Guest cherzeca Posted May 16, 2019 Share Posted May 16, 2019 Good news re Phillips quote. I’m not even fussed anymore by competition reference. Sen brown isn’t convinced it’s needed and mad Maxine will side with brown so no legislation creating competition during this Congress Link to comment Share on other sites More sharing options...
Luke 532 Posted May 16, 2019 Share Posted May 16, 2019 Phillips is leaving next month: https://www.nytimes.com/2019/05/16/business/craig-phillips-treasury-fannie-mae-freddie-mac.html Link to comment Share on other sites More sharing options...
Midas79 Posted May 16, 2019 Share Posted May 16, 2019 Phillips is leaving next month: https://www.nytimes.com/2019/05/16/business/craig-phillips-treasury-fannie-mae-freddie-mac.html On the surface, I don't like this. There are still too many moving parts, and Phillips has been one of the main people pushing things along. But perhaps his part of the heavy lifting is already done? Link to comment Share on other sites More sharing options...
Guest cherzeca Posted May 16, 2019 Share Posted May 16, 2019 Phillips is leaving next month: https://www.nytimes.com/2019/05/16/business/craig-phillips-treasury-fannie-mae-freddie-mac.html On the surface, I don't like this. There are still too many moving parts, and Phillips has been one of the main people pushing things along. But perhaps his part of the heavy lifting is already done? frankly, I love it I never trusted the guy, thought he was a tbtf inside plant. he was in charge of PLS at Morgan Stanley, no fan of the GSEs, he hated them when he was on street. my best guess is that the treasury plan is baked and ready to go, he has no more value to add, and he is going to one of the banks that will get the mandate for the capital raise, claim all the credit and get a windfall bonus next year. now would be the right time to cash in on two years in DC Link to comment Share on other sites More sharing options...
allnatural Posted May 16, 2019 Share Posted May 16, 2019 My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted May 16, 2019 Share Posted May 16, 2019 My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting. phillips predecessor as counselor to treasury secretary (for Obama) was Antonio Weiss former head of M&A at Lazard. Weiss did not have a good exit. had to start his own boutique and is not ringing the bell frankly. Phillips knows this, believe me, and has been having his eye on a good exit. and what better time to get back on street than when the street is about to get a multi-billion mandate. this is all good news. if more work needed to be done on the treasury plan, my guess is that he wouldn't have been able to pull the ripcord Link to comment Share on other sites More sharing options...
orthopa Posted May 16, 2019 Share Posted May 16, 2019 My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting. Exactly. His job is done. Everyone signed off remember? cherzeca, I bet you like this part of the article. "Mr. Phillips and other Treasury officials have been meeting with the biggest American banks to determine how best to raise capital for Fannie and Freddie — a prerequisite to releasing them from government control — as well as how the housing finance system might be restructured, according to two people who participated in the meetings." There is the news they are lining up the bankers. Another check on the list. Mnuchins goal of within 6 months or by the end of the year seems intact. Question for me would be do any of the big preferred holders have influence on "Americas biggest banks"? Link to comment Share on other sites More sharing options...
Midas79 Posted May 16, 2019 Share Posted May 16, 2019 In less-liquid news, two 9,000 share blocks of FMCCT changed hands at $20.32 and $20.33, and two 12,200 share blocks of FNMAL changed hands at $20.25 and $20.26 today. Those caught my eye because they are relatively large blocks, but mainly because they mark the first over-$20 trades I have seen on the $50-par series, though FMCCT has had other small blocks trade at $20 and $20.50 today. FMCCT has a somewhat high fixed dividend compared to other series (6.42%), but FNMAL has a low fixed dividend (4.75%). The correlation that I track is still around 0.8 in aggregate, but things are starting to stratify rather than fall along a regression line. The Fannie 50s are all trading near each other despite their different dividend rates, as are the Fannie 25s (I swapped some FNMAJ for FNMAT at near parity just now!). In the Freddie 25s, FMCKL (6.02%) and FMCKI (6.55%) are outperforming, but FMCKO (5.9%) is lagging well behind. The Freddie 50s have a similar pattern, where FMCCT is the clear leader, but FMCCP (6%) for some reason stays much closer to FMCCT than the others (dividends from 5.7-5.81%). I am somewhat loath to part with my now-sizeable FNMAT stake, but it seems that the market is starting to prioritize par value. This makes sense because FNMAT has no call protection, and if any series are to be called it will be first. Note: I only follow the fixed-dividend series because those are the only ones I can buy. Analysis that includes the variable-dividend series will have to be done by someone else. Link to comment Share on other sites More sharing options...
Midas79 Posted May 16, 2019 Share Posted May 16, 2019 Somewhat off-topic, but I found it funny: someone searched all of Gasparino's tweets for the word "basement", and as far as I can tell it is preceded by "mom's" (with or without the apostrophe) every single time. He does this several times a month on average. https://twitter.com/search?f=tweets&vertical=default&q=from%3Acgasparino+basement While I am not a fan of the #Fanniegate movement on Twitter (I think it makes shareholders look stupid, greedy, or both), I don't mind them trolling Gasparino because, well, he deserves it. Link to comment Share on other sites More sharing options...
Wiggins Posted May 16, 2019 Share Posted May 16, 2019 My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting. Exactly. His job is done. Everyone signed off remember? cherzeca, I bet you like this part of the article. "Mr. Phillips and other Treasury officials have been meeting with the biggest American banks to determine how best to raise capital for Fannie and Freddie — a prerequisite to releasing them from government control — as well as how the housing finance system might be restructured, according to two people who participated in the meetings." There is the news they are lining up the bankers. Another check on the list. Mnuchins goal of within 6 months or by the end of the year seems intact. Question for me would be do any of the big preferred holders have influence on "Americas biggest banks"? Can't help but think of John Paulson and Goldman Sachs being thick as thieves - literally - on the infamous ABACUS deal and subsequent lawsuits. This is where JP netted nearly a billion dollars in a single transaction. Link to comment Share on other sites More sharing options...
Ahab Posted May 16, 2019 Share Posted May 16, 2019 @Midas I also often find that Fanniegate comes across as annoyingly naive. Yes, I feel common holders got shafted. No, the common share prices aren't going to be worth $100 next year, barring God himself demanding it from the U.S. Treasury. Gasparino is amusing, I consider him to be a national treasure. No other financial reporter is so consistently wrong on the hot stocks of our era. Whether it is Fannie Mae or Tesla, Gasparino can be counted on to provide bad internet banter. Link to comment Share on other sites More sharing options...
muscleman Posted May 17, 2019 Share Posted May 17, 2019 from Glen: Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims. Judge Lamberth declined FHFA and the GSEs’ invitation. Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial. A copy of Judge Lamber’s decision is attached to this e-mail message. Link to comment Share on other sites More sharing options...
allnatural Posted May 17, 2019 Share Posted May 17, 2019 Politico confirmed Phillips "recently wrapped up more than 60 meetings with stakeholders" and "will stay until the completion of the Treasury Housing Reform Plan." Seems like his role has come to an end. Link to comment Share on other sites More sharing options...
james22 Posted May 17, 2019 Share Posted May 17, 2019 I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up.. recap mechanics should trip you up since no one knows what the hell is coming. this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative. but then, ahab, you are a hunter for the big whale.... The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out. Or I'll go back to work... How big is "big," DR? And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain? Anyone? Link to comment Share on other sites More sharing options...
allnatural Posted May 17, 2019 Share Posted May 17, 2019 >50% of my portfolio... All pfds... i dont know exact probabilities but market is continuing to price in >50% chance this is a zero vs Par... that continues to be a mispricing as I see it. Common has too many unknown variables to make an educated guess from where i sit. They may be the sacrificial lamb in the whole process. And the more capital required the heavier the dilution (potential for >99% dilution is on the table). I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up.. recap mechanics should trip you up since no one knows what the hell is coming. this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative. but then, ahab, you are a hunter for the big whale.... The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out. Or I'll go back to work... How big is "big," DR? And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain? Anyone? Link to comment Share on other sites More sharing options...
Wiggins Posted May 17, 2019 Share Posted May 17, 2019 "too many unknown variables" for common Agreed. But you can think about just the one, single upcoming variable which is likely to affect them the most: en banc. It could have a huge positive impact on commons. It would help cap the amount of dilution that is going to occur. It's hard to imagine they don't have considerable upside after a positive en banc decision. Preferred shares are not as affected by the en banc decision. >50% of my portfolio... All pfds... i dont know exact probabilities but market is continuing to price in >50% chance this is a zero vs Par... that continues to be a mispricing as I see it. Common has too many unknown variables to make an educated guess from where i sit. They may be the sacrificial lamb in the whole process. And the more capital required the heavier the dilution (potential for >99% dilution is on the table). I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up.. recap mechanics should trip you up since no one knows what the hell is coming. this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative. but then, ahab, you are a hunter for the big whale.... The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out. Or I'll go back to work... How big is "big," DR? And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain? Anyone? Link to comment Share on other sites More sharing options...
Luke 532 Posted May 17, 2019 Share Posted May 17, 2019 from Glen: Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims. Judge Lamberth declined FHFA and the GSEs’ invitation. Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial. A copy of Judge Lamber’s decision is attached to this e-mail message. Court doc attached...13-mc-01288-0104.pdf Link to comment Share on other sites More sharing options...
DRValue Posted May 17, 2019 Share Posted May 17, 2019 I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up.. recap mechanics should trip you up since no one knows what the hell is coming. this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative. but then, ahab, you are a hunter for the big whale.... The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out. Or I'll go back to work... How big is "big," DR? And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain? Anyone? About 60% of my portfolio. All my common exposure is hedged with prefs and my average common cost is $1.40, I dipped in at $1 in January as i couldn't believe the price was falling as it was all getting more positive. 0% chance of total loss. I cant give a % chance of gain as the way i work is based on having a massive margin of safety between what it could be worth and where i buy in, the idea being you can be wrong but still make money. But my current base case is based on Moelis, so around $18 a share. Link to comment Share on other sites More sharing options...
muscleman Posted May 17, 2019 Share Posted May 17, 2019 from Glen: Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims. Judge Lamberth declined FHFA and the GSEs’ invitation. Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial. A copy of Judge Lamber’s decision is attached to this e-mail message. Court doc attached... Thank you Luke. I was using my mobile phone when I pasted Glen's twit, and it was hard to attach the pdf from the phone. What's the timeline for this? I'd expect the en banc to come out way ahead of this trial right? Link to comment Share on other sites More sharing options...
allnatural Posted May 17, 2019 Share Posted May 17, 2019 If everything goes according to the timeline laid out, we wont hear decision until back half of 2020. from Glen: Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims. Judge Lamberth declined FHFA and the GSEs’ invitation. Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial. A copy of Judge Lamber’s decision is attached to this e-mail message. Court doc attached... Thank you Luke. I was using my mobile phone when I pasted Glen's twit, and it was hard to attach the pdf from the phone. What's the timeline for this? I'd expect the en banc to come out way ahead of this trial right? Link to comment Share on other sites More sharing options...
Guest cherzeca Posted May 17, 2019 Share Posted May 17, 2019 Collin en banc "should" come out in late June (5 months from orals). Lamberth is a trial for next year. same with Sweeney. my guess is that you will see the common trend up in anticipation of collins. common should have a bigger % upside than prefs on collins. of course collins is not assured, and the juniors are way "safer", but if you want to play collins itself that would probably be best done with commons Link to comment Share on other sites More sharing options...
rros Posted May 17, 2019 Share Posted May 17, 2019 from Glen: Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims. Judge Lamberth declined FHFA and the GSEs’ invitation. Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial. A copy of Judge Lamber’s decision is attached to this e-mail message. Court doc attached... Thank you, Luke. And Muscle. Don't you guys love this logic? Link to comment Share on other sites More sharing options...
DRValue Posted May 17, 2019 Share Posted May 17, 2019 Collin en banc "should" come out in late June (5 months from orals). Lamberth is a trial for next year. same with Sweeney. my guess is that you will see the common trend up in anticipation of collins. common should have a bigger % upside than prefs on collins. of course collins is not assured, and the juniors are way "safer", but if you want to play collins itself that would probably be best done with commons Newb legal question; If the prefs are redeemed prior to the Lamberth trial, would you still have a claim? Assuming it's not settled. Link to comment Share on other sites More sharing options...
DRValue Posted May 17, 2019 Share Posted May 17, 2019 Link to Trump Live at NAR: Link to comment Share on other sites More sharing options...
allnatural Posted May 17, 2019 Share Posted May 17, 2019 I think this is first time anyone in admin has admitted theyve been fully paid back on GSEs bailout (and more)... Phillips from yesterday.. Claims taxpayer IRR is up to 12%.. Easy to write off senior pfds when you share that view. https://pbs.twimg.com/media/D6yMjFSW0AgFxoT.png:large Link to comment Share on other sites More sharing options...
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