHFA via a 2/3 vote of the 10 voting members. The Tsy Secretary is chair of the FSOC. FHFA Director Watt is also a vting member of the FSOC. Needless to say, this is an important duty for the Treasury Secretary and Yellen, who will inevitably be the ones that the other eight members will look to for guidance. So, yes, Fed does "regulate the GSEs" given that it shares oversight authority with respect to actions by the FHFA. Anyway, this has been a source of confusion viz a viz the CFPB. Circuit Court Judge Kavanagh wrote a clever but ultimately dumb--and apparently non-binding--decision complaining about the CFPB director having "too much power." I believe Kavanagh totally ignored the existence of the FSOC veto authority (though I haven't double checked). As an aside, this is relatively comparable to the regulatory structure of the National Energy Regulatory South Africa (NERSA), which has a nine-member tribunal, five part time and four full time. The four full time members are responsible for gas pipelines, electricity, and petroleum pipelines, plus the CEO. So, the full time member on petroleum pipelines, for examples, takes the lead on the regulation of electric utilities, with final decisions decided by a majority vote of the full tribunal. People have sometimes argued that FHFA should have a multi-member commission like the FERC or FCC, which wouldn't be a bad idea. They would at a minimum have to start following the APA of 1946, something the FHFA currently barely even pretends to try to do a little, when convenient.