DRValue

I was very tempted by the common if there are only 2 guarantors, but more than that will mean a race to the bottom on fees and it will only be a matter of time before the big banks capitalise a guarantor and charge rock bottom fees. I hate the idea of multiple guarantors. They're not necessary and risk won't be priced correctly. Imo the best route is 2 guarantors competing on price and heavily regulated to make sure there's no collusion. Sad!

Can this be anything other than a recap now these standards are out? Any one got the cahones to go all in yet?

Ah well I think you've figured out what I was sub consciously thinking of. Say that 7.2 billion shares are exercised at 2 dollars, that goes some way to recap. I guess what I really meant was that if spsas are repaid you couldn't give a rationale for exercising at $0.00001 in my opinion. Doesn't recap and the tax payer had already been made whole. I'd hope there would be some kind of law suit against the warrants but unless some very clever people tell me otherwise I'm guessing we're stuck with them. As unfair as I think that is.

Although I'm pretty certain the warrants will be exercised and almost hesitate to bring this up, take a look at the following from this treasury report at: https://www.treasury.gov/about/budget-performance/Documents/CJ_FY2012_GSE_508.pdf Need to maintain the Enterprises’ and the FHLBs’ status as private shareholder-owned companies – Fannie Mae and Freddie Mac may emerge from conservatorship to resume independent operations, or they may emerge in some other form reflecting legislative changes to their congressional charters. Conservatorship preserves the status and claims of the preferred and common shareholders. The value of the warrants issued to the government under the terms of the PSPAs could potentially increase, thereby providing enhanced value to the taxpayers. Upon the government’s exercise of the warrants, the GSEs would be required under the terms of the PSPAs to apply the net cash proceeds to pay-down the liquidation preference of the senior preferred stock. So, for the legal eagles, if the pspas are deemed paid due to the courts or through legislation, how would the companies have to use the funds? Do whatever they want?

Do we know much about him? Going to do a Google.

Not in the industry and have no degree or cfa (best described as an investment enthusiast) but my opinion (if it is worth anything)... You appear to tick the qualification box so any application you make won't be thrown in the bin immediately. You're a feasible hire. I would be sceptical as to whether any reports you write would get read (Who is this guy sending me this stuff and do i have the time to read it?). Without some form of personal connection to the recipient i wouldn't rate the chances. But I'm an industry outsider in the UK so it may be different over here. Make connections. Maybe there are some connected individuals on this forum that would be willing to read a report and put it in front of their team / boss? It's who you know not what you know (cringe). Didn't ackman hire a taxi driver? I think it's your best shot. Hit the road and meet as many people as you can. Network. Attend events. Go to a hiring event and meet HR face to face. Face to face works best for me as I can sell myself properly, make a connection and prove I'm a legitimate human being. Go entry level. May be a bitter pill to swallow but a 6 month stint could be all it takes to network and get a shot at your dream job. Raise you're profile. Get an online presence and use social media the best you can. Publish your report on your website. Demonstrate your ability. All of this "advice" applies to all jobs really. And I'm not trying to patronize you, I hope it doesn't come off like that. If i was in your shoes with the knowledge but without demonstrable industry experience, the above is how I'd do it. I hope you get your break.

Yes. Bob Corker told me.

The defence really infuriates me at times and the judges even more so. Normally goes something like this: "Whats left for shareholders?" "your honor, you have to remember the tax payers put up x billion dollars" And?? How does that impact whats left for shareholders?

Sounds like Treasury argued there are paths to shareholder recovery. Questioning about limits to FHFA's power is also encouraging. I'm not the only one that heard that, as Peter A. Chapman suggested the same (he listened to it before I did, and I thought it was noteworthy as well). I was planning on adding to my GSE positions this week anyway, and I didn't hear anything in the oral arguments that would change my mind. I noticed this too. I was very pleased to hear it and personally thought it was a massive mistake on her part, almost to the point that she was arguing against herself. Although previous defence lawyers had a somewhat plausible (sounding) argument, this would worry me enormously if she was defending me!

Sounds interesting.... do you have a link to the letter?

So reading that, the Sears sale would almost cover the Vista investment. Likely a combination of reallocation and redemptions. I've pretty much given up on lawsuits at this point. Bhatti is interesting but we'll see. Sweeney, I have no idea what's taking so long. It never seems to move.

You sell one investment for another if a better one comes along. Could be for portfolio rebalancing too. How do you know he didn't sell for redemptions?

https://www.foxbusiness.com/markets/treasury-unveils-fix-for-restoring-fannie-mae-freddie-mac I can't reconcile Mnuchin's comments about replacing the FHFA director with someone who supports the agenda. Didn't Watt write a paper advocating for a utility model for shareholder owned companies? What was in it that Mnuchin may not agree with? If he agrees with it, is the delay just so Mnuchin can get some leverage? Mnuchin said a government guarantee for 30 year mortgage was necessary but didn't say a model (implicit or explicit). Could be argued that an implicit guarantee is all that's needed.

Devalues the dollar I guess

It's a review website. Plenty of businesses on there have more than the 1 star.

https://www.consumeraffairs.com/finance/credit_acceptance_corp.html Consumer reviews for CACC. 2 things about reviews. You mostly hear the bad ones. Satisfied customers just go about their day. You only hear one side. But from reading some of them cacc are extremely aggressive. Feels like only a matter of time before it's picked up politically or by a regulator.

Thoughts on whether Tax reform had to be done before Fannie and Freddie, as Mnuchin knew they'd take a DTA hit and you wouldn't want to try and raise capital while the businesses declare a loss?

It's happened!! The Conservatorship could finally be over!! http://www.foxnews.com/entertainment/2018/03/27/britney-spears-father-reportedly-looking-to-end-stars-longtime-conservatorship.html

Off-topic political fight in 3... 2... 1...

lol there are people here who actually think the wall is a good idea? amazing. Let's put it this way. I'm from the UK. I own commons. I'd gladly accept (some) warrant dilution for the yanks to get their wall. I'm so far on the Trump train you don't even know.

Cigarbutt I'm close to the same conclusion. It feels like there's something here but trying to find it is difficult. For instance I've read that some of these loans have an interest rate as high as 25% and charge offs happen in the first 120 days. But then the car is sold at auction and losses made up. One reason that high interest rates have been charged is to protect investors buying the abs (according to an analyst) so I don't think securities demand will fall to business failing levels as defaults may rise but that wouldn't mean huge abs losses. Same goes for loans on the balance sheet. Might be worth checking the capital structure and maturity schedule of some of these businesses to predict some pinch points. I think cacc has issued equity and sold some bonds recently will have to check. Worst case I see is that this is the top of the cycle and mortgage rates are rising which together bring elevated losses and lower loan demand that'll hurt top and bottom lines. There doesn't seem to be a catalyst that will crater the abs and cripple the businesses that we need for the short, like a funding term mis-match or variable rate change. Autos as a whole may soften. Karmax (KMX) may get interesting, but that'll take an extreme scenario. Anything with low operating leverage in a down market might be interesting. Going to keep an eye on kmx cacc and sc but dont think this will be for me.

Just reading the CACC AR. They are clearly going after growth through the purchase program where the dealer has less skin in the game. Couple that with a lender who lends with no questions asked to poor to no credit borrowers and you have a recipe for disaster. I can't see a dealer turning down a sale here. Losses all depends on what they charge for the loans and the softening of the resale market value. More to do but if I can work out a catalyst there could be something here. Thanks for sharing.

Great write up! Very interested in this. The model seems to be make the loan and securitize it which makes shorting Santander consumer a bit less attractive. I'm trying to find auto loan lenders or investors that keep the loans on the books but Google finance is gone and I'm struggling. Also I can't find a sub prime auto loan index. With sub prime mortgages though the trigger was teaser rates ending and higher rates kicking in. What do you think the trigger will be here?

( But i must admit that i had this thought every year for the past 4 years ;D ) Same. And I don't think it will now myself cos of trumps policies. The west has been subsidising developing nations with trade deficits for years and changing the trade flows now should boost the economy. Add in the tax plan to depreciate purchases immediately for the tax loss and you have the recipe for a real boom. Short tesla had been on my mind. I don't think they ever hit targets but it doesn't trade on fundamentals so too tricky for me. Qqq and spg I'm not familiar with the tickers so will look at. May be a few days. Seem to spend all my time analysing these days and need to get away from these screens...

Thanks I'll take a look at that trade. I need to do a bit more digging into the underlying on that etf as from what I've seen the price movement may have already happened. But if you believe the curve will steepen, and the Fed forecast suggests it could, then there could be more of a movement to the downside.