Desert_Rat
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Posts posted by Desert_Rat
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Well, honestly, the court outcome never seemed like a strong bet to me in the first place--courts have a way of not coming out the way you think it should, as it just did. I think Mnuchin is the reason this thing became much more compelling. He's basically the same type of guy that would hold these things, and he wants the government to get out. If he wants the government out, he needs private shareholders to be at the table. If he kills all these shareholders, then they aren't coming to the table.
But maybe someone can throw out an interpretation where Mnuchin can get it out of government control, replace it with something else, and still kill the value of the companies? He could liquidate, but that doesn't seem like the language he's using. If he isn't liquidating, then there needs to be some public value to the companies for them to exist.
+1
Although Mnuchin has simply made it more compelling. I won't consider the Fed violating the 5th forever here, and not just for the precedent it would set. There's housing reform to accomplish too and if the Fed wants out, who does it expect will ignore what happened last time? Insuring and selling MBS will become substantially higher.
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[police says he answered other questions than what's shown in the fox segment about Swedish crime]
[fake news factories driven by poor guys in Macedonia, buying jeans for the american clicks]
Not directly investment related, but to me it seems we are approaching a Point in a few years where politics could have real influence on investment values, unless more people start caring whats true and not.
What is this? There are obviously some serious issues in W EUR: https://translate.google.com/translate?depth=3&hl=en&nv=1&prev=search&rurl=translate.google.com&sl=sv&sp=nmt4&u=http://www.friatider.se/upplopp-i-rinkeby-polis-skot-varningsskott but even me, a staunch anti-globalist, understands that it takes years, even decades for refugees to integrate into a society. I'm wanting to give them a chance, as long as it's not here, in the US, where we have enough social issues to contend with.
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@jurgis you say "Do you think that govt can afford the return of full NWS to GSEs without a big budgetary issue?"
have you thought that the NWS would be retroactively voided through a 4th amendment, converting all excess dividends into principal repayments?
you say "Settlement that does not invalidate NWS. I see how this is reachable for prefs (just return par value)",
you seem to think that if the NWS was just "stopped", junior prefs would go to par...but in fnma case, senior pref would be $117B bearing 10% and junior pref would be worthless.
there will be no P settlement without retroactive invalidation of NWS.
if you own junior prefs expecting the NWS will simply be stopped, i suggest you sharpen your pencil
I don't understand. Since the NWS (3rd amendment) didn't call for anything other than a sweep of all net earnings, if it is simply 'stopped' it is null and void. And, similarly, if the usurious 10% dividends are amended to something reasonable, these preferreds will still appreciate. It won't be the home run I'd like to see but they will appreciate.
Munchkin, yeh!
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I believe it was around that time when they had fully repaid treasury. Stakeholders were expecting release.
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I think the point was that he owns a ton of it.
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I'm surprised no one here shares my opinion that the biggest risk is the GOP, which, on the whole, just wants us dead. Housing reform, of which FnF is a part of, will take a majority to implement. Doesn't matter what Mnuchin thinks, although he could throw a knuckleball and save us alone.
If I can hear a credible reason why this is baloney I'll think hard about going all in. It's the biggest risk, imo.
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I was very unclear when I said All junior preferred would then be called. I don't mean immediately, I mean as part of a transitional plan. Their dividends would remain suspended, then capital requirements are met, then they gotta do something with them. Calling them at that point does make sense.
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I think for optics sake, they get out of all holdings almost immediately. If the issue is government control of FnF, saying 'we're not involved in financing homes anymore' doesn't jive with owning most of the two companies. That means, possibly, the senior preferred are sold back to FnF at face, $1b. That one's easy. The warrants are too, although I have no idea how they would be priced. But I guess that wouldn't really matter if the goal is separation.
All junior preferred would then be called with no dividends issued during the transition. Paying that $40b will take a while but it will be FnF controlling it.
The common would be subject to those costs/time plus capital requirements.
and i'd be ecstatic
I just don't think an immediate recap makes any sense. There's nothing wrong with them coming out with a plan that takes 3-4 years until complete resolution. It would make zero sense to call the prfd's as that only worsens the capital picture. Why would they structure some payout for prfd and reduce retained earnings when they can convert to common and avoid div payments? The more I look at this, the more I see value in the common shares as a key. Maybe I'm 100% wrong and just don't get it.
When I look at the massive dilution to common as a potential path and what the gov would make, ramifications etc. as opposed to a much more intelligent plan that makes the gov just as much money, why not go with the plan that encourages future investment, higher pps and protects all shareholders.
Because most of the preferred require outdated dividend payments, and FnF can't just continue making $billions$ and not pay them. Best to replace them, in time, at realistic rates.
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I think for optics sake, they get out of all holdings almost immediately. If the issue is government control of FnF, saying 'we're not involved in financing homes anymore' doesn't jive with owning most of the two companies. That means, possibly, the senior preferred are sold back to FnF at face, $1b. That one's easy. The warrants are too, although I have no idea how they would be priced. But I guess that wouldn't really matter if the goal is separation.
All junior preferred would then be called with no dividends issued during the transition. Paying that $40b will take a while but it will be FnF controlling it.
The common would be subject to those costs/time plus capital requirements.
and i'd be ecstatic
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Hi all. I'd like to say hello and also thank all the members of this board for keeping up the conversation over the years.
Preferred owner since Lamberth.
My 2 cents on recent topics:
1) My greatest fear, the only reason I don't go "all in", is the fact that Trump only has GOP support in both houses and too many of them will always want FnF to burn. I'm not confidant even Trump can push housing reform to our liking. He could introduce a bill that wipes clean all residential mortgages and the Dem's would still reject it.
2) I think the reason the preferreds are doing better than common shares is because people are reading about the gravy train and are wanting the safest passage possible.
FNMA and FMCC preferreds. In search of the elusive 10 bagger.
in General Discussion
Posted
Would someone explain?
6
The class plaintiffs had also alleged that the failure of FHFA and
Treasury to provide just compensation for taking private property
violated the Takings Clause of the Fifth Amendment. The district court
dismissed that challenge for failure to state a legally cognizable
claim, Fed. R. Civ. P. 12(b)(6), and the class plaintiffs have not
challenged that ruling on appeal.