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

[waynepolsonAtoZ]

Here is the language for FMCKJ

 

(ii) The consent of the holders of at least 66 2/3% of all of the shares of the NonCumulative

Preferred Stock at the time outstanding, given in person or by proxy, either in

writing or by a vote at a meeting called for the purpose at which the holders of shares of the

Non-Cumulative Preferred Stock shall vote together as a class, shall be necessary for

authorizing, eÅecting or validating the amendment, alteration, supplementation or repeal of the

provisions of this CertiÑcate if such amendment, alteration, supplementation or repeal would

materially and adversely aÅect the powers, preferences, rights, privileges, qualiÑcations,

limitations, restrictions, terms or conditions of the Non-Cumulative Preferred Stock. The

creation and issuance of any other class or series of stock, or the issuance of additional shares of

any existing class or series of stock of Freddie Mac (including the Non-Cumulative Preferred

Stock), whether ranking prior to, on a parity with or junior to the Non-Cumulative Preferred

Stock, shall not be deemed to constitute such an amendment, alteration, supplementation or

repeal.

[Seahug]

Its in the language for the warrants - 79.9% after any capital raising,  dilution etc.

 

Technically possible is all i am saying

 

 

[Flynnstone5]

I read this recent comment from Tim Howard in response to a particular proposal. There seems to be a lot more talk lately regarding congressional approval. Isn't it clear that Trump/Mnuchin don't need any congressional approval to implement a plan for recap and release or am I mistaken on this? Also, given the Republican control of Congress, is it really that likely that his own party would oppose him so early in a new administration? This doesn't make sense to me. They are going to want to be united and get as much accomplished as possible within the first two years IMHO.

 

 

    jtimothyhoward

    December 29, 2016 at 12:07 pm

 

    I think most of the elements identified in this plan could be useful as components of a negotiated settlement between the government and the plaintiffs. But I also think your plan would greatly benefit from having an identified objective (for which this plan is, in your opinion, the best way to achieve it).

 

    Many proposals I’ve seen have the implied objective of maximizing the values or prices of Fannie and Freddie’s preferred and common stock (which is why they all include cancelling the warrants). I understand why the companies’ current shareholders might have this objective, but that won’t be enough. If Fannie and Freddie are to be released from conservatorship and restored as private companies, the Trump administration will need to have a reason to make it happen, and Congress at a minimum will need to accept that plan, and not seek to counter it with legislation.

 

    I still do not know what the Mnuchin Treasury will set as its objectives for settlement talks with plaintiffs. I’m hopeful it will realize that releasing and recapitalizing Fannie and Freddie is the best alternative for ending the eight-year impasse on mortgage reform, but I can’t rule out the possibility that it might decide to settle the lawsuits as cheaply as possible, then throw its support behind the forces in Congress that want to liquidate Fannie and Freddie and replace them with some mechanism more to the liking of the large banks and Wall Street interests.

 

    If the latter choice is made, your plan obviously is dead. But even if the former is made, I believe your plan would need to be tweaked in some ways to give the Trump administration (and Congress) some reasons to go along with it (other than that it’s the right thing to for consumers, which unfortunately in politics seldom is enough).

[investorG]

I read this recent comment from Tim Howard in response to a particular proposal. There seems to be a lot more talk lately regarding congressional approval. Isn't it clear that Trump/Mnuchin don't need any congressional approval to implement a plan for recap and release or am I mistaken on this? Also, given the Republican control of Congress, is it really that likely that his own party would oppose him so early in a new administration? This doesn't make sense to me. They are going to want to be united and get as much accomplished as possible within the first two years IMHO.

 

 

if an investor's goal is stopping the NWS and perhaps a 4th amendment, then the executive office might be sufficient. 

 

however if you're looking for the full winner of recap / release / relist / warrants altered, etc,  it's likely that either the courts or congress are also needed.    the courts can provide the tailwind / cover for a bolder plan.  or congress can act altering HERA (which prevents future abuses by a new Tsy / FHFA) and validating the presidential plan.

 

hopefully this is why Trump has courted corker and hensarling, and one of the reasons why he picked mulvaney.

 

also, on this particular subject, i'd think mr howard's guess is as good as yours.

 

finally, it also matters what trump's true intentions are and also what's in the documents, if they are indeed permissible.

[Flynnstone5]

Question for the attorney's here. If the writ of mandamus is denied prior to inauguration, how likely do you think it is that an en banc or whatever tactic available is actually pursued given the time frame? And, if it were filed with only 1-3 weeks left before a new DOJ, how easy would it be for the new admin. to drop or stop the process?

[Guest cherzeca]

Question for the attorney's here. If the writ of mandamus is denied prior to inauguration, how likely do you think it is that an en banc or whatever tactic available is actually pursued given the time frame? And, if it were filed with only 1-3 weeks left before a new DOJ, how easy would it be for the new admin. to drop or stop the process?

 

this is not a situation i recall happening before

[orthopa]

Mnunchin declines to write back to Brown.

 

https://www.bloomberg.com/news/articles/2017-01-03/treasury-nominee-mnuchin-declines-to-answer-senator-s-questions-ixhzyate

[orthopa]

Looks like the democrats are going to try hard to paint Mnunchin with shit.

 

https://theintercept.com/2017/01/03/treasury-nominee-steve-mnuchins-bank-accused-of-widespread-misconduct-in-leaked-memo/

[Guest cherzeca]

Looks like the democrats are going to try hard to paint Mnunchin with shit.

 

https://theintercept.com/2017/01/03/treasury-nominee-steve-mnuchins-bank-accused-of-widespread-misconduct-in-leaked-memo/

 

seems to me now senator kamala harris has more to answer about these allegations than mnuchin

[PLynchJr]

Tim Howard's latest blog post...

 

https://howardonmortgagefinance.com/2017/01/04/economics-trumping-politics/

[investorG]

Looks like the democrats are going to try hard to paint Mnunchin with shit.

 

https://theintercept.com/2017/01/03/treasury-nominee-steve-mnuchins-bank-accused-of-widespread-misconduct-in-leaked-memo/

 

like most others, i have some level of concern about the confirmation process in terms of any potential new news dropping.  but fortunately there's now multiple people in the proposed admin that appear more interested in justice and the US economy than the special interests.

[investorG]

liquid preferreds now cheap vs commons on the 2:1 ratio, fwiw.

 

likely some unwind of short common hedges put on in 4q 2016, and also potentially some tax-related overhang from high net worth individuals waiting for the lower expected tax rates to sell.

[SnarkyPuppy]

Does anyone have any insight as to when the Mnuchin confirmation hearings are likely to occur? 

[Flynnstone5]

Does anyone have any insight as to when the Mnuchin confirmation hearings are likely to occur?

 

Could be as early as next Friday or following week. Here's a link to check: https://www.senate.gov/committees/committee_hearings.htm

[SnarkyPuppy]

Does anyone have any insight as to when the Mnuchin confirmation hearings are likely to occur?

 

Could be as early as next Friday or following week. Here's a link to check: https://www.senate.gov/committees/committee_hearings.htm

 

Thank you!

[Flynnstone5]

Isn't the U.S. Senate Committee on Banking, Housing and Urban Affairs the one that will conduct Mnuchins confirmation hearing? If so, it appears many of the current members are not pro FnF.

 

http://www.banking.senate.gov/public/index.cfm/membership

 

I count at least 8 that supported Corker-Warner or Johnson-Crapo. Has anyone else looked at this?

[investorG]

Isn't the U.S. Senate Committee on Banking, Housing and Urban Affairs the one that will conduct Mnuchins confirmation hearing? If so, it appears many of the current members are not pro FnF.

 

http://www.banking.senate.gov/public/index.cfm/membership

 

I count at least 8 that supported Corker-Warner or Johnson-Crapo. Has anyone else looked at this?

 

finance.

 

on a separate note, the amount of propaganda currently out against the GSEs is stunning.  hopefully it's because the special interests are worried.   

[Guest cherzeca]

i think mnuchin has no problem provided he has spoken privately to corker/crapo etc and has reached some sort of accommodation with them

[Mephistopheles]

i think mnuchin has no problem provided he has spoken privately to corker/crapo etc and has reached some sort of accommodation with them

 

If Corker/Crapo and the anti-GSE Senators vote YES to confirm Mnuchin, then I may go 100% long (assuming the shares don't jump too much), because that would be a clear indicator that they're giving this one up, not that it's their choice to begin with. But at that point, the only entities that can stop us are the Courts - assuming they throw the cases out before Mnuchin can inform the judges that he wants to settle, and Mel Watt (lol).

[orthopa]

i think mnuchin has no problem provided he has spoken privately to corker/crapo etc and has reached some sort of accommodation with them

 

If Corker/Crapo and the anti-GSE Senators vote YES to confirm Mnuchin, then I may go 100% long (assuming the shares don't jump too much), because that would be a clear indicator that they're giving this one up, not that it's their choice to begin with. But at that point, the only entities that can stop us are the Courts - assuming they throw the cases out before Mnuchin can inform the judges that he wants to settle, and Mel Watt (lol).

 

Agree, I would increase my exposure significantly also, likely mostly in preferred.

[investorG]

i think mnuchin has no problem provided he has spoken privately to corker/crapo etc and has reached some sort of accommodation with them

 

hopefully mnuchin clears the hurdles.

 

importantly, though, it's not just him on the proposed team;  some times lost in the shuffle on mnuchin's fox news comments was that wilbur ross is the one who brought up the GSEs (unsolicited) in the first place.

 

also icahn, mulvaney, ken blackwell, ben carson.

[merkhet]

I would urge a bit of caution. Recall that while Watt took his directions from Treasury during the current administration, there's nothing requiring him to do so in the next administration. If he is somehow forced out, however, then it's a different story.

[Flynnstone5]

i think mnuchin has no problem provided he has spoken privately to corker/crapo etc and has reached some sort of accommodation with them

 

If Corker/Crapo and the anti-GSE Senators vote YES to confirm Mnuchin, then I may go 100% long (assuming the shares don't jump too much), because that would be a clear indicator that they're giving this one up, not that it's their choice to begin with. But at that point, the only entities that can stop us are the Courts - assuming they throw the cases out before Mnuchin can inform the judges that he wants to settle, and Mel Watt (lol).

 

I'm not so sure that it means that much to have Corker/Crapo vote YES because they are not going to go against the admin. this early. Once confirmed they and every other anti-FnF person, entity, lobby, etc. are sure to continue to fight given $$$. For every piece of info. that I read that supports my bias, I just continue to ask myself what could potentially happen out of left field, i.e. Mnuchin meant something different than what everyone assumes when he said out of gov control, the admin stalls and keeps the NWS in place, Mnuchin/Trump pursue a Corker/Crapo or similar scenario, they restructure in a way that crushes shareholders, etc. I'm heavily invested in common/prf'd and am betting on favorable probability, but when I read other boards, articles, etc. that act as if this is a sure thing, it literally puts a pit in my stomach.

 

As aside here's the link to listen to confirmation hearings: http://www.capitolhearings.org/

[hardincap]

when I read other boards, articles, etc. that act as if this is a sure thing, it literally puts a pit in my stomach.

 

+1. boards are an echo chamber; people are wired to derive psychological comfort out of making bias confirming statements

 

we are still in highly speculative mode in terms of trying to understand what mnuchin/trump's intentions are.. some caution is in order

[Jurgis]

but when I read other boards, articles, etc. that act as if this is a sure thing, it literally puts a pit in my stomach.

 

This board mostly acts as if this is a sure thing too.  ::)