allnatural
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Posts posted by allnatural
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"Today, Boyle Capital manages approximately $250 million of discretionary assets in the firm's various managed accounts."
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Can you please share the video?
One major Treasury obstacle/hurdle nearly completed. Congress passed debt ceiling, Trump to sign.
Watched a calabria talk at ginnie Mae, given on 23 July. He said he hoped to see the treasury plan released by the end of the month. So with the budget passed, plan could be any day now.
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Fannie CEO talking about attracting private capital (presumably via IPO once FHFA completes its capital framework).
"As we've said before, we believe that a robust and sensible capital regime for the GSEs is necessary both to protect taxpayers in future housing downturns and to sustainably attract private capital to the housing finance system. We look forward to the completion of the capital framework currently under consideration by our regulator."
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From Freddie earnings today- http://www.freddiemac.com/perspectives/david_brickman/20190731_financial_results_2q2019.page
Why does it feel like the new CEO is trying to pitch the "new transformed" Freddie Mac to potential investors? Doesn't he know the government owns all the profits here? Language sounds like he is gearing up for a road show.
Interesting comments:
"The fact that we can consistently report solid results like these, quarter after quarter, is a testament to Freddie Mac’s remarkable transformation not just to a better company with profoundly improved strategies around risk management, but to a fundamentally different company—one that is ready to take on the challenges that will lead us to our next chapter."
"Finally, my third priority is to prepare Freddie Mac for a potential end to conservatorship. Nobody knows exactly what the future holds, but the conversation in Washington and the expected release of the Administration’s Housing Finance Reform Plan demand that we be ready to follow the path set by that plan and the milestones established by the FHFA director. And make no mistake, we will be ready."
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@CGasparino
SCOOP: Housing chief @MarkCalabria remains committed to ending net-worth sweep recapitalizing @FannieMae @FreddieMac possibly ending NWS by year's end as prelude to public offering-sources. Calabria believes GSEs could issue stock while in conservatorship more now @FoxBusiness
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You can convert the current jr pfds to new immediately paying pfds w/ market rate coupon (3-4%) instead of 7-8%. So annual div drops from ~$2b to ~$1b which is easier to digest during a recap period.
Maybe attach some rights to it to participate in IPO.
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Has anyone read anything that makes paying the jps dividends inconsistent with Calabria's views?
During his CNBC interview- he floated the idea of jr pfds getting converted or receiving PAR, didn't mention anything re: div's, but its possible.
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Seems like this isn't such a big deal. If you listen to his Fox Interview, it sounded like government doesn't want to "TOTALLY" privatize the GSEs, as in there will always be some sort of government backing of some kind. Which has always been the assumption here. I don't believe many people thought they would be fully privatized with ZERO government backing. The Trump memo even asked for ways for the government to be compensated for their support whether implicit or explicit. Non-story.
He also mentioned plan still coming but timing unknown.
SCOOP: @USTreasury unlikely to advocate privatization as a viable option in @FannieMae @FreddieMac reform-sources; Treasury complaining lack of personnel w GSE skills slowing reform, timetable uncertain-sources more 345pm @FoxBusiness @LizClaman $FNMA $FMCC
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Interesting development...
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You used past tense. "Once again the price behaviors change and TA warnings all over the place before bad news came out."
That is just a summary. Here is the actual document.
So now fhfa believe it's constitutional.
Trying to push the decision back? Would that even work?
Wow. I was busy working yesterday and just saw this. :o This is mind blowing to me.
Once again the price behaviors change and TA warnings all over the place before bad news came out.
Forecasting is always easier in hindsight
This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight?
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I wouldn't read much into the pullback. FNMAS is $12.95... ~7% off the highs of $13.91 after being up 100% YTD...
That is just a summary. Here is the actual document.
So now fhfa believe it's constitutional.
Trying to push the decision back? Would that even work?
Wow. I was busy working yesterday and just saw this. :o This is mind blowing to me.
Once again the price behaviors change and TA warnings all over the place before bad news came out.
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Lol they rarely even write about stocks/GSEs if ever. Most of their publication revolves around the securitization business, which the GSEs happen to come up from time to time (i think twice in the last 6 months). This isnt your retail pump newsletter.
Just look at this recent article pumping CRT-backed bonds!! /sarcasm
https://www.abalert.com/search.pl?ARTICLE=184680
Besides, the meetings they claimed took place on June 7th that no one else reported on but them turned out to be true based off WSJ's reporting from yesterday. Weird for a pump newsletter to have access to such insider information...
You are wrong to compare ABS to a seeking alpha or forum like here. Its a professional industry subscription service that charges ~$4,500+/yr and has very little retail subscribers like ourselves.
we know from the leaked remarks made by Acting Director Otting to the FHFA staff in mid-January that there was an administrative proposal set be announced “in two to four weeks” that “really sets a direction for what the future of housing will be in the U.S.,” and that would require raising “probably somewhere, based upon their business models today, [in the range of] $150 to $200 billion.” Something happened to derail that plan, and I believe it was a swift and fierce show of opposition by the banks and their supportersimo craig's abrupt resignation has to be interpreted in this context. occams razor explanation is that whatever happened to derail the original plan caused him to resign. what happens now, i dont think anyone has a clue...
Well, whatever the plan is large investors are "ecstatic" about it as of June 7th.
Fannie and Freddie stockholders were ecstatic at Calabria’s statements. “It’s exactly what we laid out,” one investor said. “The goal of this president is what can be done administratively. You can see there’s a focus on getting it done.”
https://www.abalert.com/search.pl?ARTICLE=183913
The chart tells me a different story. Since that time, the behavior has totally changed on the chart. I don't think ABA is a place where they have a collective interesting to make money for its readers. It is more like other forums like here or seeking alpha for spreading information.
If these "insiders" really know something so "ecstatic", the chart behavior would not look like what we've seen since then.
I wish it would be so easy to pay only $4500 a year to enter an elite circle whose members are so nice and considerate that they actually CARE about me making money.
I've never seen a single financial writer who actually cares about whether his readers can make money off his articles.
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You are wrong to compare ABS to a seeking alpha or forum like here. Its a professional industry subscription service that charges ~$4,500+/yr and has very little retail subscribers like ourselves.
we know from the leaked remarks made by Acting Director Otting to the FHFA staff in mid-January that there was an administrative proposal set be announced “in two to four weeks” that “really sets a direction for what the future of housing will be in the U.S.,” and that would require raising “probably somewhere, based upon their business models today, [in the range of] $150 to $200 billion.” Something happened to derail that plan, and I believe it was a swift and fierce show of opposition by the banks and their supportersimo craig's abrupt resignation has to be interpreted in this context. occams razor explanation is that whatever happened to derail the original plan caused him to resign. what happens now, i dont think anyone has a clue...
Well, whatever the plan is large investors are "ecstatic" about it as of June 7th.
Fannie and Freddie stockholders were ecstatic at Calabria’s statements. “It’s exactly what we laid out,” one investor said. “The goal of this president is what can be done administratively. You can see there’s a focus on getting it done.”
https://www.abalert.com/search.pl?ARTICLE=183913
The chart tells me a different story. Since that time, the behavior has totally changed on the chart. I don't think ABA is a place where they have a collective interesting to make money for its readers. It is more like other forums like here or seeking alpha for spreading information.
If these "insiders" really know something so "ecstatic", the chart behavior would not look like what we've seen since then.
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FWIW, my assumption re: plan being released in a few weeks is simply listening to Calabrias comment from ~2 weeks ago ("hopefully by the end of June"), reading the most recent reporting from credible news sources such as WSJ (they said in July yesterday), and speaking to industry insiders who have indicated at recent conferences I attended that they expect it to be released by mid July latest. All these sources could be wrong, but they are all lining up around same time period.
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For what its worth, WSJ confirmed those meetings took place on June 7th in their article yesterday. So maybe the ABS article is more credible than it appears.
We also know Phillips stepped down after the plan was finished and deliverer to the WH, where its now sitting with the White House staff before being handed off the Trump (hopefully in the coming weeks). I think Phillips more likely left b/c his literal job of drafting the reform plan was completed (confirmed after it was handed in to the White House) and he is now reported to be seeking a wall street job related to the IPO of the GSEs (shocker).
I guess we will find out in the next few weeks once the plan is released to the public.
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Here are some additional quotes from the original article on saturday.
“If we were to get legislation, these entities either need an implicit or explicit guarantee, my preference would be that they have an explicit guarantee and that taxpayers are compensated for that guarantee.”
“In any scenario we would want significant capital in front of the government guarantee.”
Bloomberg quoted these 3 statements. The rest was their opinion.i think there is a non trivial chance that the treasury plan calls for congress to enact housing reform as a last step in the process of releasing the gses. mnuchin's statement on its face highlights that risk and as we see today it was a negative surprise, as markets were primed for quick recap and release. what mnuchion actually meant, we'll find out soon enough
there is a nontrivial risk of many things screwing up the GSEs as we have found over past 5 years. as for Mnuchin's "statement," all I saw was Bloomberg reporting on a side press availability while mnuchin was in Japan. there were quotes about reform and private/public capital, but I dont see something that looks like a "statement". let's see what the treasury plan says (which itself will have been written by committee and have things in there we will not like)
“What we’re not going to do is business as usual with no changes, just re-capitalize them and float them,”
“There needs to be housing reform as part of this.”
“Could be IPO, could be private capital, there are lots of ways of doing it, but ultimately it would need a combination of retention and capital raise,”
The above does not contradict Mnuchin's testimony from a few weeks ago posted by allnatural. These, together with that testimony, do not represent a change of Mnuchin's mind, in my view. As Chris said, an explicit government guarantee may be an essential requirement by investors willing to fund an IPO. So he is dealing here, suggesting Congress get that explicit guarantee (reform) going. And if this fails, he still can omplement the commitment fee administratively.
It does not look like he is backtracking. Just threading a needle (as per investorG). Yes, consolidation time.
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This is credible source with a lot of insight into alternative asset classes (including hedge funds). It's ~$4.5k/yr and lot of industry insiders subscribe.
https://www.abalert.com/search.pl?ARTICLE=183913
I know nothing about this website and maybe its b.s., just sharing a link i came across on twitter. This article reports that a shareholder 'spoke' with Calabria last week. The article uses pretty strong, high-confidence language that an IPO will happen.
Obviously this can't be verified so I don't know how to judge how meaningful this is.
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Just highlighting Mnuchin's full comment re: GSE reform during Senate hearing 2 weeks ago.
"I think a lot can be done administratively, we're working on that, we're also working on a report for the President. But I would also encourage there is an opportunity for congress on a bipartisan basis to make some significant reforms. These were not entities that were intended to be under government control forever and funded by taxpayer money forever so I hope that Congress would look at this with us but if not we will do things administratively ... this is a priority of ours"
“Our fundamental view is that there should be risk capital in front the government’s money. And whether that’s a government guarantee on securities or treasury line, fundamentally there should be private risk capital that supports a a liquid 30 year mortgage market.”"
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Yes lets screw over the same jr pfd shareholders that we are going to ask to contribute private capital (blackstone paid for Moelis). Also that may solve the APA cases but no way the shareholders from the Sweeney and Lambert case where we are seeking monetary damages agree to settle. Remedy there isnt to mark down snr pfds as paid down. So back to the hiccup of not being able to raise new capital with the legal overhang outstanding (as recently explained by Freddie Macs CEO).
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What's more interesting is the 9 majority judges all ruling on the same side here.
"ANDREW S. OLDHAM, Circuit Judge, joined by JONES, SMITH, OWEN, SOUTHWICK, WILLETT, HO, DUNCAN, and ENGELHARDT"
All GOP. Let's hope they follow same party lines in Collins. Positive to see Willet and Jones in that camp.
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I can see them expediting it from 18-24 months to 12 months at the expense of legacy common. But again once the recap release is in motion, there is no "firing" the squad and stopping everything in its tracks. The risk outweighs any rewards. You would have to have a better alternative to replace that plan in place before you do such an action, and it would have to pass Congress, all before the recap and release is completed, which is very unlikely for reasons mentioned above. Also FHFA is an independent agency and its within its mandate to execute on this plan / build capital. So far every court has told us you can not challenge their actions, so i'm not sure how you would even halt this once its signed off on. Especially once the senior pfds are amended in Q3-Q4 according to Calabrias timeline (to stop the NWS and probably write down the senior pfds in connection with settlement). No one will be able to reverse that amendment.
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Why wouldn't new investors be ok waiting? The more capital raised/shares issued, the more dilution to all participants. AIG also took a couple years to fully exit government control. And for the reasons mentioned by cherzeca and I, I don't believe Congress is a real risk here once the plan is in motion (but investors will still get paid for that perceived risk by getting access to the investment at dirt cheap valuation). The AIG blueprint is there, lets not over complicate this.
Calabria already discussed this as the most likely scenario, IPO, retain capital for 1-2 years, then exit.
FNMA and FMCC preferreds. In search of the elusive 10 bagger.
in General Discussion
Posted
Admin plan being delayed from June to September + Bloomberg / Reuters pieces that the admin is getting cold feet ahead of elections + the market being in risk off mode this summer + general investor fatigue in this trade (fool me once.. twice..), would explain this latest move down for me. Everyone just waiting for the plan (if that ever comes out) and Collins at this point. This has become very binary in the short-term based off those 2 events.