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

[muscleman]

This was my post some time last year.

I know a lot of you disagreed with me strongly at that time. Looking at it now, it was the correct reading.

 

Gloating over what amounts to a lucky guess is poor form. From what I remember, some of us didn't disagree with your conclusions but instead the methods used to come to them. There is nothing to suggest that your investing method produces reliable results.

 

Perhaps you really do have a real alpha-generating system that the rest of us just don't understand. But one data point doesn't prove anything.

 

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

[Wiggins]

Hi Muscleman

Great call last year.

What say you now? Bullish, bearish?

I bought on Monday and divulged my call yesterday to the group.

 

Best all...

 

This was my post some time last year.

I know a lot of you disagreed with me strongly at that time. Looking at it now, it was the correct reading.

 

Gloating over what amounts to a lucky guess is poor form. From what I remember, some of us didn't disagree with your conclusions but instead the methods used to come to them. There is nothing to suggest that your investing method produces reliable results.

 

Perhaps you really do have a real alpha-generating system that the rest of us just don't understand. But one data point doesn't prove anything.

 

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

[Midas79]

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism.

 

I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork.

[muscleman]

Hi Muscleman

Great call last year.

What say you now? Bullish, bearish?

I bought on Monday and divulged my call yesterday to the group.

 

Best all...

 

This was my post some time last year.

I know a lot of you disagreed with me strongly at that time. Looking at it now, it was the correct reading.

 

Gloating over what amounts to a lucky guess is poor form. From what I remember, some of us didn't disagree with your conclusions but instead the methods used to come to them. There is nothing to suggest that your investing method produces reliable results.

 

Perhaps you really do have a real alpha-generating system that the rest of us just don't understand. But one data point doesn't prove anything.

 

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

Too early to tell.

[Luke 532]

Treasury wants servicer liquidity. Thoughts on how this might impact GSE's?  Article linked below...

 

[Wiggins]

Treasury wants servicer liquidity. Thoughts on how this might impact GSE's?  Article linked below...

 

 

Perhaps MBA is getting some traction although much of this seems like an extension of what they've been kvetching about for days. I don't have a great sense of the political situation here; I'll admit that.

 

I DO think we're very close to the inflection point for Covid-19.

According to this model, that's coming far sooner than most anticipated. If you haven't checked it out yet, you may like it. It's updated every day, you can view different countries, the USA as a whole, or US state by state.

If this is anywhere close to being true then it's fantastic news.

 

http://covid19.healthdata.org/united-states-of-america

[Guest cherzeca]

Treasury wants servicer liquidity. Thoughts on how this might impact GSE's?  Article linked below...

 

 

this is a plus for the mortgage market if it happens.  I am sure that will bring investorG back from the edge.

 

of course, the fed could have done the same thing in 2008 with respect to there GSEs themselves.  but that is ancient history

[muscleman]

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism.

 

I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork.

 

Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong.

I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore.

[Midas79]

Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong.

I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore.

 

You called the top in the first post I responded to, saying "I think a major top is right here." That's one data point.

 

You also clearly didn't come here to help at all. Everything you have said today is either gloating, self-defense, or an attack against me. As such, it is deserving of hostility in return.

[Guest Covid-19_Survivor]

"assumption that Mr. Market may have deeper knowledge than us"

 

Crazy thoughts. Just nuts.

[investorG]

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism.

 

I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork.

 

Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong.

I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore.

 

muscleman your call from 2019 was epic.  no one can deny that.  going forward please contribute additional calls with any color on your TA work for FnF and don't look back.  There's a good chance your return in that capacity would be appreciated by most or all here.

[Guest cherzeca]

any and all are welcome here, and are welcome to be criticized and excoriated by any one and all, who think appropriate.  this is a first class thread, and can only be so if all participate and any and all are willing to give and take.

[Guest Covid-19_Survivor]

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism.

 

I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork.

 

Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong.

I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore.

 

muscleman your call from 2019 was epic.  no one can deny that.  going forward please contribute additional calls with any color on your TA work for FnF and don't look back.  There's a good chance your return in that capacity would be appreciated by most or all here.

 

No one? you sure?

 

It wasn't 'epic', it was just him supposedly selling on short term bullishness. Doing so has been smart with FnF, I'll give him that if he actually did, but if you really believe his 'chart' instructed him, you should know it doesn't work that way. No chartist works on stocks/preferreds which trade 10k/day. His chart is absurd.

 

He's basically claiming he called the pandemic.

 

[orthopa]

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism.

 

I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork.

 

Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong.

I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore.

 

muscleman your call from 2019 was epic.  no one can deny that.  going forward please contribute additional calls with any color on your TA work for FnF and don't look back.  There's a good chance your return in that capacity would be appreciated by most or all here.

 

No one? you sure?

 

It wasn't 'epic', it was just him supposedly selling on short term bullishness. Doing so has been smart with FnF, I'll give him that if he actually did, but if you really believe his 'chart' instructed him, you should know it doesn't work that way. No chartist works on stocks/preferreds which trade 10k/day. His chart is absurd.

 

He's basically claiming he called the pandemic.

 

Correct, I would note too that he didn't tell us to buy last week which is a strike against also  ;D

 

I get it, some people like his input as an attempt of forecasting. That's fine but for a while I didn't get it. But after going to a strip club I realized I didn't mind watching the fat girls dance too,  so now I get it.  Even if it doesn't add value it didn't cost you anything if you were going to the strip club/message board anyway. Its usefulness wouldn't be worth going in the back for lack of better comparison.

 

 

[orthopa]

Hi Muscleman

Great call last year.

What say you now? Bullish, bearish?

I bought on Monday and divulged my call yesterday to the group.

 

Best all...

 

This was my post some time last year.

I know a lot of you disagreed with me strongly at that time. Looking at it now, it was the correct reading.

 

Gloating over what amounts to a lucky guess is poor form. From what I remember, some of us didn't disagree with your conclusions but instead the methods used to come to them. There is nothing to suggest that your investing method produces reliable results.

 

Perhaps you really do have a real alpha-generating system that the rest of us just don't understand. But one data point doesn't prove anything.

 

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

Too early to tell.

 

Correct, as he has done in the past he will let you know after it happens.

[buffetteer1984]

Anyone willing to risk hard earn money based on drawings is a fool.  He didn't forecast anything.  You could make the same claim to any stock on this planet and they'd all be down.  If he "saw" it he would've shorted everything.  It's not like he was smart enough like an ackman to actually make money on his "predictions". 

 

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism.

 

I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork.

 

Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong.

I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore.

 

muscleman your call from 2019 was epic.  no one can deny that.  going forward please contribute additional calls with any color on your TA work for FnF and don't look back.  There's a good chance your return in that capacity would be appreciated by most or all here.

 

No one? you sure?

 

It wasn't 'epic', it was just him supposedly selling on short term bullishness. Doing so has been smart with FnF, I'll give him that if he actually did, but if you really believe his 'chart' instructed him, you should know it doesn't work that way. No chartist works on stocks/preferreds which trade 10k/day. His chart is absurd.

 

He's basically claiming he called the pandemic.

 

Correct, I would note too that he didn't tell us to buy last week which is a strike against also  ;D

 

I get it, some people like his input as an attempt of forecasting. That's fine but for a while I didn't get it. But after going to a strip club I realized I didn't mind watching the fat girls dance too,  so now I get it.  Even if it doesn't add value it didn't cost you anything if you were going to the strip club/message board anyway. Its usefulness wouldn't be worth going in the back for lack of better comparison.

 

 

[Luke 532]

Inspector General report on FHFA from March 30th.

https://www.fhfaoig.gov/sites/default/files/OIG-2020-002.pdf

[Luke 532]

Pasting entire article in case it gets deleted/removed from the website it's on...

 

Payback Time: Why COVID-19 Forces the Federal Government to Pay Its Debt to Housing

https://medium.com/@HPEquityTrust/payback-time-why-covid-19-forces-the-federal-government-to-pay-its-debt-to-housing-2b802c928468

 

by Anne Segrest McCulloch, Social Impact CEO

 

As a nation, we face a moral imperative: shelter-in-place orders today should not have the effect of soon denying shelter to Americans.

 

For the past 10 years, Washington has imposed a hidden tax on homeowners and renters so that it could keep the federal budget afloat. Every month, Americans paid their mortgages or covered their landlord’s mortgages by paying rent. That money flowed to and through two, giant, government-controlled utilities — Fannie Mae and Freddie Mac — and directly into the U.S. Treasury.

 

It was an unfair transfer of wealth. And it’s time to pay it back. Why? Because the COVID-19 crisis is about to spawn a housing crisis that, as things are currently structured, we simply cannot manage without those funds.

 

Let’s face it, it was a great deal for those charged with trying to balance the budget. The revenue grab was made possible politically by the lingering resentment of Fannie and Freddie’s past, perceived sins.

 

It almost felt like free money. But it wasn’t. And most Americans, going about dutifully paying their mortgage or rent, had no idea their money — which could have been used to keep a housing finance system healthy for all — was being funneled into the U.S. Treasury.

 

What is this thing we call the housing finance system? Put it this way: If you’re paying for a roof over your head, there’s a complex web of pipes and levers uniquely constructed to get money flowing to you, in the form of funds for buying, selling or investing in that roof, and millions more like it. That same plumbing also flows in reverse, taking those billions in monthly payments back upstream to replenish the supply for others.

 

When the federal government nationalized Fannie and Freddie in 2008, that pipeline was redirected to feed the federal budget — the whole budget, not just federal housing programs.

 

It would have been better if they had allowed that money to continue circulating within a system that is specifically designed to assure, for all Americans, accessibility and affordability in housing. But they didn’t. And now, as jobs disappear and wages disintegrate, many thousands of Americans face foreclosure or eviction, with only the thread-bare facsimile of a safety net.

 

Federal officials, of both parties, could have reserved that capital for this rainiest of days. That would have strengthened Fannie and Freddie, so that they would be ready to do what they always were intended for: to provide strength and stability in the housing of Americans, especially in the worst of times.

 

Now Fannie’s and Freddie’s federal conservator has warned, in an interview with the Financial Times, that the two firms could run out of money in just three months and would then require yet another federal bailout.

 

So, what does that mean for the well-being of our fellow citizens? In a phrase, housing insecurity. In times of hardship, nothing is more important than a secure place to live.

 

Today, Americans are hurting. Public relief is not yet flowing fast enough to mitigate the pain that is rapidly flowing toward homeowners and renters, as well as landlords, financial institutions, and, ultimately, bondholders.

 

Renters often have relatively few funds in reserve, so they and the owners of their rental properties need emergency support right now. Too many renters simply will not have the ability to make up missed rent payments.

 

In ordinary times, it might take two to three weeks after a worker filed for unemployment insurance to get a payment. With record-high first-time jobless claims, that time can be expected to stretch out considerably. Meanwhile, a 2018 Federal Reserve study found that almost 40 percent of American adults wouldn’t be able to cover a $400 emergency with cash, savings or a credit card charge that they could quickly pay off. As a result, families are tapping their limited resources to pay for food and medicine and may have little to nothing to apply to rent.

 

The current proposals for mortgage forbearance for apartment owners provide for up to three months of mortgage forbearance in exchange for a moratorium on evictions and waiver of penalty fees. That’s a good start. But the current guidance also would require repayment of the deferred mortgage payments over the following 12 months. Unless renters can make up their lost payments, after the moratorium is lifted, apartment owners who don’t have deep, deep reserves will have only two choices to make up the gap left by renters who don’t make up their delayed payments: 1) charge higher rents or b) evict renters and start collections actions. Either will hurt the millions of working families who, even before today’s crisis, found it nearly impossible to find safe, decent or affordable housing.

 

Homeowners can also apply for hardship forbearance on their mortgages. If Fannie and Freddie, and the Federal Housing Administration (FHA), apply the lessons learned during the 2008 financial crisis, homeowners will ultimately be able to get a loan modification (and maybe even loan forgiveness), when we begin to emerge from the COVID-19 crisis. But that is going to require a well-functioning system which includes: a) mortgage servicers having the capacity to engage consumers immediately; and b) capital on hand, at Fannie and Freddie, to make up for shortfalls in collections, so they can make good on commitments to bondholders to make timely payment of principal and interest.

 

As a nation, we face a moral imperative: shelter-in-place orders today should not have the effect of soon denying shelter to Americans. The federal government should immediately return to housing a significant portion of the funds it has drained from the housing finance system. Yes, it’s a radical departure from the direction we all thought we were headed with Fannie and Freddie only a few weeks ago. The generally accepted plan was to free them from government ownership. But this would be an absurd time for the government to conduct an IPO, which the releasing of the two firms would essentially be.

 

COVID-19 has changed the paradigm for many things. Fannie and Freddie are no different. The good news is that they are extremely well-equipped to execute this payback to housing from the federal government. It would require no reengineering of the way they operate because they already are embedded in the nation’s mechanisms for delivering liquidity for housing. It’s what they do.

 

Paying back its debt to housing is the right thing for the federal government to do. It is the only thing that will bring real stability to housing. In this unprecedented time, it’s the best way to support homeowners and renters, as well as the infrastructure of property owners, lenders and mortgage servicers who keep the nation’s housing system intact.

 

Anne Segrest McColloch is President and CEO of the Housing Partnership Equity Trust (HPET) and a former Fannie Mae executive. HPET is a Washington, DC-based social-purpose real estate investment trust (REIT) that acquires and preserves affordable housing in partnership with leading nonprofit apartment owners.

[investorG]

Pasting entire article in case it gets deleted/removed from the website it's on...

 

Payback Time: Why COVID-19 Forces the Federal Government to Pay Its Debt to Housing

https://medium.com/@HPEquityTrust/payback-time-why-covid-19-forces-the-federal-government-to-pay-its-debt-to-housing-2b802c928468

 

by Anne Segrest McCulloch, Social Impact CEO

 

 

Fantastic article.  An IPO, capital rules, conversions, etc, is distracting and premature given what we're facing. 

 

Settle the Collins lawsuit, 4th amendment, retire sr pref, exercise warrants, and inject (return) $[50]bn from the Mnuchin fund to let FnF help Americans while also righting a prior wrong at the same time.

[TwoCitiesCapital]

Anyone willing to risk hard earn money based on drawings is a fool.  He didn't forecast anything.  You could make the same claim to any stock on this planet and they'd all be down.  If he "saw" it he would've shorted everything.  It's not like he was smart enough like an ackman to actually make money on his "predictions". 

 

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism.

 

I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork.

 

Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong.

I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore.

 

muscleman your call from 2019 was epic.  no one can deny that.  going forward please contribute additional calls with any color on your TA work for FnF and don't look back.  There's a good chance your return in that capacity would be appreciated by most or all here.

 

No one? you sure?

 

It wasn't 'epic', it was just him supposedly selling on short term bullishness. Doing so has been smart with FnF, I'll give him that if he actually did, but if you really believe his 'chart' instructed him, you should know it doesn't work that way. No chartist works on stocks/preferreds which trade 10k/day. His chart is absurd.

 

He's basically claiming he called the pandemic.

 

Correct, I would note too that he didn't tell us to buy last week which is a strike against also  ;D

 

I get it, some people like his input as an attempt of forecasting. That's fine but for a while I didn't get it. But after going to a strip club I realized I didn't mind watching the fat girls dance too,  so now I get it.  Even if it doesn't add value it didn't cost you anything if you were going to the strip club/message board anyway. Its usefulness wouldn't be worth going in the back for lack of better comparison.

 

 

 

To be fair, it's not as if he called that the stock would go down. He called the top of an idiosyncratic investment, which topped several months before the top in the overall market.

 

Luck or skill? I can't say, but he certainly did more than what you're implying.

[buffetteer1984]

Sure in a normal environment if a top was called on a the stock and dropped 50% kudos to anybody that makes a call of that nature.  But this period has exaggerated every move to the downside in the market.  My point is you could call tops on anything you've sold prior to the down draft and you'd look like a genius.  Now to the degree of the drop did you expect it or was it luck? Because i'm sure if fnmas had only dropped 5/10% nobody would be speaking of this "top".

 

Anyone willing to risk hard earn money based on drawings is a fool.  He didn't forecast anything.  You could make the same claim to any stock on this planet and they'd all be down.  If he "saw" it he would've shorted everything.  It's not like he was smart enough like an ackman to actually make money on his "predictions". 

 

I have been bullish all the time last year until the end of September, and you call it "one data point"? If that's your understanding of statistics, then I have nothing further to say.

 

I don't believe a pure mechanical system such as one magical moving average crossing another can provide alpha. My analysis is based on the assumption that Mr. Market may have deeper knowledge than us and watching how Mr. Market reacts to major news may tip off what he thinks.

 

You're the one that brought up a single data point, not me. You're also the one that calls your system TA, which generally implies a high (if not 100%) level of mechanism.

 

I don't understand why your system works or why it should work. If you have had sustainable success with your system, good for you. But a value investing forum is not the place to be gloating about a result of a system that is, from a value investor's perspective, indistinguishable from guesswork.

 

Oh really? When did I say "this is a single data point"? I thought you are smarter than putting words into my mouth to make your arguments look strong.

I came to this thread with the genuine intention to help, but look at the hostility you gave back in return. I am putting you on my ignore list, so no need to respond to this post anymore.

 

muscleman your call from 2019 was epic.  no one can deny that.  going forward please contribute additional calls with any color on your TA work for FnF and don't look back.  There's a good chance your return in that capacity would be appreciated by most or all here.

 

No one? you sure?

 

It wasn't 'epic', it was just him supposedly selling on short term bullishness. Doing so has been smart with FnF, I'll give him that if he actually did, but if you really believe his 'chart' instructed him, you should know it doesn't work that way. No chartist works on stocks/preferreds which trade 10k/day. His chart is absurd.

 

He's basically claiming he called the pandemic.

 

Correct, I would note too that he didn't tell us to buy last week which is a strike against also  ;D

 

I get it, some people like his input as an attempt of forecasting. That's fine but for a while I didn't get it. But after going to a strip club I realized I didn't mind watching the fat girls dance too,  so now I get it.  Even if it doesn't add value it didn't cost you anything if you were going to the strip club/message board anyway. Its usefulness wouldn't be worth going in the back for lack of better comparison.

 

 

 

To be fair, it's not as if he called that the stock would go down. He called the top of an idiosyncratic investment, which topped several months before the top in the overall market.

 

Luck or skill? I can't say, but he certainly did more than what you're implying.

[Sunrider]

Can we please go back to discussing points related to developments which may impact the GSE's release from conservatorship, rather than any individual's calls on the stock price movements?

 

(N.B.: I have no issue with MM's posts in this regard - any input is welcome, what I have an issue with is the discussion on whether TA works, MM's method works, MM was right or not, whether anyone should/not have followed him, etc. Everyone has to make their own call what signals/logic to follow.)

 

:)

[Guest cherzeca]

Can we please go back to discussing points related to developments which may impact the GSE's release from conservatorship, rather than any individual's calls on the stock price movements?

 

(N.B.: I have no issue with MM's posts in this regard - any input is welcome, what I have an issue with is the discussion on whether TA works, MM's method works, MM was right or not, whether anyone should/not have followed him, etc. Everyone has to make their own call what signals/logic to follow.)

 

:)

 

agree.  I would only point out that in a message board like this, where it is hard to present fully fleshed out legal/policy etc arguments in the space of a post, the most helpful posts imo are links to news items and opinion pieces that a cursory news reader (ie me) wont see, and there are plenty of posters on this thread doing that quite well, and thanks for that.  as for being "right" on a legal/policy etc basis, lord knows that is hard as I have been often "wrong" on these matters (though usually not in doubt).  as for being "right" on trading timing etc, well good luck with that.  but any and all is welcome here since we each have our own filter function.

[Luke 532]

My typed notes while listening to ACG's Q&A today.  Please excuse and grammatical errors, typos, etc...

 

Overview before Q&A...

-The progressive community is for housing.

-The hire of Milbank is very important, they start this week.

-Calabria hired Houlihan Lokey but the weakness at fhfa is general counsel, gentlemen was there long time and even mel watt frustrated

-calabria not getting clear insight with litigation, frustration with arnold and palmer

-this is real non political serious legal advice and that can't be ignored, when Milbank says this is the reason they should settle or this should be in PSPA that recommendation will be taken seriously.

-RFP focuses on pspa and what needs to be taken care of before raising capital, do it once so get on recap path. 

-timing is good, people forget two teams on field, mba team who has number of characters fought hard to continue obama policies

-path of recap but interesting moment, calabria says need to be counter cyclical

-we believe strongly lawyers and advisors looking and understand how to fortify balance sheet in a hurry, not tomorrow but milbank and houlihan lokey know what they're doing

-balance sheet is stronger than people expect, overpament to treasury if NWS not there would have been 10% dividend, if you run numbers on how much swept above it is around 25-30B, counting Q4 last year is about 23b now thanks to letter agreement from september

-3 steps to take: (1) stop sweep permanently, (2) deem senior repaid, (3) credit the overpayment.  This results in above 50b core capital with credit added to balance sheet

-stroke of pen can get this done to beef up balance sheet and bring closer to regulatory captial and make capital raise much less than what we hear is needed. -calabria very vocal about difference of ginnie, fha, and F&F. F&F have been very careful for which mortqages on their books... 740 avg fico score which is very high.

-The problems flowing less into F&F than they are into ginnie. 

-Really depends which mortgages they have and F&F have very strong mortgages.

-mba lighting up washington very vocal, world burning down

-calabria stickler for hera mandatory recap but don't have to help servicers

-jay powell watching this segment, washington view it to see where they are in 4-5 weeks before doomsday scenario

-mba talking 30-50% forbearance, gaby doesn't see it happening as in low single digits. 

-task force at treasury but data doesn't show need to extend liquidity

-if gets into political we are in counter cyclical time it would be nice to already have all that capital, but haven't been capitalized for this moment so if anything shows why F&F need to be recap for moments like this. 

-calabria stickler for statute. 

-believe cap rule out later in may

-enterprises hiring own fin advisor by july 4, work on balance sheet, Calabria strengthens his ability to be regulator and make sure enterprises have control to comply with standards the regulator puts out.

 

Q&A...

-settlement odds between now and june 1?

nothing short term, litigants not there yet, I've spoken to some of them, everything on table now though which wasn't the case 3 weeks ago, Milbank on team makes it much easier for Calabria to do cost-benefit analysis of litigation, makes no sense to defend sweep while ending sweep at same time and pay Arnold and Palmer 20m per year to do so.

 

-Receivership happen here?

Receivership not happening and not really worth the time now to discuss it. Receivership would be worst policy for government because you have to run it down and then there's no plumbing in the housing system. Receivership is not remotely possible.

 

-Treasury have manpower to get this done? 

They are underwater with personnel, but essentially there's a merger of UST and Fed right now, domestic policy worked well, don't need a lot of UST's time to get this done. Calabria, Mnuchin and Powelll have a very good relationship, one team, no distance, no friction.

 

-If Biden wins, what happens? 

He put out minor housing position calling for more affordable housing in primary season, go to urban institute website and look for housing day panel with jim parrot, he stacked the panel with guests against the enterprises, he invited Elizabeth Warren's staffer but couldn't make it so subbed with Jared Bernstein (Biden advisor) and he said he is not for blowing them up at all and that GSE's are important part of economy.  Bernstein very important advisor to biden.  progressive democrats are for recap, won't compromise on duty to serve, want larger affordable housing trust funds.

 

-crisis change landscape?

it hasn't but if it goes for longer and complete meltdown then that could change it as forbearance astronomical and home prices plunge, 8 weeks from now we'll be ok, could be pushed back couple months if earnings hit, doesn't need to happen through retained portfolios, should reopen happen then this whole thing doesn't impact prospects.

The Philosophy for recap is validated by crisis, were 1000 to 1 leveraged, now 240 to 1.  Private in front of taxpayer = validated.  example for companies that we're getting involved in as a country, go in reform and release.

 

-Settlement negotiations already happening?

I don't think so but amenable to them in not too distant future but everybody focused on other things, Milbank needs marching orders to do litigation analysis, Calabria frustrated with cost of litigation, it's illogical to defend something trying to end.

 

-Once gse reach 25b fannie, 20b freddie, can they release by consent decree? 

That is the hope released by consent decree and start having new capital coming in be comfortable.

Everyone is focused on next 90 days, statutory capital in Fall and consent decree and pspa in Fall is still intact, but recognition that private is the answer.  PSPA is most important thing to move the ball here, and then consent decree later, houlihan and milbank really helps move that forward and it puts manpower behind it when they decide they want to to do it.

 

-CRT impact?

Nobody buying CRT for awhile. Seen as weakening capital and balance sheet.

 

-Seila vs cfpb impact timeline? 

Seila come down by june 1st, we were hoping regrant cert in 5th circuit to create political cover for settlement but that didn't happen, so if seila law comes down and calabria removable at pleasure of potus then we have to see if scotus takes 5th circuit at that point, all of these cases are catalyst for settlement: atlas, selia, etc. lot of noise and suspense, so we do think they are catalysts to start getting sides to talk settlement.  if unconstitutional and retroactive, that possibility is a stretch but would be big.

 

-Will we need a settlement to raise capital?

Yes. First thing Houlihan told them, and second is we need to relist on NYSE.

 

-Go on NYSE before re-ipo?

Yes. good public policy, more capital in market, certain investors can't buy pink sheets, encourage retail to get in, broader policy reasons.

 

-Will current common be wiped out?

Aligned with gov't when own common have 79.9%, cleanest way to do this isn't wiping but deem senior pref paid back, don't see common completely wiped out.

 

-Incenvtives for plaintiffs to settle below par to get things moving quicker? 

We have no clients that are litigants but friends are litigants, depending on terms and conditions they might take discount but don't know.

 

-Why worry about political cover when have 11,000 docs?

Govt been on losing end of document production. prez privilege request exceds fast and furious southern border, lamberth ordered UST to turn over 11,000 docs and they pushed back but lamberth ordered them to do it saying your signature is on 3rd amendment you will turn them over.  gov't on losing end, wheels grind slowly and it's expensive but we have a public policy reason now to settle, country has lots of needs, ensuring stable housing without drawing on govt is excellent reason to settle.

 

-Do you see junior prefs riding common appreciation after conversion? 

Yes, incentivize to convert is you get to ride as common goes up with earnings and upside.

 

-Calabria visited banks on ipo a year ago, has appetite for offering changed at all?

No, other work to be done, calabria meeting investment bankers, he is a phd economist but not financial background, said largest ipo in history maybe yes maybe no, right offering as part of conversion maybe, that's down the road, more an education process first which is where we are, getting there and convinction is unaltered and need to do it is now completely evident to all policy makers.

UST and FHFA reasons to waste time why not cancel pspa right now?  Just put milbank in and houlihan just started, using both political cover of outside firm helping and fresh eyes, want to do it right and only once, don't feel rushed to do it today, calabria said do it in fall as originally planned when hit statutory capital at fannie, that timing may change now, don't think UST detractors would spend more than 5 minutes on it, that's the work milbank and houliahn are thinking about right away, not that it will happen but should it need to they have the work done.

Ginnie has extended line of credit to servicers for loans it guarantees, fed and ust team looking at it but want to see how mgmt puts it together.

 

-Timeline for relisting? 

Fall, not a difficult thing to do, politically irritant to opponents for example the letter sent by Warner and senators to half of govt complaining about danger to servicers, classic tactic of other team to send letter to hill then senators sign it, so there can be a reaction for every action, relist doesn't need to be done now, but hopefully before end of year.

 

[Wiggins]

Thanks Luke. great notes