FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[blainehodder]

https://twitter.com/JaredALevine/status/851912080420732929

 

They are getting 11k...after another delay?

[undervalued]

http://www.fsroundtable.org/ed-demarco-to-lead-fsrs-housing-policy-council/ Why is this positive for shareholders? He was acting director until 2014 and nothing happened. He also wanted to kill FNMA. I am guessing it's not this news that bump FNMA today.

[Desert_Rat]

Never heard of them, which is good because they would only irritate me:  https://docs.google.com/viewerng/viewer?url=http://fsroundtable.org/wp-content/uploads/2014/05/Housing-Policy-Council-letter-on-S.-1217-Housing-Finance-Reform-Act-May-15-20141.pdf

 

DeMarco may be a step up.

[Desert_Rat]

I'm beginning to get angry.

 

http://www.foxbusiness.com/politics/2017/04/11/white-house-walks-back-timing-size-tax-cuts-puts-stock-rally-in-jeopardy.html

 

Very angry.

 

http://www.zerohedge.com/news/2017-04-11/2017-debt-crisis-looms-congress-will-have-4-days-avoid-government-shutdown-april-29

[DocSnowball]

I'd say that another dozen arguments could be filed tomorrow since the whole deal, everything about it, stinks to holy hell. Maybe not tomorrow but I also suspect they will be. Then one day we will all be able to tell the grandkids that we beat the govt's butt with patience, and it actually paid us for it!

 

"An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.”

 

And another one...

To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.”

 

[Guest cherzeca]

I'm beginning to get angry.

 

http://www.foxbusiness.com/politics/2017/04/11/white-house-walks-back-timing-size-tax-cuts-puts-stock-rally-in-jeopardy.html

 

Very angry.

 

http://www.zerohedge.com/news/2017-04-11/2017-debt-crisis-looms-congress-will-have-4-days-avoid-government-shutdown-april-29

 

http://www.cnbc.com/2017/04/11/trumps-budget-director-is-at-home-in-the-eye-of-the-storm.html

 

"MULVANEY: Here's the message across the board. You're going to see the White House take more leadership on the issues — on tax reform, on infrastructure, on funding. You're going to see a much more policy-assertive White House going forward."

 

given that i "expect" mnuchin's position on GSEs is preferable to sen corker's, i am happy with a more policy-assertive POTUS going forward in dealing with congress...even if it takes a little longer

[Desert_Rat]

That's all well and good, but the issue isn't necessarily the WH. Sure, DJT deserves blame for his apparent inability to work with different factions, but the real issue is those factions. Nothing can be accomplished without majority support, and the WH actually has less of that than Obama did with minorities in both houses.

 

[Luke 532]

CHOICE Act 2.0 is out...

http://www.housingwire.com/articles/39835-republicans-propose-drastic-overhaul-of-dodd-frank-and-cfpb

 

Interesting that the POTUS will be able to remove Director of FHFA (Watt) at will in version 2.0 of the Financial CHOICE Act.

 

Version 2.0 (new)

FHFA Director removable at will by the President.  No changes to

current law regarding OCC and NCUA.  FDIC structure same as

CHOICE

 

Version 1.0 (old)

Restructured the FHFA and OCC as bipartisan commissions. 

Reorganized FDIC as a bipartisan commission where all five commissioners are appointed by the President (removes Comptroller of Currency and CFPB Director from Board).  Moved NCUA board from three members to five.

 

Here's the PDF: http://www.housingwire.com/ext/resources/images/editorial/BS_ticker/PDF/CHOICE-20-Changes.pdf

[Luke 532]

https://www.wsj.com/articles/trump-threatens-to-withhold-payments-to-insurers-to-press-democrats-on-health-bill-1492029844?mod=e2tw

In an interview in the Oval Office, Mr. Trump said the executive branch may lack legal authority to make the payments established under his predecessor to reduce copayments and deductibles for some of the poorest customers who buy insurance under the 2010 Affordable Care Act. Cutting off the payments could trigger turmoil in insurance markets.

[investorG]

https://www.wsj.com/articles/trump-threatens-to-withhold-payments-to-insurers-to-press-democrats-on-health-bill-1492029844?mod=e2tw

In an interview in the Oval Office, Mr. Trump said the executive branch may lack legal authority to make the payments established under his predecessor to reduce copayments and deductibles for some of the poorest customers who buy insurance under the 2010 Affordable Care Act. Cutting off the payments could trigger turmoil in insurance markets.

 

this is likely an important juncture.

 

On one hand, Trump doesn't want to be accused of pushing an already failing Obamacare over the cliff, and so he might continue the appeal and the payments for a defined time period until his plan is expected to pass; likely extending the NWS.

 

On the other hand, Trump believes it's un-American to change the terms of a deal 4 years later to sweep 100pct of corporate profits and bypass Congress to fund insurance payments to healthcare companies (even if the courts say the sweep is legal).  He exposes the issue.

 

[beaufort]

I am getting restless waiting for the Sweeney court documents. 

 

@lawyers familiar with rules of civil procedure for subject court

 

In what context, if any, will we, the pubic/non-parties, be entitled to know the contents of the documents?

 

I would think by end of business day today Fairholme lawyers would have 40-50% of the producible docs.

[Guest cherzeca]

"In what context, if any, will we, the pubic/non-parties, be entitled to know the contents of the documents?"

 

when sweeney lifts seal, or they are obtained by an alternative method not under seal

[Spekulatius]

I'd say that another dozen arguments could be filed tomorrow since the whole deal, everything about it, stinks to holy hell. Maybe not tomorrow but I also suspect they will be. Then one day we will all be able to tell the grandkids that we beat the govt's butt with patience, and it actually paid us for it!

 

"An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.”

 

And another one...

To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.”

 

And another one...

You've gotta know when to hold them and gotta know when to fold them....

[DocSnowball]

Being a novice I made an error going up to 20% of my portfolio on this - after this investment, I'm never going outside my circle of competence!

[Desert_Rat]

I'd say that another dozen arguments could be filed tomorrow since the whole deal, everything about it, stinks to holy hell. Maybe not tomorrow but I also suspect they will be. Then one day we will all be able to tell the grandkids that we beat the govt's butt with patience, and it actually paid us for it!

 

"An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.”

 

And another one...

To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.”

 

And another one...

You've gotta know when to hold them and gotta know when to fold them....

 

Games are won by players who focus on the playing field, not by those whose eyes are glued to the scoreboard

[Desert_Rat]

Being a novice I made an error going up to 20% of my portfolio on this - after this investment, I'm never going outside my circle of competence!

 

Time to reweigh, I'm down to 27.4%

[Luke 532]

This has dropped so much, both preferreds and common. What is left to look forward to? Any ray of hope here? Why are preferreds dropping so much? close to 40% drop since their highs after election.

 

I recommend reading (or re-reading) Chapter 8 of The Intelligent Investor. 

[orthopa]

I find it interesting some people are getting so bearish. The documents should be released soon!

[deadspace]

I find it interesting some people are getting so bearish. The documents should be released soon!

 

After the decision from the appeals court that motive does not matter we have to ask ourselves what do we hope to gain with these documents.    They could totally admit that they wanted to screw shareholders and take all profits and it won't matter.  This is a see no evil/hear no evil judicial system when it comes to the net worth sweep.

[TonyG]

Mnuchin is probably letting it play out a bit longer. He needs to be able to defend his decision when he ultimately selects a path forward and explain why it's the best one for the mortgage industry.

[Desert_Rat]

I find it interesting some people are getting so bearish. The documents should be released soon!

 

After the decision from the appeals court that motive does not matter we have to ask ourselves what do we hope to gain with these documents.    They could totally admit that they wanted to screw shareholders and take all profits and it won't matter.  This is a see no evil/hear no evil judicial system when it comes to the net worth sweep.

 

That entire ruling was littered with references about FnF needing capital infusions to stay afloat as late as 2012 and no proof that the FHFA acted under improper motivations, when the entire world, based on information that has come out, assumes the opposite. Yeah, I think proof of both could be gleaned from private communication between the principles around the time of their decision to go fully gangsta govt. And, yeah, there's a decent chance Millet and Ginsburg will feel had.

 

 

[deadspace]

I'm afraid I disagree. There was more than enough evidence for Miller and Ginsberg to see that something was not right. There is no mechanism to now overturn this decision based on new evidence. It seems that any rational person could see the government arhuement as lacking in substance. 

 

We are unfortunately down the rabbit hole here.  So more logic. More sense.  More evidence.  It's not going to change this.  And I'm afraid I never thought I would see something like this coming from the US court system.  But it's taught

Me an important lesson about investing in these situations.  I'm not the only one I would guess. And god  help  the financial institution that starts to look a little wobbly next.  It will vanish immediately

[Desert_Rat]

Which is a pretty important reason as to why this will eventually be resolved equitably.

 

I never said the courts would overturn anything. Matter of fact I'm on record that the courts won't help us at all. But when the fraud is made even more obvious the govt will act. It has to.

 

[Gregmal]

IDK, I'll preface this by saying I am long these as well, however something I've struggled with is the basis for these claims. It all seems outrageously rife with hind site thinking and Monday morning quarterback mentality. Essentially investors hearing the winning lottery numbers and then claiming they had the tickets before it was announced.

 

On the one hand, I agree with pretty much everything the bulls here are saying(fundamentally in terms of what's legally right and wrong), hence I own the securities. However the other side of things, one that isn't so compelling, is the simple fact that these companies, along with many others were in dire situations. Maybe they weren't insolvent, but they were shut out of the capital markets and the lender of last resorts did so on rather onerous terms. This lender, essentially held the fate of these companies in their hands. Just because they acted differently with AIG or C, doesn't mean they had to do so with Fannie and Freddie. That lender, then down the line changed the rules, but if you think about it, any majority owner would seemingly have similar ability to do so if they owned equivalent amounts of a given company, and the rest of the shareholders would just kind of be screwed without any recourse. More troubling if I am playing devil's advocate, is that it seems like every long here, got long well after the doomsday events that shaped the reconfiguration of these entities. IMO the argument that "yea these companies were stolen and obviously they were healthy" doesnt really hold as much water if you werent previously invested in them during the time period in question. Your argument essentially is what? That it was so obvious they were healthy but I didn't make an investment until 2012? If it was such a no brainer that these entities were healthy at the time, why weren't they able to access the capital markets? Specifically in relation to the preferreds, look at a lot of the O&G companies that have recently been thru chapter 11. This IMO was just a messier(not surprising bc the government was involved) re-org.

 

I hope it all works out. But a lot of the arguments, while fundamentally pretty damn sound and legally compelling, are all hind site based and IMO wishful hoping.

[Spekulatius]

I'm afraid I disagree. There was more than enough evidence for Miller and Ginsberg to see that something was not right. There is no mechanism to now overturn this decision based on new evidence. It seems that any rational person could see the government arhuement as lacking in substance. 

 

We are unfortunately down the rabbit hole here.  So more logic. More sense.  More evidence.  It's not going to change this.  And I'm afraid I never thought I would see something like this coming from the US court system.  But it's taught

Me an important lesson about investing in these situations.  I'm not the only one I would guess. And god  help  the financial institution that starts to look a little wobbly next.  It will vanish immediately

 

Financials are different in the sense that treating the owners fairly is not the main concern of the regulators. Since most of the capital that financial are working with is debt of some sorts, the  main concern is that the creditors and are made whole as much as possible, because the trust that you get paid back is what keeps the financial system functioning. If the owners lose, well that is their problem, but as long as the financial system works, it is not a major concern for the regulators . I always felt that bowing to the regulators is the price to pay for getting access to other people's money at favorable terms.