Luke 532 Posted January 19, 2017 Share Posted January 19, 2017 Crapo: "they are in receivership, keep them there or recap them and put back on the market." Mnuchin (paraphrased): "I am an expert on Fannie and Freddie. Need reform and solution, status quo is not acceptable of leaving them there. Need to make sure outcome includes taxpayer not at risk and don't eliminate capital for the housing markets." Link to comment Share on other sites More sharing options...
Guest cherzeca Posted January 19, 2017 Share Posted January 19, 2017 Crapo: "they are in receivership, keep them there or recap them and put back on the market." Mnuchin (paraphrased): "I am an expert on Fannie and Freddie. Need reform and solution, status quo is not acceptable of leaving them there. Need to make sure outcome includes taxpayer not at risk and don't eliminate capital for the housing markets." mnuchin talked about not favoring either of "two extremes" Link to comment Share on other sites More sharing options...
stevevri Posted January 19, 2017 Share Posted January 19, 2017 Very rough transcript again. Senator Crapo: Mr. Mnuchin I want to try to cover 3 quick maybe not so quick questions. The first one is to return back to the discussion you were having with Senator Warner about Fannie Mae Freddie Mac and GSE reform housing policy. I’m sure you’re aware that Senator Warner and I and a number of other Senators on the banking committee have dealt with legislation to try to deal with this circumstance. We currently have a situation in which they are currently in receivership. The Federal Government is basically running them. The concern that Warner was referencing is a concern that this administration is having, not because we’re afraid of anything, but because we’re asking.. trying to find out, is that the administration may either believe it’s okay to keep them in receivership just continue to run as is and the status quo, or that it’s okay to recapitalize them and put them back into the housing market back without any reforms. And uhh.. I just wanted to ask you if you would and I realize you can’t comment on a specific plan yet but if you would comment on the fact as do you believe we need to have reform in our housing finance policy that would go further then reforming or simply keeping them in receivership. Mnuchin: Again thank you for that I would comment that unlike medicare where I acknowledge I am not an expert, I am expert, I’ve been around these for 30 years, I understand these very well and thats why it would be one of my priorities to work with you. What I am focused on is We need housing reform and a solution. So I start with the standpoint that the status quo is not acceptable of just leaving them there. I think as you know there are two extremes on this and it’s something that I look forward to sitting down and talking to you with you and I believe whatever the outcome is one we don’t put the tax payers at risk, and two we don’t eliminate capital for the housing markets. I’ve very concerned that middle income people and moderate income who need mortgage loans and access to this capital in the mortgage market don’t lose it. [brief interruption by Crapo] I’m optimistic we can work together and hopefully figure out a bipartisan solution Link to comment Share on other sites More sharing options...
Luke 532 Posted January 19, 2017 Share Posted January 19, 2017 It might be worthwhile to note that earlier in the hearing, when asked about the debt ceiling and the idea that some politicians want to simply ignore paying certain debts, Mnuchin was very clear that the US will pay its debts and obligations as they are contracts/agreements. He wasn't discussing Fannie and Freddie but rather national debt to foreign nations, but his comments struck me as somebody that strongly believes in the power of honoring a commitment and the importance of honoring contracts (think preferred share contracts). Link to comment Share on other sites More sharing options...
Flynnstone5 Posted January 19, 2017 Share Posted January 19, 2017 Could it really be true that he hasn't reviewed anything regarding the legal cases per his comments to Warner? Link to comment Share on other sites More sharing options...
Luke 532 Posted January 19, 2017 Share Posted January 19, 2017 Paraphrased... Warner: "hedge funds went in and bought them cheap and launched campaign, Trump and you invested in one of those funds, in light of your firm commitment to not recap and release" (my note: Mnuchin didn't say that, he didn't commit to that!) Mnuchin: "I have divested my interest in the fund as well already. My job is to look out for best interest for taxpayer, maintain housing liquidity, whatever the legal issues are I haven't studied that at all." (Mnuchin didn't comment this time on Warner's assertion that Mnuchin commited to not recap and release). Link to comment Share on other sites More sharing options...
orthopa Posted January 19, 2017 Share Posted January 19, 2017 If you guys are able to go back and watch paulsons fiance in the background when this involvement in paulsons funds and his intentions with FnF. Very telling IMO. She looked more uncomfortable then with any other line of questioning. Almost like she knows something is up. I obviously maybe very biased and reading into nothing but worth a look if not watched. Link to comment Share on other sites More sharing options...
orthopa Posted January 19, 2017 Share Posted January 19, 2017 Could it really be true that he hasn't reviewed anything regarding the legal cases per his comments to Warner? I would believe that as much as his dancing around he FnF questions as he did. Link to comment Share on other sites More sharing options...
stevevri Posted January 19, 2017 Share Posted January 19, 2017 Same disclaimer very rough. Warner: I appreciate very much your earlier comments to me and Senator Crapo and me about GSE reform. I wanted to clear up one thing. As you’re aware There have been a number of hedge funds that at the absolute demise of those Fannie and Freddie in the public market they went in and bought them cheap. That’s what hedge funds do. And they have then launched a remarkable both public and private campaign, and in certain ways character assassination of certain senators, certainly is unprecedented. The President Elect and you invested in one of those funds, the President elect says he has divested himself, I imagine you will divest yourself as well, but again in light of your firm commitment earlier to not go with a recap and release scheme that would greatly enhance those hedge funds profits I believe and then potentially leave tax payers holding the bag if another housing crisis took place. I just thought you’d just want to comment and reaffirm that commitment you are looking out for interests of the taxpayers and not some of the folks you’ve might of invested in, in the past. Mnuchin: First of all, let me just comment I have divested my interest in that fund as well, already. And as I’ve said my job is to look out what’s for the best interest for the taxpayers balancing on this issue the need for housing reform and making sure that we maintain housing liquidity with making sure that the taxpayers are not on the hook for that um and whatever the legal issues are associated with uh.. Again As it relates to the entities I have tremendous expertise on the entities, as it relates to the legal case of various holders and different securities. I haven’t studied that at all. Warner: [couldn’t hear] Those of us who’ve been apart of the reform, We realize the legal proceedings will continue. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted January 19, 2017 Share Posted January 19, 2017 so if mnuchin just flat out said to senators, hey as treasury secretary, i can settle these lawsuits and administratively release GSEs w/o your input, he would likely lose crapo's support and risk not getting out of committee. i imagine he answered these questions to warner and crapo in private meeting, and figured out what he needed to say to get confirmed. once mnuchin is confirmed and seeks to solve GSEs "reasonably fast" he will be in charge of process. in front of senate finance committee, mnuchin is not in charge of process. i think patience is warranted for mnuchin to first get into his office, do a complete review (given that he is a careful guy and there is alot of obama treasury documentation that he will be able to read for first time), and commence a process in which he can ask for senators' input, but in which he will be in charge and, using his business skills, reach a sensible situation that honors shareholder rights. Link to comment Share on other sites More sharing options...
stevevri Posted January 19, 2017 Share Posted January 19, 2017 so if mnuchin just flat out said to senators, hey as treasury secretary, i can settle these lawsuits and administratively release GSEs w/o your input, he would likely lose crapo's support and risk not getting out of committee. i imagine he answered these questions to warner and crapo in private meeting, and figured out what he needed to say to get confirmed. once mnuchin is confirmed and seeks to solve GSEs "reasonably fast" he will be in charge of process. in front of senate finance committee, mnuchin is not in charge of process. i think patience is warranted for mnuchin to first get into his office, do a complete review (given that he is a careful guy and there is alot of obama treasury documentation that he will be able to read for first time), and commence a process in which he can ask for senators' input, but in which he will be in charge and, using his business skills, reach a sensible situation that honors shareholder rights. Yup, the goal of today is confirmation and he also doesn't want to box himself into a corner. Link to comment Share on other sites More sharing options...
Luke 532 Posted January 19, 2017 Share Posted January 19, 2017 so if mnuchin just flat out said to senators, hey as treasury secretary, i can settle these lawsuits and administratively release GSEs w/o your input, he would likely lose crapo's support and risk not getting out of committee. i imagine he answered these questions to warner and crapo in private meeting, and figured out what he needed to say to get confirmed. once mnuchin is confirmed and seeks to solve GSEs "reasonably fast" he will be in charge of process. in front of senate finance committee, mnuchin is not in charge of process. i think patience is warranted for mnuchin to first get into his office, do a complete review (given that he is a careful guy and there is alot of obama treasury documentation that he will be able to read for first time), and commence a process in which he can ask for senators' input, but in which he will be in charge and, using his business skills, reach a sensible situation that honors shareholder rights. +1 Link to comment Share on other sites More sharing options...
Luke 532 Posted January 19, 2017 Share Posted January 19, 2017 Overall, I think Mnuchin did a good job and didn't say/do much that would prevent him from getting the job. I'm happy with a guy like him at the head of Treasury, and even more pleased given my substantial investments in FNMAS, FNMAH, and FMCCL. Link to comment Share on other sites More sharing options...
waynepolsonAtoZ Posted January 20, 2017 Share Posted January 20, 2017 Q. "Anyone have information regarding the Freddie Pfds: FREGP, FREJP, FREJN, and FREJO? They aren't listed in the 10-k nor can I find any offering circulars. Are they pari passu with the other preferreds?" A. Yes, I've got some of FREJO. I believe they were originally private placements that now trade in the market. I bought this one a day or so after August 17, 2012. It's always been a little quiet, but follows the other ones pretty closely. The Quantumonline summary for FREJP says it's paripassu with the other preferreds. Link to comment Share on other sites More sharing options...
rros Posted January 20, 2017 Share Posted January 20, 2017 Q. "Anyone have information regarding the Freddie Pfds: FREGP, FREJP, FREJN, and FREJO? They aren't listed in the 10-k nor can I find any offering circulars. Are they pari passu with the other preferreds?" A. Yes, I've got some of FREJO. I believe they were originally private placements that now trade in the market. I bought this one a day or so after August 17, 2012. It's always been a little quiet, but follows the other ones pretty closely. The Quantumonline summary for FREJP says it's paripassu with the other preferreds. I do not think Warner succeeded in extracting a promise from Mnuchin regarding no administrative action bypassing Congress. All Mnuchin committed to was protecting taxpayers and keeping the mortgage market liquid. His 2 priorities. As for recap/release he never ever mentioned this. But he did say "once we restructured the companies" in the now famous interview. In my view, the window for a 4th amendment is still wide open. And restructuring w/o Congress too. Link to comment Share on other sites More sharing options...
Mephistopheles Posted January 20, 2017 Share Posted January 20, 2017 Q. "Anyone have information regarding the Freddie Pfds: FREGP, FREJP, FREJN, and FREJO? They aren't listed in the 10-k nor can I find any offering circulars. Are they pari passu with the other preferreds?" A. Yes, I've got some of FREJO. I believe they were originally private placements that now trade in the market. I bought this one a day or so after August 17, 2012. It's always been a little quiet, but follows the other ones pretty closely. The Quantumonline summary for FREJP says it's paripassu with the other preferreds. Cool thanks I just saw that. I figured it out another way also. I looked at one of the circulars for one of the original publicly traded preferreds and it named all of the preferreds that it is pari passu with, and that list includes all of these private placement ones. I would still feel more comfortable with a circular/prospectus though. Is there any history of when/how these things started trading? Link to comment Share on other sites More sharing options...
investorG Posted January 20, 2017 Share Posted January 20, 2017 prepare for another wild ride today. plenty of nervous owners of illiquid preferreds need to use the common to hedge. imo pay attention to the news on mnuchin's confirmation process and any other potential disclosures or issues there rather than the short term stock price --- there is some crazy misleading press stories out there today. (and the 2 big court cases, as always). good luck! Link to comment Share on other sites More sharing options...
investorG Posted January 20, 2017 Share Posted January 20, 2017 put simply, yesterday Mnuchin highlighted the importance of the GSEs and that the status quo is not acceptable --- this is good news. moreover he let everyone know that he is the expert on this rather than them. good luck in the coming days, Mr Mnuchin! Link to comment Share on other sites More sharing options...
orthopa Posted January 20, 2017 Share Posted January 20, 2017 http://www.cnbc.com/2017/01/20/john-paulson-increased-long-exposure-to-stocks-after-trumps-win.html Link to comment Share on other sites More sharing options...
orthopa Posted January 20, 2017 Share Posted January 20, 2017 FWIW Link to comment Share on other sites More sharing options...
Steve_Berk Posted January 20, 2017 Share Posted January 20, 2017 Honestly the people who are freaking out over his testimony are either pretending in order to help manipulate the market or they are just not listening/ don't understand how politics work at all. Even if you read the very words that he stated, Mnuchin said nothing extraordinary. He only says that he's not for recap and release without any conditions whatsoever. I think we all knew that already, or at least should have. Although we all know that Fannie and Freddie weren't the cause of the mortgage crisis, I also think that most of us would agree that some conditions or restrictions are necessary and that it would be neither a politically feasible or even practically desirable solution to just go back to where we were before. I find nothing that he said surprising in the very least. Very rough transcript again. Senator Crapo: Mr. Mnuchin I want to try to cover 3 quick maybe not so quick questions. The first one is to return back to the discussion you were having with Senator Warner about Fannie Mae Freddie Mac and GSE reform housing policy. I’m sure you’re aware that Senator Warner and I and a number of other Senators on the banking committee have dealt with legislation to try to deal with this circumstance. We currently have a situation in which they are currently in receivership. The Federal Government is basically running them. The concern that Warner was referencing is a concern that this administration is having, not because we’re afraid of anything, but because we’re asking.. trying to find out, is that the administration may either believe it’s okay to keep them in receivership just continue to run as is and the status quo, or that it’s okay to recapitalize them and put them back into the housing market back without any reforms. And uhh.. I just wanted to ask you if you would and I realize you can’t comment on a specific plan yet but if you would comment on the fact as do you believe we need to have reform in our housing finance policy that would go further then reforming or simply keeping them in receivership. Mnuchin: Again thank you for that I would comment that unlike medicare where I acknowledge I am not an expert, I am expert, I’ve been around these for 30 years, I understand these very well and thats why it would be one of my priorities to work with you. What I am focused on is We need housing reform and a solution. So I start with the standpoint that the status quo is not acceptable of just leaving them there. I think as you know there are two extremes on this and it’s something that I look forward to sitting down and talking to you with you and I believe whatever the outcome is one we don’t put the tax payers at risk, and two we don’t eliminate capital for the housing markets. I’ve very concerned that middle income people and moderate income who need mortgage loans and access to this capital in the mortgage market don’t lose it. [brief interruption by Crapo] I’m optimistic we can work together and hopefully figure out a bipartisan solution Link to comment Share on other sites More sharing options...
Flynnstone5 Posted January 20, 2017 Share Posted January 20, 2017 Honestly the people who are freaking out over his testimony are either pretending in order to help manipulate the market or they are just not listening/ don't understand how politics work at all. Even if you read the very words that he stated, Mnuchin said nothing extraordinary. He only says that he's not for recap and release without any conditions whatsoever. I think we all knew that already, or at least should have. Although we all know that Fannie and Freddie weren't the cause of the mortgage crisis, I also think that most of us would agree that some conditions or restrictions are necessary and that it would be neither a politically feasible or even practically desirable solution to just go back to where we were before. I find nothing that he said surprising in the very least. Very rough transcript again. Senator Crapo: Mr. Mnuchin I want to try to cover 3 quick maybe not so quick questions. The first one is to return back to the discussion you were having with Senator Warner about Fannie Mae Freddie Mac and GSE reform housing policy. I’m sure you’re aware that Senator Warner and I and a number of other Senators on the banking committee have dealt with legislation to try to deal with this circumstance. We currently have a situation in which they are currently in receivership. The Federal Government is basically running them. The concern that Warner was referencing is a concern that this administration is having, not because we’re afraid of anything, but because we’re asking.. trying to find out, is that the administration may either believe it’s okay to keep them in receivership just continue to run as is and the status quo, or that it’s okay to recapitalize them and put them back into the housing market back without any reforms. And uhh.. I just wanted to ask you if you would and I realize you can’t comment on a specific plan yet but if you would comment on the fact as do you believe we need to have reform in our housing finance policy that would go further then reforming or simply keeping them in receivership. Mnuchin: Again thank you for that I would comment that unlike medicare where I acknowledge I am not an expert, I am expert, I’ve been around these for 30 years, I understand these very well and thats why it would be one of my priorities to work with you. What I am focused on is We need housing reform and a solution. So I start with the standpoint that the status quo is not acceptable of just leaving them there. I think as you know there are two extremes on this and it’s something that I look forward to sitting down and talking to you with you and I believe whatever the outcome is one we don’t put the tax payers at risk, and two we don’t eliminate capital for the housing markets. I’ve very concerned that middle income people and moderate income who need mortgage loans and access to this capital in the mortgage market don’t lose it. [brief interruption by Crapo] I’m optimistic we can work together and hopefully figure out a bipartisan solution +1 Well said Link to comment Share on other sites More sharing options...
Luke 532 Posted January 20, 2017 Share Posted January 20, 2017 Honestly the people who are freaking out over his testimony are either pretending in order to help manipulate the market or they are just not listening/ don't understand how politics work at all... +1 Well said Agreed. Well said, Steve. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted January 20, 2017 Share Posted January 20, 2017 @steve_berk agreed. looks like market realizes now that what happened yesterday is not what he said, but that he essentially sealed his nomination...which gets him to do rather than say Link to comment Share on other sites More sharing options...
hardincap Posted January 20, 2017 Share Posted January 20, 2017 mnuchin intimating that he has a strong POV on what to do w/ the gses, having been in the industry for 30 years, was pretty big to me. no rational person with a historical perspective will want to "kill" the gses. and to preserve it you have to respect its shareholders Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now