TwoCitiesCapital

If there is no transcript, does anyone mind summarizing what was said about the Equity Total Return swaps previously mentioned in the thread. It sounded like Fairfax went long total return swaps in March? If that is so, these are likely a source of additional liquidity since these things tend to be standardized and settled on a quarterly basis in cash payments. Depending on the size of the TRS purchase, Fairfax could have tens of millions of cash coming to it in June simply based on what the indices have done since March. Transcript is here: https://finance.yahoo.com/news/edited-transcript-ffh-earnings-conference-024448274.html SJ Thanks. Wasn't aware YAHOO also provided the service and Google didn't pull it up in a search. Have always relied on SeekingAlpha! Doesn't seem like a whole lot of information is given on the swaps, notional amounts, or underlying indices. The quarterly report does say the notional for the swaps is $952 million though. When I worked for a hedge fund, these were typically standardized on total return indices and would settle on the 3rd Thursday of the month ending the quarter or something like that. Things might've changed since then given the move to Central Clearing and whatnot, but I'm just trying to ballpark figures of incoming liquidity to Fairfax as a result of these derivative positions. Using the S&P 500 total return index and a last settlement date of 3/19 - Fairfax would be in the money by 18.7% on the current run and would be owed a cash payout of $178 million if values don't change between now and June. $178 million of incoming cash in a quarter is nothing to sneeze at for those who are concerned about liquidity issues.

I think it depends on the thread. I've basically stopped visiting Tesla and Coronovirus threads. The content is shit and they have just devolved into dick-measuring contests between posters who are getting personal in attacking one another. Other threads seem about the same quality. No doubt that this forum has lost some HUGE contributors over time. Eric doesn't seem to post as much, though he's around from time to time. On the flipside, we've picked up new folks like Cherzeca who's had invaluable contributions to the Fannie/Freddie thread. All in all, it seems roughly the same - maybe a slight decrease in quality in generally, but I just ignore those threads where reasoned discourse is unwelcome.

If there is no transcript, does anyone mind summarizing what was said about the Equity Total Return swaps previously mentioned in the thread. It sounded like Fairfax went long total return swaps in March? If that is so, these are likely a source of additional liquidity since these things tend to be standardized and settled on a quarterly basis in cash payments. Depending on the size of the TRS purchase, Fairfax could have tens of millions of cash coming to it in June simply based on what the indices have done since March.

Just after the last potential seller throws in the towel! Low interest rates (all else equal) mean less income from float. So yes, bad. Covid 19 has two impacts: 1) big recession means less demand for insurance. 2) potentially higher claims although Fairfax don't think they are badly affected. But who knows why the stock is getting (even) cheaper today. Might be Powell's comments, might be because Eurobank is down 10%, or it might just be because there are more sellers than buyers today. Bryggen, I am sorry you are experiencing this pain however a few of us on here (myself included) attempted to warn shareholders and those considering becoming shareholders to stay away from owning the shares of this company. Before I write anything further please understand that there are a few on here that will continue to strongly advocate for investing in Fairfax. They will cite the "undervalued" nature of their major equity holdings, the fixed income yield pick up during the bottom in mid-March, the long term track record of Prem and team, the hardening market, the vastly improved underwriting results and of course the fair and friendly culture. In my view, none of these reasons is sufficient to overcome the many deficiencies that have existed at Fairfax for several years and which are now being exposed for what they are. For every positive point put forward by those who still believe and advocate for investing in Fairfax's shares are equal and in my view more compelling reasons for not doing so. The company is now swimming in debt, it never had a strong capital structure however it is now simply awful. Its long term holdings in Eurobank, Resolute Forest, Stelco to name just a few are likely impaired beyond repair. I fear a similar fate for Recipe and the myriad of its private holdings in the retail space. These were low margin businesses at the best of times and that was before any additional costs that Covid will impose on all retail establishments. Fairfax Africa and India have been so very disappointing for shareholders in those companies as well as for shareholders of Fairfax who have watched their seed capital into these entities melt away. Furthermore, the low interest rates will hamper all insurance companies going forward. God help any existing shareholders if we have an active hurricane season this year. You now have a decision to make. Continue to hold and believe in the long term value of Fairfax (that was hard for me to write) or sell your shares now and redeploy the proceeds into other more compelling opportunities. The choice is yours. I have made mine! Thanks for your honest input. Not reassuring, but I would rather honesty. I am now curious to hear from the others on it ;) Bry He hit the nail on the head for the bull argument. That was the bull argument?? :o He clearly listed what the bulls would say in response - which is basically what I said. On an unrelated note, anyone have the transcript from Q1 earnings call? Seeking Alpha doesn't seem to have it and I'm uncertain that it will be posted at this point.

Just after the last potential seller throws in the towel! Low interest rates (all else equal) mean less income from float. So yes, bad. Covid 19 has two impacts: 1) big recession means less demand for insurance. 2) potentially higher claims although Fairfax don't think they are badly affected. But who knows why the stock is getting (even) cheaper today. Might be Powell's comments, might be because Eurobank is down 10%, or it might just be because there are more sellers than buyers today. Bryggen, I am sorry you are experiencing this pain however a few of us on here (myself included) attempted to warn shareholders and those considering becoming shareholders to stay away from owning the shares of this company. Before I write anything further please understand that there are a few on here that will continue to strongly advocate for investing in Fairfax. They will cite the "undervalued" nature of their major equity holdings, the fixed income yield pick up during the bottom in mid-March, the long term track record of Prem and team, the hardening market, the vastly improved underwriting results and of course the fair and friendly culture. In my view, none of these reasons is sufficient to overcome the many deficiencies that have existed at Fairfax for several years and which are now being exposed for what they are. For every positive point put forward by those who still believe and advocate for investing in Fairfax's shares are equal and in my view more compelling reasons for not doing so. The company is now swimming in debt, it never had a strong capital structure however it is now simply awful. Its long term holdings in Eurobank, Resolute Forest, Stelco to name just a few are likely impaired beyond repair. I fear a similar fate for Recipe and the myriad of its private holdings in the retail space. These were low margin businesses at the best of times and that was before any additional costs that Covid will impose on all retail establishments. Fairfax Africa and India have been so very disappointing for shareholders in those companies as well as for shareholders of Fairfax who have watched their seed capital into these entities melt away. Furthermore, the low interest rates will hamper all insurance companies going forward. God help any existing shareholders if we have an active hurricane season this year. You now have a decision to make. Continue to hold and believe in the long term value of Fairfax (that was hard for me to write) or sell your shares now and redeploy the proceeds into other more compelling opportunities. The choice is yours. I have made mine! Thanks for your honest input. Not reassuring, but I would rather honesty. I am now curious to hear from the others on it ;) Bry He hit the nail on the head for the bull argument. I've been saying for awhile that it was hard for me to see how Fairfax could generate a reasonable return with interest rates and equity markets where they were at. I sold most of my position in mid-2018 for prices around $550-575/share. The argument was interest rates were too low and equity markets to high for them to make a reasonable return for me as a shareholder. I'd argue that this is the first time Fairfax has been attractive since - primarily because what is currently lacking in rates can be more than made up in spread products like corporate bonds, municipals, and equity products and build a conservative portfolio yielding 3-4% fairly easily. 4% on their investment portfolio alone is enough to make shares attractive @ $250/share. You get the positive returns from underwriting and any appreciation in subsidiaries/equity accounted investments for free. I've started repurchasing the shares I sold in 2018 here.

Yeah a day after the St Louis Fed came out stating that they don’t want low interest rates. You can’t make it up. He may need the negative interest rates to keep his cardboard box empire from collapsing. It's quite possible negative rates may actually be what causes his cardboard box to collapse. Honestly. Can you imagine what would happen if the RESERVE CURRENCY OF THE WORLD had negative rates?!?!?! I think that'd be quite a bit different than the euro having negative rates, but you could still expect the destruction of the U.S. banking sector and their profits a la Europe. Might be a time to jump into gold if you seriously expect that to happen as I imagine Central Banks all over the world would be moving some dollars into gold at that point in time.

Higher corporate taxes in response to corporate bailouts for the second time in 12-years.

haven't high quality companies in Europe and Japan traded at nice multiples throughout the low rates and low growth? I can't find data over time, but I'd point out that "quality" companies in these parts do trade at a healthy 19x earnings. They don't trade at 40x instead of 20x because rates are zero instead of 1 or 2%, but it's not like they trade at 10x or 13x either. I mostly agree about your point about banks. I think low rates/growth are an argument for multiples of high quality super long duration assets holding up, not necessarily banks trading at high earnings multiples. japanification/europification will not be kind to banks (though I think American banks are in much better shape) MSCI Japan Quality is at 19x versus MSCI Japan at 13x https://www.msci.com/documents/10199/83875536-eccc-410e-ac69-0e56010de620 MSCI Europe Quality is at 19x versus MSCI Europe at 13x https://www.msci.com/documents/10199/3bc1a893-9602-45da-ba28-24220cec261f MSCI EM Quality is at 18x versus MSCI EM at 13x https://www.msci.com/documents/10199/a032d7c7-e72a-4f02-b95a-6aaa77fcd152 Only in recent years have European equities hit that level - primarily after the 2017 "everything" rally based on my holdings in them. And it's not even widespread - sure you get 20x in Germany, but not all across Europe as a whole. Japanese equities have traded at elevated profit multiples for a period of time, but the EBITDA/EV relative to US corporations is WAY lower given the large cash balances and limited leverage - so still much safer - and also basically an occurrence of the doubling of the index over the last 5-7 years or so. So no, I still do not accept that low rates = high multiples. 1-2% inflation = high multiples. You get above or below that figure, multiples come down pretty quickly. We've been in that band for a few years, despite policy makers' best efforts for 2+% inflation. What is the likelihood policy makers thread that needle to get it just right in response to this crisis? We're going to fall out of that range which means the entire market likely rer-ates. If it's to the low side, God help the banks. Some European banks are down 80-90-ish % from their pre-08 highs despite surviving, adapting business models, and consolidating what was left of the industry. And while I think "quality" companies are better prepared for this, their priced for it. Christ - Google is at 30x it's earnings despite all of its customers suffering and slashing ad budgets. If Google was 15-20x reduced earnings, I'd buy hand over fist. I'm not touching 30x falling earnings. This will be 2006/2008 all over for Google holders IMO with the exception Google won't be hitting record revenues and earnings through the period as it's stock drops

Ironically, infrastructure spending is probably one of the things that would actually be accretive to US GDP and productivity right now. Lots of US infrastructure is in Third World condition, and I say this as an American citizen. I will never forget landing at LaGuardia Airport in New York a few years ago - it was shortly after a rainstorm and I had to pass by plastic buckets placed around the concourse set up to catch the water leaking from the ceiling. It's not just the airports - apparently nearly 4 bridges out of every 10 are "structurally deficient" according to this report: https://artbabridgereport.org/reports/2020%20ARTBA%20Bridge%20Report.pdf Despite its arguable utility and bipartisan popularity with the public, I'm doubtful that there will be a dime allocated to infrastructure spending. The takeaway is simple: In the modern US, spending that benefits the public is "too costly." But if you are a lucky member of the looter class, we can offer you infinite money courtesy of the Treasury and the Federal Reserve. If you happen to be a member of the looter class that owns BlackRock, so much the better, because the taxpayers will be paying your ETF fees. +1 I've long said infrastructure spending is the only deficit spending I'd be in support of. Now that the pandemic has hit, I'd have to revise that to include increases in unemployment, but would still be for a massive shift to payments to states/cities to manage a infrastructure improvement over the next 10 years. It's crazy to me were willing to send $1,200 to any any American earning less than 99k, regardless of need, but are not willing to pay people to do jobs that are necessary and an investment in the future productivity of this country. I was for increased unemployment benefits. I've been largely neutral towards PPP loans. I've been absolutely against direct payments as they weren't anywhere near targeted enough and don't provide any long term benefits. Why is infrastructure spending so hard compared to war time spending and increases in entitlements? Why is it that something that should be bi-partisan gets no support?

I dunno - I think everyone is saying that rates will go lower because they've been tired of being wrong for the last 12-years. It was just as recently as 2018 when no one wanted to own bonds and were sure that rates were headed higher. Basically, since 2008 people have been saying rates can't get any lower. And despite certain bounces off local-lows like the taper tantrum and post-Brexit moves, the general trend for the last 10-years has been lower with new lows in rates set every few years...because the economic environment demands lower rates. I don't see that changing just because people are finally throwing in the towel after 12-years of being underweight duration and wrong. They're only beginning to see the light and that may change 6-months from now when people may, once again, be clamoring for higher rates saying the bottoms are in and there is no way rates can go lower. Rates will fluctuate in the short-term, but my guess is the 10-year doesn't go anywhere near 2% for the next few years. As a point of reference, the recent high was ~3.25% in 2018 at the middle of the rate hiking cycle. Will we have zero interest rates in 10 years? Maybe. But what does that mean for income for banks and their valuation? NIM will suffer of course, but I suspect non-interest income will play more of a role in banking profits. Secondly even if interest income and net income suffers, valuations should hold up or expand right? At zero interest rates, normalized valuations could be 20+. Willing to bet on WFC is at like 10x 2010 earnings. I'm tired of addressing the low rates = high multiples argument so I won't really go into the details. But if rates are at 0% because inflation/growth is 0, or negative, than no - you won't have 20x multiples on equities. Just like we didn't have 20x multiples on equities in the Great Depression when rates were near 0. Just like Europe hasn't had 20x multiples on its equity indices for the bulk of the recovery despite low/negative interest rates. And to expect that on equity markets as a whole is one thing. To expect it on bank stocks whose primary form of revenue/income has been decimated and needs to be replaced with a fundamentally new business model seems foolish.

I dunno if you'd consider them distressed, though they have been involved with turnarounds (like Fiat's buyout of Chrysler). Exor is still expecting to close on the sale of their insurance unit which will give them $9 billion in cash which is a massive chunk of their current market cap.

Are these Jan 21, 2022 expiry? Yes, I'll edit Mephistopheles - Do you mind sharing your thoughts on the size of this position and how you allocate? Sure. I have a mix of common and options. Bulk of it is common with some options at strikes 25, 27.5, 30. Options like <1% of portfolio. I bought today because WFC is near the lows from March, and cost of leverage was only about 10% + dividends. Meanwhile the stock is at like 75% of TBV. Depends on how this crisis plays out, I thing the banks are very well capitalized. Govt will never let them fail. Zero or negative rates for long would hurt. Everyone says we will have same rates or lower for long. People act like we will never see high rates again but I don't think we can ever be so sure. I dunno - I think everyone is saying that rates will go lower because they've been tired of being wrong for the last 12-years. It was just as recently as 2018 when no one wanted to own bonds and were sure that rates were headed higher. Basically, since 2008 people have been saying rates can't get any lower. And despite certain bounces off local-lows like the taper tantrum and post-Brexit moves, the general trend for the last 10-years has been lower with new lows in rates set every few years...because the economic environment demands lower rates. I don't see that changing just because people are finally throwing in the towel after 12-years of being underweight duration and wrong. They're only beginning to see the light and that may change 6-months from now when people may, once again, be clamoring for higher rates saying the bottoms are in and there is no way rates can go lower. Rates will fluctuate in the short-term, but my guess is the 10-year doesn't go anywhere near 2% for the next few years. As a point of reference, the recent high was ~3.25% in 2018 at the middle of the rate hiking cycle.

You are absolutely correct. With the twin deficits, high inflation and import oriented economy, there is a constant pressure on the INR. Historically INR has depreciated 5% annually, and then when you add up all the taxes and high cost of investment in India, you land up making 6-7% $ return if you can get 15% lNR return which is a tall ask. Currently the top 15 companies in India has 40% market cap of all listed companies and pretty much all companies that have out performed in India has done that on the back of multiple expansion. Just look at the multiples of even simple consumer companies such like Nestle, Hind Unilever, Asian paints etc which would have been fine if they were growing at decent clip but none of these companies are growing at even 10%. So all the new money from local mutual funds are chasing these handful of 10-20 companies which has led to extreme polarisation. If you have put money outside these companies your portfolio has lost money. The funny bit is local regulation discourage investment outside the top 100 companies. The other problem is that there is no bond market which makes it extremely difficult for corporates to raise debt money. Weird. Sounds like the S&P 500 in 2020.

Interesting observing the age differences there. The young feel invincible, the old not so much? Either that, or Ackman has already made his year by hedging the original downdraft and riding the ride up. He probably isn't as worried about additional downside in markets because he's already locked in massive outperformance for the year, earned his fees, and will probably have dramatic alpha for 2020 regardless of if markets are up or down over the next 8 months .

How are you getting 15% with portfolio investments returning 2.5%? I understand you are using $255 stock price as your capital base, but are you taking into account interest expenses, corporate expenses, preferred dividends? Even 3.5% pre-tax return does not get me to 15%. Vinod Not portfolio investments. Fairfax has $1500-1600/share in float/equity/debt. A net 2.5% return in those figures is $37.50/share at the low end. On a $260/share price, that's 14.4% annualized. I'm not talking about portfolio returns, just that they need to net only 2.5% on the total of float/equity/debt after expenses. It doesn't seem like that should be a high bar, particularly if insurance (what the equity/debt supports) is performing well. If people don't seem convinced of 2.5% net on those various forms of funding, then who the hell was buying this at $500-$600/share when the various forms so funding were the same, but the bar for acceptable performance far higher?

Well, not sure 60% of either necessarily matters. I made the point in the other thread that, at these prices, Fairfax need only generate 2.5% annualized on their float, debt, and equity to achieve 15% compounded returns from here. No worrying about the accuracy of BV or IV or any of that necessary. No wondering if permanent impossible or a return to prior values. All of that is basically in the past. Do you think they can do 2.5% per year? If so, you get 15+% return on your capital.

With $835/share in float, $420/share in equity, and $337/share in debt - it's hard for me to come up with a case where returns aren't going exceptional @ $260/share. That is $1500+/share earning you a return. 15% compounded from these depths only requires an annualized return of 2.5% on the float/debt/equity to get 15% ROIC for your dollars. Such a low bar! Particularly in an environment that is being disrupted where investment grade corporate debt and high-grade equities/preferred yield quite a bit more than that.

Deposit 1,000 every month in their account for everyone who has a job and makes under 100k per year and watch that shit fly! Hell that's only about 2.3T of new money PER YEAR. At 2.3T you're a pussy these days and that may only get you inflation. You want high inflation better dial that baby up to 2k per month and index it to inflation. That's still just a paltry 5T or so. See? Easy If this is funded by the Treasury, I'd argue it's still deflationary long-term. Debt is inflationary upon issuance and deflationary upon service/repayment. The only way this type of system successfully raises sustainable inflation would be a system that requires CONSTANT growth in the debt and CONSTANT acceleration in that growth. Otherwise as the debt stock grows, the inflationary impulse of the incremental debt add isn't enough to exceed the deflationary impulse of servicing the debt stock. This system is ruined by a Fed EVER raising rates or by a gov't ever balancing its budget. Note that this environment is roughly approximate by the U.S. from 2008 - 2017. Massive deficits, on/off acceleration in that deficit growth rate, and a Fed keeping rates low for years on end. And even that was not enough to spur inflation - and as soon as the Fed hit a period of consistently rising rates (2017), the inflation trend dropped off a cliff in 2018 and kept dropping even after the Fed admitted the policy error and cut rates. I just don't think it's politically or economically feasible for the Treasury to commit to massive deficit spending, massive acceleration in that deficit spending growth, and the Fed committing to keep rates at 0% while it happens. At some point, the deflationary impulse just becomes a black whole and you can't escape it. Hey buddy, where did I ever talk about Fed raising rates or gov'ts balancing budgets. You can't do that while constantly depositing money into consumers' accounts. In fact I specifically mentioned an indexing of that amount to inflation. That's how you get yourself some nice inflation. A good 'ol wage-price spiral. The fact was that we never did inflationary shit. What the fed did was mostly asset side balance sheet stuff. During 2008-2014/5 the fed gov't did run some deficits but that was to replace some consumer demand deficit during deleveraging. Smart, generally inadequate, and nothing too revolutionary. Boring textbook stuff. Once the Tremendous Trump comes in and we really run some deficits again that's on the asset side. Give money to rich folks that buy stocks/bonds, blah. Give lots of money to corporations that buy back stock. All asset side yawn. Oh and while all this shit is going down the Fed is busy sanitizing all this supply via bank reserve requirements. Mopping all the slosh they generated all over the place. The fact is that the Fed has been very careful not to generate inflation. Which is very pertinent to this thread because rentiers hate inflation. So you want real inflation? You need to engage the P&L baby. You need to have more money out there chasing so many goods that the economy cannot produce. You give money not to some stiff suit but some Duck Dynasty Arkansas hillbilly motherfuckers that don't know what a Robinhood is. Inflation index that shit and then watch the sparks fly. Wasn't saying you did, but also don't think it's politically or economically feasible to do $2000/month without raising taxes or rising rates - both if which would reduce the inflationary impulse. That was kind of the point. Not just enough to spend. Have to constantly spend , constantly increase spending, and prevent rising rates from slowing down the economy at the same time.

Not sure I agree with this. When I worked @ PIMCO, the hope was for higher rates. Higher rates make fixed income more attractive and more sustainable in the long-term and is ultimately the key to long-term AUM growth.

Deposit 1,000 every month in their account for everyone who has a job and makes under 100k per year and watch that shit fly! Hell that's only about 2.3T of new money PER YEAR. At 2.3T you're a pussy these days and that may only get you inflation. You want high inflation better dial that baby up to 2k per month and index it to inflation. That's still just a paltry 5T or so. See? Easy If this is funded by the Treasury, I'd argue it's still deflationary long-term. Debt is inflationary upon issuance and deflationary upon service/repayment. The only way this type of system successfully raises sustainable inflation would be a system that requires CONSTANT growth in the debt and CONSTANT acceleration in that growth. Otherwise as the debt stock grows, the inflationary impulse of the incremental debt add isn't enough to exceed the deflationary impulse of servicing the debt stock. This system is ruined by a Fed EVER raising rates or by a gov't ever balancing its budget. Note that this environment is roughly approximate by the U.S. from 2008 - 2017. Massive deficits, on/off acceleration in that deficit growth rate, and a Fed keeping rates low for years on end. And even that was not enough to spur inflation - and as soon as the Fed hit a period of consistently rising rates (2017), the inflation trend dropped off a cliff in 2018 and kept dropping even after the Fed admitted the policy error and cut rates. I just don't think it's politically or economically feasible for the Treasury to commit to massive deficit spending, massive acceleration in that deficit spending growth, and the Fed committing to keep rates at 0% while it happens. At some point, the deflationary impulse just becomes a black whole and you can't escape it.

Agreed. Airbnb hosts too a risk. Live with the outcome of that risk. Airbnb can bail out the hosts if it wants to. American taxpayers should have no part it in it outside of the forebearance arrangements already in place for ALL homeowners/renters. Disclosure - I used to be an Airbnb host in NYC from 2011 to 2017. I had thought plenty of times of getting multiple more units, but consciously made the decision to avoid the risk of not being able to cover the monthly payments with my salary. The rewards were not lucrative enough for the additional risks. These others should not be rewarded for failing to adequately prepare for the risks they were taking - particularly since they were milking massive profits along the way and obviously didn't reinvest into safety nets.

Good interview. I agree with a lot of what he said, but not everything. The biggest disagreement I have is that I think the Fed will do absolutely anything to avoid a deflation trap. In fact with the latest round of interventions they are hinting how determined they are. Those interventions are not just another round of QE (which isn’t necessarily inflation-inducing for reasons correctly discussed in the interview), they are a step toward some real money printing. This really complicates the picture because although we are certain to have a demand-side driven recession, which is likely deflationary (as discussed in the interview), we are also going to have the Fed trying to fight off the deflationary forces with every gun they have. The supply side disruptions (which are inflationary) are also another relevant factor to keep in mind. Anyway my expectation is that the Fed will in the end get what it wants on the inflation front, namely mild inflation. I would not make a gutsy macro bet on deflation for this reason. It was my understanding was his point is they're not allowed to create inflation. His point seemed like it was along the lines of liquidity =\= sustainable inflation AND Treasury spending isn't inflationary in the long term because it's funded by unproductive debt. Debt is inflationary on issuance, but deflationary upon service/repayment. Seemed to me his whole point was that the only way the Fed can engineer lasting inflation in this environment is to directly monetize the debt. Print money and pay off the Treasury's obligations which removes the unproductive debt. I think this is probably the RIGHT way to look at long-term and sustainable inflation. But obviously in the short-term the liquidity has to go somewhere and can create temporary inflation depending on where it sloshes to.

Seems like there is a lot of mixed info out there. I've basically only heard forbearance for the 3-month term afterwhich an extension of mortgage modification could be requested. As for as when the forbearance is due, I've read a ton of articles that say either at the end of the 3-month period and a ton of articles that say they tack an additional 3-months onto your mortgage. I've also read a ton of articles where consumers are being told both of those things by their banks depending on who they're talking to. It really doesn't seem like ANYONE knows when the money will be due to be repaid at this point, but I imagine there will be some clarity once they've had some time. For an example, see this article from the WSJ https://www.wsj.com/articles/getting-a-mortgage-payment-break-isnt-the-boon-many-expected-11587634200 https://nationalmortgageprofessional.com/news/74667/lump-repayment-required-loans-forbearance Seems there are multiple options for repayment available to confirming mortgages and lump sum payment is not being required.

Just seems strange. Why plow $2.9 billion into corporate debt yielding 4.25% to just then go float a note for $600 million paying 4.65%? I mean, I get that the money is in different places with the subsidiaries owning the corporates and the holding company issuing the debt, but this seems like bad economics to me unless if the revolver is more onerous and this is repaying that?

I don't think investors will find themselves in the same squeeze again - so minus $40 off the table. I do think that supply/storage issue hasn't been fixed, so watching the futures contract trend towards 0 near each expiration may be expected since it forces people to close the position or to take delivery and no one wants the latter.