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

[rros]

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

He used the word "fix" twice. On top of telling senators he was an expert in the matter. Prior, he spoke of "restructuring". We don't know how far he will take this but companies will survive with a fix. And hopefully most of the current capital structure will too survive.

[Guest cherzeca]

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

 

right.  mnuchin made it quite clear that he wants GSEs to be safe for the US taxpayer and effective in providing liquidity for housing finance, that the status quo is unacceptable. what was unsaid was how GSE shareholders will be treated in connection with this project.  i think we will find out by action over time.

[orthopa]

https://www.congress.gov/bill/115th-congress/house-bill/298/text

[TwoCitiesCapital]

I increased my position in the common by 20% yesterday in the confusion. Here's to hoping for a good outcome.

[doughishere]

Pagliara vs Freddie Mac voluntary Motion to Dismiss

[investorG]

fwiw an article on thestreet.com came out at 1pm on friday, right when the common dropped 20 cents in an hour.  you can find the article on gselinks.com.  i'd call the commentary non-thorough.

[Flynnstone5]

fwiw an article on thestreet.com came out at 1pm on friday, right when the common dropped 20 cents in an hour.  you can find the article on gselinks.com.  i'd call the commentary non-thorough.

 

Author thinks Mnuchin might likely support Johnson-Crapo bill and says in a tweet his core view is that a phase-out is the much more politically viable. From what I've read, Johnson-Crapo would not work and certainly doesn't fit "reasonably quickly". When he says phase-out, isn't he basically referring to a liquidation.

 

All I want to know is, where the hell is the writ decision? Seriously....wtf!?

[investorG]

fwiw an article on thestreet.com came out at 1pm on friday, right when the common dropped 20 cents in an hour.  you can find the article on gselinks.com.  i'd call the commentary non-thorough.

 

Author thinks Mnuchin might likely support Johnson-Crapo bill and says in a tweet his core view is that a phase-out is the much more politically viable. From what I've read, Johnson-Crapo would not work and certainly doesn't fit "reasonably quickly". When he says phase-out, isn't he basically referring to a liquidation.

 

All I want to know is, where the hell is the writ decision? Seriously....wtf!?

 

the article's author is hearing what he wants to hear, imo.

 

the two things that were clear to me from the hearing were he thinks the GSEs play a crucial role and he's not a fan of either extreme solution.  the article's author favors an extreme solution.

 

i hope mnuchin makes it through, to solve this situation for justice and also other matters too.

[Mephistopheles]

 

All I want to know is, where the hell is the writ decision? Seriously....wtf!?

 

One possibility could be that they are negotiating a settlement. Maybe after the election, Obama saw the writing on the wall, didn't want Trump to release any documents that would harm is legacy. Same thing for the DC Court of appeals.

 

Of course, they could just be taking their sweet ass time.

 

Edit: Has there been any progress in any of the cases since the election?

[Guest cherzeca]

"Edit: Has there been any progress in any of the cases since the election?"

 

no

[PaulyMontreal]

common knowledge clinton's made 2 billion for their foundation, also common trump will want to be the most profitable president by far, no doubt. sitting with jared, going over possibilities, since their both builders, they must have proposed how best to profit from presidency, no doubt, also must consider slim odds for impeachment and 50/50 for 2nd term, because if you think trump will want to make 100 million from a hundred speeches afterwards, i dont think so given it's unknown how his term(s) will end, negatively is a possibility and again, being builders, why give a hundred speeches when you can build one building and make the same money, not mutually exclusive of course but he already does that so just for more money given clintons just count it and dont bark for it, much. eh, not a plan...

 

point of this jibberish, imo, is that gse's seem like a golden opportunity to justify letting commons go, if he needed any prodding, the only optics are ackman's 180mm shares, so commons at a cnote make his funds 18B, probably not great optics, but then again, public's not attuned to gse's at all much less an already multi billionaire hf guy and current admin doesn't own this issue politically so you know trump had the exact same convo obama had, "what's the worst we can get away with politically" (one major adv is obama cared about approval's, trump does not) of course the missing round, red little piece here on top is the court case generated public opinion. can you imagine if all that said and then trump gets to be the one to rap obama on the wrists with a solid platinum riding crop bestowed with the hope diamond on top? wow, i can see trump on the podium now, fielding the question that ackman's fund just posted a 20B YR? Hey, they've been suing obama for 8 years and you heard the judge, what did I do? And the guy just made six billion in the clear..........

 

And frankly, every swinging soul in the room knows regardless of the price commons are released, if so, even $5, they will run on fundamentals and will rise quick enough anyways, being a quasi monopoly for the love of god, so you'd have to assume market price for commons not primary focus unless trump wants to parlay this unbelievably golden opportunity, cadillac, handed to him on a silver platter by none other than your mortal friking enemy, of all people, "so lemme get this straight, i can release the gse's & doc's which obama stole, keep the money and scrap the warrants, and give hedge funds some 30B dollars" and be a power to the people for guaranteeing the 30YR? It's a good amuse bouche to the presidency anyways, and you never know, might be your best bite of the night. That scrapping of lower hud fees has to be intertwined, has to, why that, why on that day? Unless he just had to sign something?

 

now why would a president, being antagonized 24/7 for everything from his minuscule hands, victory ,status, knowledge, competence etc.......all day long which will take it's toll, want to hand over that much money to paulson/ackman is only question, imho, and answer, imho, is 20%

 

that's the answer, well a number anyways, paulson/ackman conversation i bet already took place, (nice pic with mnuchin icahn inaug night) given in form of building loans, wiped, or my favorite, a hedge fund partnership with either or both where boss man receives equity stake equal to his 5-6B he "made" off that one deal in 24 little hours. Oh what a difference a day makes indeed....Day 1, 6B. You know he wants, very much, as would we all, to declare a deal like that to his inner circle, no doubt.

 

thanks for humouring me, could be my self conscious rationalizing the FACT I"M ONLY IN COMMONS HERE!!!!!!!!!!!!!!!

 

Good Luck everyone and God Bless Us All,

[stevevri]

The warrants just totally going away seems very fantasy land. Selling the warrants in the open market is what will give Trump a headline price.

 

The money swept basically just accounts for what was owed for the Government's preferred under the original deal.

 

[Guest cherzeca]

@pauly

 

the amuse bouche is often the best bite of the night

[no_free_lunch]

Pauly,

 

Rough day for me outside of the market but somehow your post made me smile.  Cheers.  And WTF buy some damned prefs!

[Mephistopheles]

"Edit: Has there been any progress in any of the cases since the election?"

 

no

 

Then I think there's a real possibility settlement is in the works. The Obama administration had absolutely nothing to gain and everything to lose by keeping these cases going after the election. And not even Obama himself, but more so those "fellow travelers" who wouldn't want to risk unsealing those emails. Why risk that knowing Trump/Mnuchin are going to settle regardless?

 

Time will tell..the longer there is complete radio silence, the more likely this is imo.

[Luke 532]

"Edit: Has there been any progress in any of the cases since the election?"

 

no

 

Then I think there's a real possibility settlement is in the works. The Obama administration had absolutely nothing to gain and everything to lose by keeping these cases going after the election. And not even Obama himself, but more so those "fellow travelers" who wouldn't want to risk unsealing those emails. Why risk that knowing Trump/Mnuchin are going to settle regardless?

 

Time will tell..the longer there is complete radio silence, the more likely this is imo.

 

Wouldn't surprise me at all.  I've thought for a long time, as many of you have, that Obama's best and most logical move was to get this wrapped up before he left office.  I still think it's reckless on his part, from the perspective of his personal risk, to ultimately put the power in Trump's hands.  Perhaps that's why Trump and Obama have been reported to be talking so much behind the scenes.  Anyway, settlement or not, I think we're golden.

[hardincap]

How would a settlement work when obama has already left? I think that train has left the station

[Luke 532]

How would a settlement work when obama has already left? I think that train has left the station

 

Obama would have to take Trump at his word that he won't release the docs and he'd also have to rely on Watt to carry out the wishes of his previous boss against those of his current boss.  Tricky to say the least.

[hardincap]

How would a settlement work when obama has already left? I think that train has left the station

 

Obama would have to take Trump at his word that he won't release the docs and he'd also have to rely on Watt to carry out the wishes of his previous boss against those of his current boss.  Tricky to say the least.

 

The obama admin has always been acting on ideology, not pragmatism, with respect to the GSEs. This is sort of like a religious war. I think hell freezes over before they settle and release the GSEs

[Flynnstone5]

How would a settlement work when obama has already left? I think that train has left the station

 

Obama would have to take Trump at his word that he won't release the docs and he'd also have to rely on Watt to carry out the wishes of his previous boss against those of his current boss.  Tricky to say the least.

 

The obama admin has always been acting on ideology, not pragmatism, with respect to the GSEs. This is sort of like a religious war. I think hell freezes over before they settle and release the GSEs

 

 

I agree. I still think Merkets idea makes the most sense. Trump/Mnuchin have the ability to structure a deal that allows them to free FnF, reward shareholders particularly Paulson, Icahn, Berkowitz, make money on some utilization of warrants "for taxpayers" and then let the media go crazy for a while accusing Trump of crony capitalism, billionaire hf blah balh blah. As the story reaches it's frenzied peak, he dumps the most damning documents to the public heavily damaging Obama and the democrats. That would be a classic Trump move.

[Luke 532]

 

I agree. I still think Merkets idea makes the most sense. Trump/Mnuchin have the ability to structure a deal that allows them to free FnF, reward shareholders particularly Paulson, Icahn, Berkowitz, make money on some utilization of warrants "for taxpayers" and then let the media go crazy for a while accusing Trump of crony capitalism, billionaire hf blah balh blah. As the story reaches it's frenzied peak, he dumps the most damning documents to the public heavily damaging Obama and the democrats. That would be a classic Trump move.

 

Yes, it would be a classic Trump move.  It would also be justice coming full circle for Obama and the others involved in the heist and I'd welcome it.

[Mephistopheles]

How would a settlement work when obama has already left? I think that train has left the station

 

They could have set the wheels in motion immediately after the election, stopping all of the cases from progressing and ordering the doj lawyers to carve out a settlement. Obviously it's a lot of money and complicated so they can still be working on it. After all, the default assumption is that the cases are still moving even though Obama left, right?

[Guest cherzeca]

at some point, DOJ/fhfa will have to settle with Ps.  whether that is before or after perry appeals decision i dont know.  it does appear that perry is being slowed for some reason.  but there will be a settlement because perry is not going to a full trial (assuming remand) given the timeline under which i think the trump administration wants GSEs to get done.

 

now, i see the settlement with Ps as primarily economic, while i think mnuchin has at least intimated that he wants congress's input on reform aspects (i would think principally capital levels, and maybe whether to convert into some sort of utility).  is the economic settlement with Ps done at same time reform is implemented?  i would think so.  maybe a pref P doesnt care about GSE reform if his holdings go to par and he starts getting a dividend. the common P certainly cares about what the GSEs look like going forward.

 

so assuming that this will be a combination settlement that needs for all Ps to agree economically and gets input from congress about reform ideas going forward, when will this get done?  certainly not before mnuchin is confirmed, and likely not w/in a few months thereafter. while Ps are ready to talk, i think both mnuchin and congress have very full plates.

 

then coming back to perry, assuming no settlement gets done w/in next few months, one may think that perry decision comes down finally...which will affect the settlement discussion parameters.

 

so this is really fluid imo.

[hardincap]

it took 4 months for sweeney to issue her order on the 56 docs and its been 3 months since the writ. there seems to be a reasonable and growing chance that the government wins mandamus at least in part, just based on the delay.

[Guest cherzeca]

it took 4 months for sweeney to issue her order on the 56 docs and its been 3 months since the writ. there seems to be a reasonable and growing chance that the government wins mandamus at least in part, just based on the delay.

 

disagree.  part of "delay" of course attributable to holiday season.  but as for predictive tells, the merits are far more important than any time issue.  as for timing, judges view their job as to get the process and result right, and timing for parties' sake is irrelevant.

 

as for the merits, remember that the standard of review on a mandamus writ is whether sweeney made a clear legal error.  this is hard for govt to show since the legal rule she was following was a balancing act, which she performed.  govt's interest in maintaining communication integrity vs Ps' need for evidence.  it would be very surprising for appellate court to say she made clear legal error in the way her balancing analysis came out.  this standard of review is not to perform a de novo second guessing review, but basically to see if she got the rule of law right, and the rule of law here is to perform a balancing act.  the appellate court would have to rule that the privilege claim supersedes Ps's need for evidence, and i just dont think that is the rule of law at issue here.

 

but i also felt strongly that lamberth should have ruled otherwise, so there.