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

[TwoCitiesCapital]

15 hours ago, Mephistopheles said:

But what the govt wants in perpetuity is irrelevant to what Trump wants over the next 4 years.

 

 The amount they will get the gov't is largely insignificant relative to the types of deficits he ran and likely will run. This isn't going to be a priority for him I don't think. Just like it wasn't last time. 

 

15 hours ago, Mephistopheles said:

 

By now the companies have retained enough earnings (built enough capital) that it should be easier.

 

It's not really retained earnings - it's an increased liquidation preference to the government. It's asking them to give up even more money today, than 4-years ago, to let them go. Every year, the governments position becomes more entrenched with people asking the government to give up more and more of what it owns in favor of common/preferred shareholders. What incentive does the government have to do that? 

 

 

15 hours ago, Mephistopheles said:

But the first time, all the incentives were there: John Paulson, Steve Mnuchin, Calabria…and somehow it wasn’t done.

 

Is it the bank lobby that stopped it?

 

 

I think you're making this harder than what it is. It didn't get done because the gov't doesn't want it done. Why should the government do anything/give up anything. They already beneficially own 100% of the enterprises capital/profits into perpetuity without having to put in another cent, do any hard work, put it on the government's liabilities, or giving anything up to new shareholders. 

 

At any point, the Treasury could have forfeited the lawsuits. They didn't. They continued to fight them. Trump was just fine pillaging them for 4-years like Obama had done in years prior. All he changed at the end of his term was a new agreement that hamstrung Biden from being able to use the cash. 

 

It was political vindictiveness. Not b/c he wanted a fix for shareholders. 

Edited February 2 by TwoCitiesCapital

[This2ShallPass]

17 hours ago, sleepydragon said:

thinks if commons is wiped out, treasury will have a harder time to moneylize any of its 100% because there’s no natural shareholder base (wiped out) and they have to find new shareholders (who will be reluctant)

This happens all the time in bankruptcy. Given how big the GSEs are I'm sure finding new shareholders is not hard. But I like Ackman vocally pushing the case, govt doesn't act purely with financial gain in mind so maybe he can make them take this deal:)

 

@TwoCitiesCapital so you're arguing that they won't come out of conservatorship. It seems like there's consensus that it needs to end. Also, if the pause on net worth sweep was just to spite Biden, are they going to undo it now? if the new treasury secretary can undo it, don't you think Biden would have done it in the last 4 years? 

[TwoCitiesCapital]

2 hours ago, This2ShallPass said:

This happens all the time in bankruptcy. Given how big the GSEs are I'm sure finding new shareholders is not hard. But I like Ackman vocally pushing the case, govt doesn't act purely with financial gain in mind so maybe he can make them take this deal:)

+1 

 

2 hours ago, This2ShallPass said:

 

@TwoCitiesCapital so you're arguing that they won't come out of conservatorship. It seems like there's consensus that it needs to end.

 

My base case is the status quo will continue. Is why I have been selling shares this entire run-up. 

 

2 hours ago, This2ShallPass said:

 

Also, if the pause on net worth sweep was just to spite Biden, are they going to undo it now? if the new treasury secretary can undo it, don't you think Biden would have done it in the last 4 years? 

 

It's possible we get a other amendment to change the current arrangement, but I do not believe it's a priority for Trump. I expect a whole lot of nothing to happen. 

[COBFInfinity]

Trump signed an executive order to create a sovereign wealth fund. I have no idea if POTUS can do that without Congress, but in any case I can't help but hear Bessent say this and not think the GSEs are at least in consideration here.

 

"We're going to monetize the asset side of the U.S. balance sheet for the American people," Bessent said. "There'll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people."

[Iriminage]

6 hours ago, COBFInfinity said:

Trump signed an executive order to create a sovereign wealth fund. I have no idea if POTUS can do that without Congress, but in any case I can't help but hear Bessent say this and not think the GSEs are at least in consideration here.

 

"We're going to monetize the asset side of the U.S. balance sheet for the American people," Bessent said. "There'll be a combination of liquid assets, assets that we have in this country as we work to bring them out for the American people."

i haven’t posted in, oh, 6(?) years, but wanted to check in here RE: musk activities within treasury over the weekend.  
 

Musk’s team of 6 zoomer software engineers, all under age 26, spent some quality time over the weekend accessing, exploring, installing hard drives, downloading, uploading, playing solitaire, at both OPM, and Treasury

 

https://slate.com/news-and-politics/2025/02/elon-musk-us-aid-social-security-data-heist-trump.html

[james22]

1 hour ago, Iriminage said:

Musk’s team of 6 zoomer software engineers, all under age 26, spent some quality time over the weekend accessing, exploring, installing hard drives, downloading, uploading, playing solitaire, at both OPM, and Treasury

 

https://slate.com/news-and-politics/2025/02/elon-musk-us-aid-social-security-data-heist-trump.html

 

Those of us within the ranks of the federal workforce looked on in horror at all of this. 

 

Those of us without look on with glee.

 

Trump is doing what he was popularly elected to do.

[Iriminage]

So this is evidence that us little guys are invited to the table with Elon, Paulson, and Ackman?  One is remunerated, the other bought off, and all remaining plaintiffs are settled directly with a phone call and a bank transfer, screw the lawyers.  Any and all of these hypothetical transfers could have happened Monday morning.  Some 19 year old kid, working for free, could have clicked confirm on a $10 billion transfer to Paulson.  
 

No i don’t mean it’s physically possible that he could hack in from his mom’s basement, or lift a badge from someone at Starbucks and sneak in at lunch.  Dude was already, factually, in the building.  
 

Does that pass every sniff test for you?

 

Many of us entered the gse saga with a reasonable premise, expecting reasonable treatment which never came.

 

But it will totally work this time, because the powers that be are dedicated to a deliberate, unbiased interpretation and execution of Law?  That’s my question.  

[james22]

2 hours ago, Iriminage said:

That’s my question.  

 

Why rant about it?

 

You know the answer: if you can't trust the actors, you shouldn't invest.

 

No one is going to talk you into it.

 

Move on.

[Grenville]

I think it's a fair observation...no reason to bully the person off the thread. 

[james22]

40 minutes ago, Grenville said:

I think it's a fair observation...no reason to bully the person off the thread. 

 

It's political. Better than a ban.

[Mephistopheles]

https://www.wsj.com/finance/regulation/new-hud-chief-sets-sights-on-fannie-freddie-cost-cutting-and-new-name-2e83652f?st=AFdYXU&reflink=article_copyURL_share
 

Here we go!

[Mephistopheles]

I made a Truth Social account to pump Fannie Mae. Yall should get in on this.

 

Turn it into a meme stock among the MAGA folk.

[Ulti]

https://www.bizjournals.com/atlanta/news/2025/02/13/fannie-mae-freddie-mac-privatization-impact-rates.html?cx_testId=40&cx_testVariant=cx_3&cx_artPos=7#cxrecs_s