orthopa Posted March 9, 2017 Share Posted March 9, 2017 Is there even a chance for them to place it in receivership? The companies are making so much money. The job market is at its highest. The companies will be making even more money as interest rates go up. What would be the basis for them to even consider it? Political ill-will. Politics has nothing to do with good outcomes, logic, or solutions. It has everything to do with getting your way and/or making sure your opponent suffers. Self interest. The NWS is immensely profitable for the government right now, why give it up? Mnuchin works for the government now and Trump, who will need every penny he can get hold of for his projects? Why give away the goose who lays golden eggs now every 6 month? I would expect the governement trying to dump FNM/FRE when the housing market goes bad and these entities become liabilities for them. Who do you think would be the best suitors for Fannie and Freddie when the housing market goes bad and wants to dump them? So the gov will keep the money now and then try to find buyers for trillions of dollars of securities when the market turns down? Sounds like a great housing finance plan. I can tell you put a lot of thought into this. Link to comment Share on other sites More sharing options...
no_free_lunch Posted March 9, 2017 Share Posted March 9, 2017 I think privatization fits with the general trend of reducing government footprint. I am just not sure how well existing shareholders/prefs will do in the process. I think capital requirements will have to be quite high which squeezes existing equity. Link to comment Share on other sites More sharing options...
Luke 532 Posted March 9, 2017 Share Posted March 9, 2017 Camden Fine, CEO of ICBA, on CNBC a moment ago... He was asked if he has any follow-up meetings with the Administration. (paraphrased) "We are going to meet with Secretary Mnuchin..." Link to comment Share on other sites More sharing options...
Flynnstone5 Posted March 9, 2017 Share Posted March 9, 2017 Sold half of my remaining prfd position. I think there's an opportunity to buy back cheaper although there is possibility of announcement that sweep is being stopped. Seems like small probability of that this month IMO. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted March 9, 2017 Share Posted March 9, 2017 Is there even a chance for them to place it in receivership? The companies are making so much money. The job market is at its highest. The companies will be making even more money as interest rates go up. What would be the basis for them to even consider it? Political ill-will. Politics has nothing to do with good outcomes, logic, or solutions. It has everything to do with getting your way and/or making sure your opponent suffers. Self interest. The NWS is immensely profitable for the government right now, why give it up? Mnuchin works for the government now and Trump, who will need every penny he can get hold of for his projects? Why give away the goose who lays golden eggs now every 6 month? I would expect the governement trying to dump FNM/FRE when the housing market goes bad and these entities become liabilities for them. If this was the real line of reasoning, then tax reform would be off the table entirely. Link to comment Share on other sites More sharing options...
Mephistopheles Posted March 9, 2017 Share Posted March 9, 2017 Is there even a chance for them to place it in receivership? The companies are making so much money. The job market is at its highest. The companies will be making even more money as interest rates go up. What would be the basis for them to even consider it? Political ill-will. Politics has nothing to do with good outcomes, logic, or solutions. It has everything to do with getting your way and/or making sure your opponent suffers. Self interest. The NWS is immensely profitable for the government right now, why give it up? Mnuchin works for the government now and Trump, who will need every penny he can get hold of for his projects? Why give away the goose who lays golden eggs now every 6 month? I would expect the governement trying to dump FNM/FRE when the housing market goes bad and these entities become liabilities for them. Monetizing the warrants and maximizing the value of the common equity is in their self interest. Who cares about golden eggs into perpetuity? Only the next 4 and maybe 8 years is what matters. Link to comment Share on other sites More sharing options...
waynepolsonAtoZ Posted March 9, 2017 Share Posted March 9, 2017 "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 Link to comment Share on other sites More sharing options...
no_free_lunch Posted March 9, 2017 Share Posted March 9, 2017 This isn't the political thread Wayne although of course it kind of is. :) Seriously though I don't get your angle. How do you see this as applied to FNMA? Link to comment Share on other sites More sharing options...
waynepolsonAtoZ Posted March 9, 2017 Share Posted March 9, 2017 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. Link to comment Share on other sites More sharing options...
undervalued Posted March 9, 2017 Share Posted March 9, 2017 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. How much did you reduce? 50%? http://www.housingwire.com/blogs/1-rewired/post/39521-where-does-housing-finance-reform-stand-now#.WMFi_lbvV8Q.twitter The panelists, pictured above, are all veterans of proposed GSE reform and included: Edward DeMarco, senior fellow in residence with the Milken Institute, Michael Bright, director at the Milken Institute Center for Financial Markets, Mark Zandi, chief economist at Moody’s Analytics, Jim Parrott, senior fellow at the Urban Institute and owner of Falling Creek Advisors, and Jim Millstein, founder and CEO of Millstein & Co. Of the 5 panelists above, which reform is closestly aligned with current shareholders / pref holders? I know DeMarco and Parrot are working for the big banks so not good for current shareholders. How about the other 3 reforms? Link to comment Share on other sites More sharing options...
waynepolsonAtoZ Posted March 9, 2017 Share Posted March 9, 2017 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 Link to comment Share on other sites More sharing options...
rros Posted March 10, 2017 Share Posted March 10, 2017 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 In a recent interview, Millstein was asked about the GSEs and conservatorship and he said the only thing that can work is the line of least resistance, which for him was a) recapitalize the entities, b) re-regulate them, c) end the conservatorship. Link to comment Share on other sites More sharing options...
Desert_Rat Posted March 10, 2017 Share Posted March 10, 2017 Coincidentally enough, that's exactly what will happen with them. Link to comment Share on other sites More sharing options...
orthopa Posted March 10, 2017 Share Posted March 10, 2017 FWIW people lightening up is what keeps the most bullish of us grounded and is a good thing. When everyone thinks an investment is a home run it usually isnt and vice versa. Link to comment Share on other sites More sharing options...
rros Posted March 10, 2017 Share Posted March 10, 2017 FWIW people lightening up is what keeps the most bullish of us grounded and is a good thing. When everyone thinks an investment is a home run it usually isnt and vice versa. Good remark, orthopa. Everytime there was a "las vegas" euphoria we know how it ended. Link to comment Share on other sites More sharing options...
orthopa Posted March 10, 2017 Share Posted March 10, 2017 "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 FWIW has trump ever made a promise specifcally on FnF? I dont remember one. Link to comment Share on other sites More sharing options...
muscleman Posted March 10, 2017 Share Posted March 10, 2017 http://www.politico.com/story/2017/03/jeff-sessions-justice-department-probe-eric-holder-loretta-lynch-235862 I guess Sessions is too busy with all of the other Obama "legacies" to care about the FnF case at this moment. Link to comment Share on other sites More sharing options...
Desert_Rat Posted March 10, 2017 Share Posted March 10, 2017 FWIW people lightening up is what keeps the most bullish of us grounded and is a good thing. When everyone thinks an investment is a home run it usually isnt and vice versa. Good remark, orthopa. Everytime there was a "las vegas" euphoria we know how it ended. Euphoria's got nothing to do with it. Just need faith that our govt is not going to steal private assets because it's convenient for them. Ultimately, they will do the right thing. Link to comment Share on other sites More sharing options...
Desert_Rat Posted March 10, 2017 Share Posted March 10, 2017 http://www.politico.com/story/2017/03/jeff-sessions-justice-department-probe-eric-holder-loretta-lynch-235862 I guess Sessions is too busy with all of the other Obama "legacies" to care about the FnF case at this moment. Yeah, that too. I'm most interested in how many votes this Trumpcare bill gets though. It has a better shot then housing reform, imo. Link to comment Share on other sites More sharing options...
nodnub Posted March 10, 2017 Share Posted March 10, 2017 "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 FWIW has trump ever made a promise specifcally on FnF? I dont remember one. That is a good use of FWIW. and evidence to date indicates that a Trump promise is actually not worth anything at all. :D Link to comment Share on other sites More sharing options...
orthopa Posted March 10, 2017 Share Posted March 10, 2017 "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 FWIW has trump ever made a promise specifcally on FnF? I dont remember one. That is a good use of FWIW. and evidence to date indicates that a Trump promise is actually not worth anything at all. :D Whats a mnuchin promise worth? Link to comment Share on other sites More sharing options...
waynepolsonAtoZ Posted March 10, 2017 Share Posted March 10, 2017 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. Link to comment Share on other sites More sharing options...
waynepolsonAtoZ Posted March 10, 2017 Share Posted March 10, 2017 "But does stopping Net Worth Sweep get's our $25 for FNMAS?" I would say yes, it does. Link to comment Share on other sites More sharing options...
undervalued Posted March 10, 2017 Share Posted March 10, 2017 We will most likely know the answers to those questions by April 17. That’s the deadline the government has just been given to produce thousands of documents it has been withholding from plaintiffs in one of the shareholder cases. Mark your calendar's and get your popcorn ready. It's going to be a comedy or a sad movie. Link to comment Share on other sites More sharing options...
Mephistopheles Posted March 10, 2017 Share Posted March 10, 2017 I know we're all value investors here but I can't help but recognize this obvious trading opportunity. Given the declines in recent weeks, the market is at most neutral on the shares. If the dividend goes through on March 31, I don't see much more or any further decline. However if the sweep is paused, imo that's an easy like 40% gain. Regardless of how shareholders ultimately prevail, Mr. Mnuchin has made it very clear that he wants the companies recapitalized. The market would send the shares shooting up if the NWS is paused, and I think there's a significant possibility of this given his comments. Assuming a 10% chance of no dividends to Treasury, makes a very interesting trade. Link to comment Share on other sites More sharing options...
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