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

[orthopa]

4 hours ago, Mephistopheles said:

Playing devils advocate here. Does sovereign wealth fund necessarily mean privatization? They can just put the entities as they are, in conservatorship, into the fund and get all the cash flow to diversify into other assets. 

I was thinking about that as I typed earlier but what an encumbered asset that would be. There is a lawsuit with claims FnF have to pay as well as private and preferred shareholders to deal with. Not a bad thought but seems like a mess and would it cause another lawsuit?  Im not a lawyer so I dont know but that seems like a true nationalization, vs the quasi one now that has skated through the courts. 

 

Bessent has half(if not all all the power via Trump) to bring them out of conservatorship and one would think he brings the assets in unencumbered and liquid. Why go through all the trouble of creating a SWF to dump an illiquid asset with no direct claim to cash earnings now via PSPA vs immediate access with release. 

[TwoCitiesCapital]

1 hour ago, orthopa said:

I was thinking about that as I typed earlier but what an encumbered asset that would be. There is a lawsuit with claims FnF have to pay as well as private and preferred shareholders to deal with. Not a bad thought but seems like a mess and would it cause another lawsuit?  Im not a lawyer so I dont know but that seems like a true nationalization, vs the quasi one now that has skated through the courts. 

 

Bessent has half(if not all all the power via Trump) to bring them out of conservatorship and one would think he brings the assets in unencumbered and liquid. Why go through all the trouble of creating a SWF to dump an illiquid asset with no direct claim to cash earnings now via PSPA vs immediate access with release. 

 

Who cares if it causes another lawsuit? That is the next administration's problem. This administration would get to spend the cash flow or take credit for having produced it. 

 

And what about this administrations approach to anything this time, or last time, suggests that they care about lawsuits/rule of law/doing things by the book/etc.?

Edited March 19, 2025 by TwoCitiesCapital

[sholland]

SCOTUS has said that government can do whatever it wants with Fannie and Freddie.  I don’t see any reason that the government can’t reinstate the Net Worth Sweep. My investment (speculation) is placing heavy dependence on Trump’s letter in which he indicates that he wouldn’t “…steal the retirement savings from hardworking Americans who had invested in Fannie Mae and Freddie Mac.”

[ValueMaven]

https://www.wsj.com/finance/regulation/trumps-new-chief-embarks-on-shake-up-at-mortgage-giants-fannie-mae-and-freddie-mac-1ccc0e29?mod=hp_lead_pos4

 

[TwoCitiesCapital]

https://www.bloomberg.com/news/articles/2025-05-21/trump-considers-taking-freddie-mac-fannie-mae-public

 

The man who will look you in the eye and lie about Mexico paying for the wall or that China will pay for the tariffs' has strangely guarded and conservative language of "seriously considering" taking these companies public

 

Lol. I guess he didn't 'consider' it seriously enough 5 years ago. 

Edited May 21, 2025 by TwoCitiesCapital

[DooDiligence]

https://truthsocial.com/@realDonaldTrump/posts/114548257487682819

 

[sleepydragon]

I had a fairly big position on this— too bad i just sold all a little over a month ago. Urg! Always like this.

[fareastwarriors]

The first post of this thread was on January 15, 2011

 

 

 

[sleepydragon]

Commons are up 46% pre mkt

[Gregmal]

Ain’t it funny how the only thing working for Trump haters are pro Trump policy things? Tough pill to swallow I’m sure 

[TwoCitiesCapital]

Both common and preferred are already fading the news and down bigly from the opening/pre-market values. 

 

We'll see if he actually does anything this time around or if this was just a bone for his administration to trade around. 

 

The only thing I'm really certain of here is that Don Jr probably bought a shit ton before the announcement. 

Edited May 22, 2025 by TwoCitiesCapital

[TwoCitiesCapital]

4 hours ago, Gregmal said:

Ain’t it funny how the only thing working for Trump haters are pro Trump policy things? Tough pill to swallow I’m sure 

 

Yup, the only things working are Trump's doing...

 

Someone should call Fairfax and let them know.

And the CEO of gold.

And the CEOs of BABA and Tencent.
 

No one tell the CEO of Trump Media and Technology though - they missed the memo.. 

 

The outperformance of most foreign markets vs the US? All DJT. 

 

 

 

Edited May 22, 2025 by TwoCitiesCapital

[Gregmal]

8 minutes ago, TwoCitiesCapital said:

 

Yup, the only things working are Trump's doing...

 

Someone should call Fairfax and let them know.

And the CEO of gold.

And the CEOs of BABA and Tencent.
 

No one tell the CEO of Trump Media and Technology though - they missed the memo.. 

 

The outperformance of most foreign markets vs the US? All DJT. 

 

 

 

It was a joke, don’t be so butthurt.

Isn’t there another recession around the corner?

[Gregmal]

3 hours ago, TwoCitiesCapital said:

Both common and preferred are already fading the news and down bigly from the opening/pre-market values. 

FNMA +15% since this. Sour grapes I guess. 

[TwoCitiesCapital]

8 hours ago, Gregmal said:

It was a joke, don’t be so butthurt.

Isn’t there another recession around the corner?

 

Super funny. 

 

For as much as you go on about accountability, I thought you'd enjoy someone holding you accountable to the truth. Accountability for media, insurance companies, fund managers, and government...but not for Greg. Got it.

 

On 2/9/2024 at 2:54 PM, Gregmal said:

Except the “short sellers” of this ilk scream fraud 100 times and might get a small handful, and even out of the small handful the material nature of which? Even less. 

 

Zero accountability. Although I doubt it even matters because this is also somebody who openly admits he trades against his own noise, often the same day or days around his public campaigns.

 

On 3/13/2025 at 3:37 PM, Gregmal said:

I also think some of the chainsaw to government is simply karma. I mean really, how many times in our lives have we heard those dipshit friends of ours whom have government jobs make jokes about job security? The reason there’s such job security, or at least has been, is because there’s no accountability. Only place on earth where that’s not only allowed, but the benchmark.

 

On 3/14/2025 at 10:39 AM, Gregmal said:

It’s kinda crazy to me how people still don’t get it. Majority of people whom presumably voted for Trump do not care about these things you guys keep “ah ha!”-ing to. What they voted for was a result of behaviors; they detest and abhor elitists lecturing them about morality, “haves” prospering with little effort while telling them how they’re doing it wrong, stock market guys like Fink doing social experiments with their livelihoods, politicians and government employees cruise controlling it with no accountability; 

 

On 3/26/2025 at 12:25 PM, Gregmal said:

I would love for full scale accountability in government. I’m all for it. Sadly for some, that means saving their pout parties and disdain for the system for only certain “security breaches” but not others. Keeping calm and quiet and saving their patriotic protests not for when troops die because of neglect and incompetency, but when improper text messages get sent; seeing the perils of “recovered” drug addicts in and around the government, but of course remaining cool as a cucumber when the coke is found….yea…

 

On 3/26/2025 at 10:48 AM, Gregmal said:

I said someone should be accountable. 
 

I also think we need consistency on policy. If media is enemy of the people, this Atlantic guy is enemy number 1 or 2. So they inadvertently emailed sensitive dialogue to the enemy. 

 

 

[Gregmal]

3 hours ago, TwoCitiesCapital said:

 

Super funny. 

 

For as much as you go on about accountability, I thought you'd enjoy someone holding you accountable to the truth. Accountability for media, insurance companies, fund managers, and government...but not for Greg. Got it.

 

 

 

 

 

 

 

Sheesh, no accountability for me cuz I made a joke! Got it. Clearly absolutely nothing in the market works but the stuff Trump blessed….

 

More macro though, I do think this is exhibit A on the dangers of Trump Derangement Syndrome. You were in these for what? A decade? With largely nothing to show for it(save the I made 700% day trading dips and rips stuff). You knew the thesis well. All the stars align, right down to Trump himself having an entirely different control position this time around to get things done…and you sell on Orange Man Bad fever and then besmirch those whom are still long, continuously, while you continue to be demonstrably wrong, even down to “this hugely volatile pink sheeter started the day up 30% but see it already retraced 10%”! 
 

Whatever man.

[Sweet]

I would love to own the companies when they are released, provided they aren’t priced stupidly.  I have owned these on and off over the years, but swore I wouldn’t touch them again until they were finally public.  I think share price is getting ahead of itself.  The government could just wipe the entire slate clean here if it wants. 
 

Edited May 23, 2025 by Sweet

[TwoCitiesCapital]

7 hours ago, Gregmal said:

More macro though, I do think this is exhibit A on the dangers of Trump Derangement Syndrome. You were in these for what? A decade? With largely nothing to show for it.

You knew the thesis well. All the stars align, right down to Trump himself having an entirely different control position this time around to get things done…and you sell on Orange Man Bad fever

 

I sold 25% of my position, all acquired in 2021-2022 for $4/share or less not on "Orange man bad syndrome" but because I don't believe Orange Man is any different, any more motivated, or any more capable this time around and they had popped 300-400%. 

 

I've got other limit orders waiting for people to grow even more comfortable that Trump is their friend. You're welcome to buy them. 

 

7 hours ago, Gregmal said:

 

and then besmirch those whom are still long, continuously, while you continue to be demonstrably wrong,

 

They're still in conservatorship. Every penny they make still goes to the government's liquidation preference. All you have is a tweet saying he's considering doing something different because the first 4-years and the 4-years since weren't enough time to consider? . It isn't me that is demonstrably wrong....

 

7 hours ago, Gregmal said:

 

even down to “this hugely volatile pink sheeter started the day up 30% but see it already retraced 10%”! 
 

Whatever man.

 

Was just pointing out that the market appeared to be selling the news. Is down again this AM

Edited May 23, 2025 by TwoCitiesCapital

[sleepydragon]

This is the first time someone in the new administration (the prez) clearly said there will be privatation. Before it was all hope and speculation. Now we know for sure they want to do it. I think this is still be underreacted by the mkt, especially the preferred 

[COBFInfinity]

3 hours ago, sleepydragon said:

This is the first time someone in the new administration (the prez) clearly said there will be privatation. Before it was all hope and speculation. Now we know for sure they want to do it. I think this is still be underreacted by the mkt, especially the preferred 

 

Given the remaining possibility that the Trump admin will fumble this or get scared and punt again, causing JPS to fall 70+%, the JPS might be appropriately priced. What baffles me is that common shares are being priced using Ackman's assumption that a bunch of SPS liquidation preference will just be forgiven. Maybe the big time PMs that actually get to talk to people inside the administration know things I don't, but that still seems like a wild risk to take, particularly relative to JPS pricing.

[james22]

 

[Sweet]

On 5/23/2025 at 5:26 PM, sleepydragon said:

This is the first time someone in the new administration (the prez) clearly said there will be privatation. Before it was all hope and speculation. Now we know for sure they want to do it. I think this is still be underreacted by the mkt, especially the preferred 

But he didn’t say.  He said he was seriously considering it.

[orthopa]

On 5/24/2025 at 12:54 PM, Sweet said:

But he didn’t say.  He said he was seriously considering it.

 

Well Bessent on Bloomberg said privatization is a goal for the admin and will come after the tax deals, peace deals, tariff deals. Trump says its a goal, Pulte says its up to Trump and Bessent says its a priority. Pulte is trying to make them more profitable. Maybe for jus the gov?  Maybe everyone is lying again. The lobby against this is crickets and everyone not on the inside has gone radio silence.  

 

They can lie to me for 3.5 more years. That being said Im borrowing to buy more preferred this week. With the 30 year 5% and the outstanding preferred at 6-8% divs I dont think its unreasonable to think instead of converting the preferred the divs or turned on. That being said we will see. 

 

 

[This2ShallPass]

1 hour ago, orthopa said:

 

Well Bessent on Bloomberg said privatization is a goal for the admin and will come after the tax deals, peace deals, tariff deals. Trump says its a goal, Pulte says its up to Trump and Bessent says its a priority. Pulte is trying to make them more profitable. Maybe for jus the gov?  Maybe everyone is lying again. The lobby against this is crickets and everyone not on the inside has gone radio silence.  

 

They can lie to me for 3.5 more years. That being said Im borrowing to buy more preferred this week. With the 30 year 5% and the outstanding preferred at 6-8% divs I dont think its unreasonable to think instead of converting the preferred the divs or turned on. That being said we will see. 

 

 

Bessent has been consistent on this topic. If you read his latest interview to what he said few months back, he says it's a priority but they're doing lot of studies. Reading between the lines, it doesn't seem he's as enthusiastic and his bigger focus is no impact on mortgage rates.

 

 

[sleepydragon]

7 minutes ago, This2ShallPass said:

Bessent has been consistent on this topic. If you read his latest interview to what he said few months back, he says it's a priority but they're doing lot of studies. Reading between the lines, it doesn't seem he's as enthusiastic and his bigger focus is no impact on mortgage rates.

 

 

 

There won't be much impact . I have seen a JPM research, where they have done a survey on their MBS funds clients - basically the result is as long as the implicit guarantee remains, the mortgage rate will go up 20 bps (or 40? to the best of my memory). There's only issue if govt says explicitly there will no guarantee.