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

[onyx1]

Does someone have easier access to pulling stock price data going back to 2008 for the GSEs? They had different tickers before delisting. It may be pretty easy to pull the data, but I thought I'd access for assistance if possible. I'm traveling the next few days.

 

I'm thinking about doing a simple version of an "event study" re FMCC, FMCKJ, FNMA, FNMAS.

 

So, using FMCKJ as an example:

 

1. Issued at redemption value.

 

2. What happened shortly after Paulson had his famous meeting with the investment banks.

 

3. What happened at September 7-8, 2008.

 

4. What happened upon delisting around the fourth of July 2010.

 

5. August 17, 2012.

 

6. September 30, 2014.

 

GSE investors got pounded by $xx billion around these various dates. GSE invrestors will be restored if Trump or the courts follow through. But its a recovery of value not a windfall profit.

 

I'll have to be more precise about specifying the "critical events" and "critical time periods" once I or someone else has pulled the data.

 

 

FNMA, FNMAS, FMCC, FMCKJ daily close prices since 2008, attached.

GSE_Daily_Close_Prices_2008-2016_-_Copy.xlsx

[waynepolsonAtoZ]

Thanks. I should have asked for volume data. Also, should have asked for data for the S&P500 and NYSE indexes (to show the drops were not market related).

 

Anyway, just really simply its easy to see what happened before and after Cship was announced, before and after delisting, before and after August 17, 2012, and before and after Judge Lamberth's order.  This isn't the whole story, but it may be indicative of what happened.

 

In this context, FMCKJ going back to redemption value shouldn't be viewed as an unjustified windfall for hedge funds, but rather a return to normality.

 

My data here is for FMCKJ (that's the one I follow most closely)

 

June 20, 2008 $24.63

 

Sept 5, 2008  $13.56

Sept 8, 2008  $2.87

 

June 15, 2010 $0.98

June 16, 2010 $0.70 delisting announced

July 16, 2010 $0.30 all-time low (I think big players probably had unloaded by then)

 

August 16, 2012 $2.83

August 17, 2012 $1.03 NWS announced

 

Sept 30, 2014 $10.30  Judge Lamberth's order announced (presumably after markets had closed for the day)

October 1, 2014  $4.34

 

Just a really simple (reduced form equation) analysis might be that FMCKJ was trading at $24.63 on June 20, 2008. 

Down $10.63 (24.25 percent) day cship was announced

Down $1.80 (x percent) day 3rd Amendment was announced

Down $5.96 (x percent) day Judge Lamberth's decision was announced

 

Going back to normal ($25 redemption value) should surprise no one given that Freddie Mac has recovered from the financial crisis (in terms of net income).

 

 

[onyx1]

Thanks. I should have asked for volume data. Also, should have asked for data for the S&P500 and NYSE indexes (to show the drops were not market related).

 

Anyway, just really simply its easy to see what happened before and after Cship was announced, before and after delisting, before and after August 17, 2012, and before and after Judge Lamberth's order.  This isn't the whole story, but it may be indicative of what happened.

 

In this context, FMCKJ going back to redemption value shouldn't be viewed as an unjustified windfall for hedge funds, but rather a return to normality.

 

My data here is for FMCKJ (that's the one I follow most closely)

 

June 20, 2008 $24.63

 

Sept 5, 2008  $13.56

Sept 8, 2008  $2.87

 

June 15, 2010 $0.98

June 16, 2010 $0.70 delisting announced

July 16, 2010 $0.30 all-time low (I think big players probably had unloaded by then)

 

August 16, 2012 $2.83

August 17, 2012 $1.03 NWS announced

 

Sept 30, 2014 $10.30  Judge Lamberth's order announced (presumably after markets had closed for the day)

October 1, 2014  $4.34

 

Just a really simple (reduced form equation) analysis might be that FMCKJ was trading at $24.63 on June 20, 2008. 

Down $10.63 (24.25 percent) day cship was announced

Down $1.80 (x percent) day 3rd Amendment was announced

Down $5.96 (x percent) day Judge Lamberth's decision was announced

 

Going back to normal ($25 redemption value) should surprise no one given that Freddie Mac has recovered from the financial crisis (in terms of net income).

 

 

FMCKJ vs s&p 500 with volume stats included, attached.

FMCKJ_vs_SP_500_-_Copy.xls

[HalfMeasure]

Interesting article from Bloomberg on the Senate confirmation hearings:

 

https://www.bloomberg.com/politics/articles/2017-01-09/nine-trump-nominees-who-ll-face-extreme-vetting-by-democrats

[onyx1]

Interesting article from Bloomberg on the Senate confirmation hearings:

 

https://www.bloomberg.com/politics/articles/2017-01-09/nine-trump-nominees-who-ll-face-extreme-vetting-by-democrats

 

 

Who is helping Jeff Sessions prepare for senate confirmation hearings? 

 

 

 

 

Yep, that Chuck Cooper.

[Mephistopheles]

Interesting article from Bloomberg on the Senate confirmation hearings:

 

https://www.bloomberg.com/politics/articles/2017-01-09/nine-trump-nominees-who-ll-face-extreme-vetting-by-democrats

 

 

Who is helping Jeff Sessions prepare for senate confirmation hearings? 

 

 

 

 

Yep, that Chuck Cooper.

 

cherzeca mentioned that the legal cases are on autopilot thanks to career attorneys at the DOJ. So now we know that we have connections with the potential head of the DOJ as well. Assuming Treasury doesn't take any notice, hopefully the DOJ does!

[Guest cherzeca]

Interesting article from Bloomberg on the Senate confirmation hearings:

 

https://www.bloomberg.com/politics/articles/2017-01-09/nine-trump-nominees-who-ll-face-extreme-vetting-by-democrats

 

 

Who is helping Jeff Sessions prepare for senate confirmation hearings? 

 

 

 

 

Yep, that Chuck Cooper.

 

cherzeca mentioned that the legal cases are on autopilot thanks to career attorneys at the DOJ. So now we know that we have connections with the potential head of the DOJ as well. Assuming Treasury doesn't take any notice, hopefully the DOJ does!

 

autopilot until 1/20...to be clear.

 

i am hopeful cooper might even prep mnuchin on the GSE prong of his confirmation

[rros]

Interesting article from Bloomberg on the Senate confirmation hearings:

 

https://www.bloomberg.com/politics/articles/2017-01-09/nine-trump-nominees-who-ll-face-extreme-vetting-by-democrats

 

 

Who is helping Jeff Sessions prepare for senate confirmation hearings? 

 

 

 

 

Yep, that Chuck Cooper.

 

cherzeca mentioned that the legal cases are on autopilot thanks to career attorneys at the DOJ. So now we know that we have connections with the potential head of the DOJ as well. Assuming Treasury doesn't take any notice, hopefully the DOJ does!

 

autopilot until 1/20...to be clear.

 

i am hopeful cooper might even prep mnuchin on the GSE prong of his confirmation

rule of law, baby.

[SnarkyPuppy]

https://www.bloomberg.com/news/articles/2017-01-10/breitbart-hires-wall-street-journal-vet-to-expand-its-audience

 

"In a bid to expand its influence in the era of Donald Trump, Breitbart News, the crusading populist-right website that was an early champion of the incoming president, has hired veteran financial journalist John Carney of The Wall Street Journal to lead a new finance and economics section set to launch soon after the Jan. 20th presidential inauguration"

[Flynnstone5]

Anyone have the full Politico article or comments from Hensarling, Recap the GSE's? "Not my preferred approach".

[orthopa]

Does anyone have a feel or know how much Mnunchin can do without congress? Corkers bill prevents FnF from leaving conservatorship before the end of 2017 without congress approval right? Outside of that Mnunchin can unilaterally stop sweep correct? Can he on his own cancel the warrants or change the conversion rate/price?

 

Thanks

[investorG]

large blocks traded in FNMAS and FMCKJ.

 

not sure what it means but it's the largest daily volume in the 2 most liquid preferreds since the mnuchin announcement aftermath.

 

[waynepolsonAtoZ]

"Can he on his own cancel the warrants or change the conversion rate/price?"

 

Treasury can exercise the Warrant to own 79.9% of the GSEs' common stock by paying $8,000 for each company. Treasury can exercise the Warrant anytime between now and September 2008.

 

However, they weren't satisfied with that and now get 100% of the total comp. income of the GSEs.

 

Treasury and FHFA can change those terms via a 4th Amendment, although not until January 1, 2018.

[SnarkyPuppy]

Semi interesting - dimon was asked directly about the GSEs.  Can anyone glean what he is implying here?

 

http://video.foxbusiness.com/v/5276683740001/?#sp=show-clips

[Flynnstone5]

Semi interesting - dimon was asked directly about the GSEs.  Can anyone glean what he is implying here?

 

http://video.foxbusiness.com/v/5276683740001/?#sp=show-clips

 

Who knows? He says "it's fixable" and "don't make it binary", which to me translates into fix FnF and don't just say that we need a whole new system fwiw.

[orthopa]

"Can he on his own cancel the warrants or change the conversion rate/price?"

 

Treasury can exercise the Warrant to own 79.9% of the GSEs' common stock by paying $8,000 for each company. Treasury can exercise the Warrant anytime between now and September 2008.

 

However, they weren't satisfied with that and now get 100% of the total comp. income of the GSEs.

 

Treasury and FHFA can change those terms via a 4th Amendment, although not until January 1, 2018.

 

But the treasury can make a 4th amendment without approval from congress and thus before 1/1/18 correct? I thought congress approval was only needed to get FnF out of conservatorship.

[investorG]

the share prices have not responded in recent weeks to some decently positive signs, each of which is minor but in sum they don't seem inconsequential.

 

my two guesses for this are:

 

a) the preferred shareholders are selling to rebalance their portfolios (fairholme), wind down investments (perry), attempt to weigh on the share prices to reduce media attention in advance of the new admin and/or other reasons. this dynamic, if true, would hold down the common which still seems linked to liquid preferreds in the 2:1 ratio. 

 

b) there is deep concern over mnuchin's process, at a minimum the news there might get worse before it gets better.

 

any other thoughts?  pending court release uncertainty too much to overcome?

[Mephistopheles]

Anthony Scaramucci is taking a job as a Trump advisor. Anyone know his opinion on the NWS? Couldn't find anything on Google.

[Flynnstone5]

the share prices have not responded in recent weeks to some decently positive signs, each of which is minor but in sum they don't seem inconsequential.

 

my two guesses for this are:

 

a) the preferred shareholders are selling to rebalance their portfolios (fairholme), wind down investments (perry), attempt to weigh on the share prices to reduce media attention in advance of the new admin and/or other reasons. this dynamic, if true, would hold down the common which still seems linked to liquid preferreds in the 2:1 ratio. 

 

b) there is deep concern over mnuchin's process, at a minimum the news there might get worse before it gets better.

 

any other thoughts?  pending court release uncertainty too much to overcome?

 

Would prfd shareholders like Fairholme and Perry really sell shares at these prices with the end finally in sight? Doesn't make sense to me at all. They are in a great position (being in prfd) with close ties to a friendly admin.

 

I don't see Mnuchin having any problems getting through.

 

I think what's weighing on share prices is the definite uncertainty over court decisions; and there is a great deal of talk lately about litigants possibly settling with no benefit to shareholders not directly involved in the suits like PwC. I don't have the legal expertise to know for example, can Ackman, Berkowitz, Perry, etc. structure a deal that benefits only them? Will other hedge funds come in and offer a recap strategy that screws current shareholders and allows them to walk away with the newly restructured entities?

 

I continue to find that every time that I gain optimism on this investment, it always reverts to so many negative concerns. The documents being made available is essential imo and I can't help but wonder if they ever make their way to P's attorneys. Mnuchin will certainly be questioned on FnF and how his plans could benefit hedge funds friends, etc. The perfect answer to these accusations would be to raise the document issues, the extraordinary use of privilege, the NWS and profitability. Will he bring any of this up or does he say the wrong thing and devastate recent pps gains?

 

 

[rros]

the share prices have not responded in recent weeks to some decently positive signs, each of which is minor but in sum they don't seem inconsequential.

 

my two guesses for this are:

 

a) the preferred shareholders are selling to rebalance their portfolios (fairholme), wind down investments (perry), attempt to weigh on the share prices to reduce media attention in advance of the new admin and/or other reasons. this dynamic, if true, would hold down the common which still seems linked to liquid preferreds in the 2:1 ratio. 

 

b) there is deep concern over mnuchin's process, at a minimum the news there might get worse before it gets better.

 

any other thoughts?  pending court release uncertainty too much to overcome?

 

Would prfd shareholders like Fairholme and Perry really sell shares at these prices with the end finally in sight? Doesn't make sense to me at all. They are in a great position (being in prfd) with close ties to a friendly admin.

 

I don't see Mnuchin having any problems getting through.

 

I think what's weighing on share prices is the definite uncertainty over court decisions; and there is a great deal of talk lately about litigants possibly settling with no benefit to shareholders not directly involved in the suits like PwC. I don't have the legal expertise to know for example, can Ackman, Berkowitz, Perry, etc. structure a deal that benefits only them? Will other hedge funds come in and offer a recap strategy that screws current shareholders and allows them to walk away with the newly restructured entities?

 

I continue to find that every time that I gain optimism on this investment, it always reverts to so many negative concerns. The documents being made available is essential imo and I can't help but wonder if they ever make their way to P's attorneys. Mnuchin will certainly be questioned on FnF and how his plans could benefit hedge funds friends, etc. The perfect answer to these accusations would be to raise the document issues, the extraordinary use of privilege, the NWS and profitability. Will he bring any of this up or does he say the wrong thing and devastate recent pps gains?

Nobody is selling. All shares are consolidating in a high level pennant, a continuation pattern. Typical after a huge run.  Some back and filling, profit taking... waiting for the next leg up. We go higher from here.

[Flynnstone5]

the share prices have not responded in recent weeks to some decently positive signs, each of which is minor but in sum they don't seem inconsequential.

 

my two guesses for this are:

 

a) the preferred shareholders are selling to rebalance their portfolios (fairholme), wind down investments (perry), attempt to weigh on the share prices to reduce media attention in advance of the new admin and/or other reasons. this dynamic, if true, would hold down the common which still seems linked to liquid preferreds in the 2:1 ratio. 

 

b) there is deep concern over mnuchin's process, at a minimum the news there might get worse before it gets better.

 

any other thoughts?  pending court release uncertainty too much to overcome?

 

Would prfd shareholders like Fairholme and Perry really sell shares at these prices with the end finally in sight? Doesn't make sense to me at all. They are in a great position (being in prfd) with close ties to a friendly admin.

 

I don't see Mnuchin having any problems getting through.

 

I think what's weighing on share prices is the definite uncertainty over court decisions; and there is a great deal of talk lately about litigants possibly settling with no benefit to shareholders not directly involved in the suits like PwC. I don't have the legal expertise to know for example, can Ackman, Berkowitz, Perry, etc. structure a deal that benefits only them? Will other hedge funds come in and offer a recap strategy that screws current shareholders and allows them to walk away with the newly restructured entities?

 

I continue to find that every time that I gain optimism on this investment, it always reverts to so many negative concerns. The documents being made available is essential imo and I can't help but wonder if they ever make their way to P's attorneys. Mnuchin will certainly be questioned on FnF and how his plans could benefit hedge funds friends, etc. The perfect answer to these accusations would be to raise the document issues, the extraordinary use of privilege, the NWS and profitability. Will he bring any of this up or does he say the wrong thing and devastate recent pps gains?

Nobody is selling. All shares are consolidating in a high level pennant, a continuation pattern. Typical after a huge run.  Some back and filling, profit taking... waiting for the next leg up. We go higher from here.

 

Any opinion on above and non-class action shareholders getting left out in the cold?

[hardincap]

mnuchin is an investor in paulson's fund (though just <1m)

 

https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/B003D12FCD5F4C3F852580A5004FF6A4/$FILE/Mnuchin,%20Steven%20T.%20final278.pdf

[rros]

the share prices have not responded in recent weeks to some decently positive signs, each of which is minor but in sum they don't seem inconsequential.

 

my two guesses for this are:

 

a) the preferred shareholders are selling to rebalance their portfolios (fairholme), wind down investments (perry), attempt to weigh on the share prices to reduce media attention in advance of the new admin and/or other reasons. this dynamic, if true, would hold down the common which still seems linked to liquid preferreds in the 2:1 ratio. 

 

b) there is deep concern over mnuchin's process, at a minimum the news there might get worse before it gets better.

 

any other thoughts?  pending court release uncertainty too much to overcome?

 

Would prfd shareholders like Fairholme and Perry really sell shares at these prices with the end finally in sight? Doesn't make sense to me at all. They are in a great position (being in prfd) with close ties to a friendly admin.

 

I don't see Mnuchin having any problems getting through.

 

I think what's weighing on share prices is the definite uncertainty over court decisions; and there is a great deal of talk lately about litigants possibly settling with no benefit to shareholders not directly involved in the suits like PwC. I don't have the legal expertise to know for example, can Ackman, Berkowitz, Perry, etc. structure a deal that benefits only them? Will other hedge funds come in and offer a recap strategy that screws current shareholders and allows them to walk away with the newly restructured entities?

 

I continue to find that every time that I gain optimism on this investment, it always reverts to so many negative concerns. The documents being made available is essential imo and I can't help but wonder if they ever make their way to P's attorneys. Mnuchin will certainly be questioned on FnF and how his plans could benefit hedge funds friends, etc. The perfect answer to these accusations would be to raise the document issues, the extraordinary use of privilege, the NWS and profitability. Will he bring any of this up or does he say the wrong thing and devastate recent pps gains?

Nobody is selling. All shares are consolidating in a high level pennant, a continuation pattern. Typical after a huge run.  Some back and filling, profit taking... waiting for the next leg up. We go higher from here.

 

Any opinion on above and non-class action shareholders getting left out in the cold?

My personal view is that all these big name shareholders took positions to become the new owners in a privatization. Why would they settle privately after all the effort, resources and time spent? What they want is a huge piece of the largest market there ever is and in that game be the most meaningful player.

[Mephistopheles]

the share prices have not responded in recent weeks to some decently positive signs, each of which is minor but in sum they don't seem inconsequential.

 

my two guesses for this are:

 

a) the preferred shareholders are selling to rebalance their portfolios (fairholme), wind down investments (perry), attempt to weigh on the share prices to reduce media attention in advance of the new admin and/or other reasons. this dynamic, if true, would hold down the common which still seems linked to liquid preferreds in the 2:1 ratio. 

 

b) there is deep concern over mnuchin's process, at a minimum the news there might get worse before it gets better.

 

any other thoughts?  pending court release uncertainty too much to overcome?

 

Would prfd shareholders like Fairholme and Perry really sell shares at these prices with the end finally in sight? Doesn't make sense to me at all. They are in a great position (being in prfd) with close ties to a friendly admin.

 

I don't see Mnuchin having any problems getting through.

 

I think what's weighing on share prices is the definite uncertainty over court decisions; and there is a great deal of talk lately about litigants possibly settling with no benefit to shareholders not directly involved in the suits like PwC. I don't have the legal expertise to know for example, can Ackman, Berkowitz, Perry, etc. structure a deal that benefits only them? Will other hedge funds come in and offer a recap strategy that screws current shareholders and allows them to walk away with the newly restructured entities?

 

I continue to find that every time that I gain optimism on this investment, it always reverts to so many negative concerns. The documents being made available is essential imo and I can't help but wonder if they ever make their way to P's attorneys. Mnuchin will certainly be questioned on FnF and how his plans could benefit hedge funds friends, etc. The perfect answer to these accusations would be to raise the document issues, the extraordinary use of privilege, the NWS and profitability. Will he bring any of this up or does he say the wrong thing and devastate recent pps gains?

Nobody is selling. All shares are consolidating in a high level pennant, a continuation pattern. Typical after a huge run.  Some back and filling, profit taking... waiting for the next leg up. We go higher from here.

 

Any opinion on above and non-class action shareholders getting left out in the cold?

My personal view is that all these big name shareholders took positions to become the new owners in a privatization. Why would they settle privately after all the effort, resources and time spent? What they want is a huge piece of the largest market there ever is and in that game be the most meaningful player.

 

Well if they leave out the rest of us, that's even more money to them, well worth the resources...

 

I too have been concerned about this ever since the beginning. A deal that benefits only those with connections or lawsuits. Essentially Fairholme, Perry, Paulson, Pershing, and perhaps the U.S. Government owning 100% of the two entities. I'm not a lawyer so unsure whether this is even possible, but it worries me. After all, the hedge funds are truly out for themselves, right? Mnuchin may be too good to be true for us.

[Guest cherzeca]

mnuchin is an investor in paulson's fund (though just <1m)

 

https://extapps2.oge.gov/201/Presiden.nsf/PAS+Index/B003D12FCD5F4C3F852580A5004FF6A4/$FILE/Mnuchin,%20Steven%20T.%20final278.pdf

 

i would think mnuchin's interest in paulson's advantage should be either be transferred to another party or donated to charity