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


twacowfca

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His wife impress me more  ;)

 

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Fiancee... has been married twice previously.  Not a stand-up guy when it comes to family values, but he is spot-on when it comes to what is needed as Secretary of the Treasury and finance as a whole.  Much like Trump in that regard.

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So he just said he didn't imply "recap and release" based on his previous comments. Also said didn't explicitly commit to bypass or not bypass Congress, but said he wants bipartisan support. Murky comments..

 

I believe he said he didn't "commit" to that - I wouldn't read too much into that comment, he has to be shrewd given the situation.

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I thought he was very shrewd with his comments and purposefully murky. Warner tried to get him to pledge not to go with administrative action.  He didn't bite but said he wants bipartisan support and seemed to express that the current system doesn't work.

 

 

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I thought he was very shrewd with his comments and purposefully murky. Warner tried to get him to pledge not to go with administrative action.  He didn't bite but said he wants bipartisan support and seemed to express that the current system doesnt work.

 

Kind of agree, but could be psychological bias impacting what he was actually saying

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MR. MNUCHIN MR. MNUCHIN: “”LET ME BE CLEAR THAT I DID MAKE COMMENTS ABOUT THIS. MY COMMENTS WERE NEVER THAT THERE SHOULD BE RECAP AND RELEASE. I HAVE BEEN AROUND THE MORTGAGE INDUSTRY FOR 30 YEARS AND I HAVE SEEN THIS FOR A LONG PERIOD OF TIME. THIS IS AN AREA I BELIEVE I HAVE EXPERTISE IN. FOR VERY LONG PERIODS OF TIME I THINK FANNIE AND FREDDIE HAVE BEEN WELL RUN WITHOUT CREATING RISK TO THE GOVERNMENT AND THEY PLAYED AN IMPORTANT ROLEND THE MORTGAGE INDUSTRY FOR 30 YEARS AND I HAVE SEEN THIS FOR A LONG PERIOD OF TIME. THIS IS AN AREA I BELIEVE I HAVE EXPERTISE IN. FOR VERY LONG PERIODS OF TIME I THINK FANNIE AND FREDDIE HAVE BEEN WELL RUN WITHOUT CREATING RISK TO THE GOVERNMENT AND THEY PLAYED AN IMPORTANT ROLE — I KNOW YOU ARE RUNNING OUT

 

Difficult to process this. Never that there should be recap and release, yet they are safe and serve a vital purpose. Also, elusive on agreeing to act only through congress.

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MR. MNUCHIN MR. MNUCHIN: “”LET ME BE CLEAR THAT I DID MAKE COMMENTS ABOUT THIS. MY COMMENTS WERE NEVER THAT THERE SHOULD BE RECAP AND RELEASE. I HAVE BEEN AROUND THE MORTGAGE INDUSTRY FOR 30 YEARS AND I HAVE SEEN THIS FOR A LONG PERIOD OF TIME. THIS IS AN AREA I BELIEVE I HAVE EXPERTISE IN. FOR VERY LONG PERIODS OF TIME I THINK FANNIE AND FREDDIE HAVE BEEN WELL RUN WITHOUT CREATING RISK TO THE GOVERNMENT AND THEY PLAYED AN IMPORTANT ROLEND THE MORTGAGE INDUSTRY FOR 30 YEARS AND I HAVE SEEN THIS FOR A LONG PERIOD OF TIME. THIS IS AN AREA I BELIEVE I HAVE EXPERTISE IN. FOR VERY LONG PERIODS OF TIME I THINK FANNIE AND FREDDIE HAVE BEEN WELL RUN WITHOUT CREATING RISK TO THE GOVERNMENT AND THEY PLAYED AN IMPORTANT ROLE — I KNOW YOU ARE RUNNING OUT

 

Difficult to process this. Never recap and release, yet they are safe and serve a vital purpose. Also, elusive on agreeing to act only through congress.

 

Reads to me like he's keeping his options open instead of committing to a specific course of action.

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Looks like a big non-answer to me.  Watching it live, and re-reading his comments here, I think he wanted to clarify that he didn't commit to anything.  Our first assumptions on what Mnuchin would do are probably still appropriate.  The Gov. stole from GSE investors and didn't honor their agreements.  I believe Mr. Mnuchin can see this and will honor it.

 

"It is my objective to find a bipartisan solution"  It's his objective, but the odds of this happening might be low and possibly the only way forward will be to use his power as Treasury Secretary to repair the problems Treasury caused with the GSEs.

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Here's my quick transcript. This is not 100% percent correct and may have some typos or errors, or unintentional omissions.

 

 

SENATOR WARNER: one area that I’ve had a huge amount of concern and interest in and Senator Crapo and a number of us on this panel is on Fannie and Freddie. I know there are some people that potentially interpreted some of your comments as recap and release, which would in essence say even though the american tax payer was  paid 188 billion dollar back that was invested in those failing institution, both of us would say with our business experience say that it was high risk capital and we ought to get a better return, those that would say let’s refloat these two entities and ignore some of those challenges. Do you support that position of recap and release that some have advocated?

 

MNUCHIN: Let me first be clear. I did make some comments about this my comments were never that there should be recap and release. What My comments were… and first of all I’ve been around the mortgage industry for 30 years. I’ve seen this for a long period of time so This is an area i do believe i have expertise in. For very long periods of time I think that Fannie and Freddie have been well run without creating risk to the government as well as they’ve play an important role —interrupted for discussion about time that part cut— I believe these are very important entities to provide the necessary liquidity for housing finance. And what I’ve committed to is that I’ll work with both the democrat and republicans. What I’ve said and I believe We need housing reform. So We should not just leave Fannie and Freddie as is for the next 4 years under government control without a fix. I believe that we can find a bipartisan ..uh.. fix for these, so that on the one hand we don’t end up with a giant bailout on the other hand we don’t the risk of completely limiting housing finance.

 

WARNER: I appreciate those comments I look forward to working with you. I have two quick questions. In light of those comments do you commit not to support any kind of administrative effort that would bypass the congress. In terms of efforts to recap and release

 

MNUCHIN: I don’t want to make any commitments legislative or not, what I will commit to, it is my responsibility in the Treasury as ..uhh ya know.. it relates to fannie and freddie, it is my objective to find a bipartisan solution to it and I would welcome the opportunity to sit down with you.

 

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Here's my quick transcript. This is not 100% percent correct and may have some typos or errors, or unintentional omissions.

 

 

SENATOR WARNER: one area that I’ve had a huge amount of concern and interest in and Senator Crapo and a number of us on this panel is on Fannie and Freddie. I know there are some people that potentially interpreted some of your comments as recap and release, which would in essence say even though the american tax payer was  paid 188 billion dollar back that was invested in those failing institution, both of us would say with our business experience say that it was high risk capital and we ought to get a better return, those that would say let’s refloat these two entities and ignore some of those challenges. Do you support that position of recap and release that some have advocated?

 

MNUCHIN: Let me first be clear. I did make some comments about this my comments were never that there should be recap and release. What My comments were… and first of all I’ve been around the mortgage industry for 30 years. I’ve seen this for a long period of time so This is an area i do believe i have expertise in. For very long periods of time I think that Fannie and Freddie have been well run without creating risk to the government as well as they’ve play an important role —interrupted for discussion about time that part cut— I believe these are very important entities to provide the necessary liquidity for housing finance. And what I’ve committed to is that I’ll work with both the democrat and republicans. What I’ve said and I believe We need housing reform. So We should not just leave Fannie and Freddie as is for the next 4 years under government control without a fix. I believe that we can find a bipartisan ..uh.. fix for these, so that on the one hand we don’t end up with a giant bailout on the other hand we don’t the risk of completely limiting housing finance.

 

WARNER: I appreciate those comments I look forward to working with you. I have two quick questions. In light of those comments do you commit not to support any kind of administrative effort that would bypass the congress. In terms of efforts to recap and release

 

MNUCHIN: I don’t want to make any commitments legislative or not, what I will commit to, it is my responsibility in the Treasury as ..uhh ya know.. it relates to fannie and freddie, it is my objective to find a bipartisan solution to it and I would welcome the opportunity to sit down with you.

 

under high pressure, that's as good as we can ask for today.

 

he never said he doesnt support r+r.  he said bipartisan solution, need action.  and he kept his option to bypass congress open.

 

sure there are some who were hoping for more, but in this situation, 'more' might not have been consistent with getting confirmed.

 

perhaps there will more more questions after the break in the 2nd round.

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Maybe there's a chance for additional clarity in round 2. Why would he say my comments were never that there should be recap and release? If you're not going to liquidate and they serve a vital role, well run, etc. what else is there besides R&R?

 

probably because that's what he was coached to say to maximize the chances of confirmation.  remember there's heat on him for allegedly pumping his investment in the paulson fund so he has to defend his nov30 comments to some degree.  he simply said he didn't comment on r+r, not that he doesn't support that.

 

those hoping for some big bullish commentary on GSEs today are too short term oriented, as the goal today is confirmation and many in congress don't like the companies  -- he has to thread the needle.

 

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http://finance.yahoo.com/news/former-fannie-mae-cfo-trumps-treasury-pick-can-get-fannie-out-of-government-control-reasonably-fast-180158855.html?soc_src=mail&soc_trk=ma

 

i think investors severely underestimate the political baggage of fannie mae. as mclean says, cold calculus of wall st doesnt work in washington. for anyone interested in understanding the politics of the gses, i highly recommend howard's book Mortgage Wars

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I picked up some shares FNMA a number of years ago and basically ignore it. A total gamble based on court cases so I don't spend two seconds following it beyond reading maybe two or three articles over the years. Since's its OTC I can't hold it in my registered accounts.

 

So, now, as a Canadian that can't buy this in my registered accounts and I can't buy US mutual funds, I'm just wondering if there's away for me to get an indirect/diluted exposure in FNMA and/or FMCC preferreds?  Are there any publicly traded US firms (closed ends or something) holding nice large positions - or Canadian mutual funds, etc.

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Maybe there's a chance for additional clarity in round 2. Why would he say my comments were never that there should be recap and release? If you're not going to liquidate and they serve a vital role, well run, etc. what else is there besides R&R?

 

probably because that's what he was coached to say to maximize the chances of confirmation.  remember there's heat on him for allegedly pumping his investment in the paulson fund so he has to defend his nov30 comments to some degree.  he simply said he didn't comment on r+r, not that he doesn't support that.

 

those hoping for some big bullish commentary on GSEs today are too short term oriented, as the goal today is confirmation and many in congress don't like the companies  -- he has to thread the needle.

 

You may be correct on threading the needle. The door is certainly open for Brown in this round.

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Guest cherzeca

these terms privatize and recap and release are jargon and dont have a precise meaning.

 

i think the smart thing to do was not to commit to not go administratively, and reiterate that he wants to proceed in a bipartisan manner. 

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