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

[muscleman]

https://www.bloomberg.com/news/articles/2017-04-27/fannie-and-freddie-back-in-the-black

 

"Mnuchin put one of his counselors, Craig Phillips, in charge of the situation. In meetings, Phillips has floated ideas as wide-ranging as putting the companies into receivership, which could wipe out investors, as well as legislation to replace or supplement them with a new system, according to people familiar with the matter. Clarity on what the administration wants to do could be a long way off."

 

This continues to worry me.  Receivership -> create new legal entity ala MBA proposal.  Seems this Craig Phillips is not the best person to be in charge.

Also,

 

receivership > liquidation preference > Jrs. at par (provided Trump does away with the Srs. on Jan 2018.

 

Depending on how the 265 bn already paid to treasury is counted. If that's counted as dividend, then the current sr notes are still outstanding, so receivership would pay them back first and there will be no money left for jr preferreds.

 

 

[deadspace]

https://www.bloomberg.com/news/articles/2017-04-27/fannie-and-freddie-back-in-the-black

 

"Mnuchin put one of his counselors, Craig Phillips, in charge of the situation. In meetings, Phillips has floated ideas as wide-ranging as putting the companies into receivership, which could wipe out investors, as well as legislation to replace or supplement them with a new system, according to people familiar with the matter. Clarity on what the administration wants to do could be a long way off."

 

This continues to worry me.  Receivership -> create new legal entity ala MBA proposal.  Seems this Craig Phillips is not the best person to be in charge.

Also,

 

receivership > liquidation preference > Jrs. at par (provided Trump does away with the Srs. on Jan 2018.

 

Depending on how the 265 bn already paid to treasury is counted. If that's counted as dividend, then the current sr notes are still outstanding, so receivership would pay them back first and there will be no money left for jr preferreds.

 

And the appeals court decision would suggest they are counted as dividends !!!!  Tough question for the crowd. I have held this for years. But is this really an investment any more ??

[muscleman]

https://www.bloomberg.com/news/articles/2017-04-27/fannie-and-freddie-back-in-the-black

 

"Mnuchin put one of his counselors, Craig Phillips, in charge of the situation. In meetings, Phillips has floated ideas as wide-ranging as putting the companies into receivership, which could wipe out investors, as well as legislation to replace or supplement them with a new system, according to people familiar with the matter. Clarity on what the administration wants to do could be a long way off."

 

This continues to worry me.  Receivership -> create new legal entity ala MBA proposal.  Seems this Craig Phillips is not the best person to be in charge.

Also,

 

receivership > liquidation preference > Jrs. at par (provided Trump does away with the Srs. on Jan 2018.

 

Depending on how the 265 bn already paid to treasury is counted. If that's counted as dividend, then the current sr notes are still outstanding, so receivership would pay them back first and there will be no money left for jr preferreds.

 

And the appeals court decision would suggest they are counted as dividends !!!!  Tough question for the crowd. I have held this for years. But is this really an investment any more ??

 

But if the company declares chp 11 within two years after large sums of money are paid out as dividends, that's a fraudulence conveyance case.

For a private party, no matter what they do in this situation, it is illegal. But for the government, it seems that nothing is illegal no matter what.  ::)

Even Trump and the white house lost the immigration case and sanctuary city funding case.

 

I kinda felt like Obama is still ruling this country through his tight control of the liberal judges.

 

 

[Luke 532]

At the 6:20 mark of this video, Rep. Hensarling and Maria Bartiromo discuss Fannie/Freddie (this morning)... http://video.foxnews.com/v/5416917954001/?#sp=show-clips

 

Bartiromo: "Real quick, sir.  Fannie and Freddie privatized, is that on your agenda... over the near term?"

 

Hensarling: "Absolutely.  We have got to reform our housing finance system.  We still essentially have a government monopoly and we're repeating many of the same mistakes, Maria, that led to the crisis in the first place.  So I look forward to working with the Administration, Senator Mike Crapo, my counterpart in the Senate, and we're going to get this done."

[no_free_lunch]

I do tend to agree with a lot of the negative sentiment however I think the prefs have it priced in.  I don't have much to base it on but I feel they would at least settle with the prefs and at current valuations that would cost them what, $6-7B?  I wouldn't go near the commons.

[hardincap]

At the 6:20 mark of this video, Rep. Hensarling and Maria Bartiromo discuss Fannie/Freddie (this morning)... http://video.foxnews.com/v/5416917954001/?#sp=show-clips

 

Bartiromo: "Real quick, sir.  Fannie and Freddie privatized, is that on your agenda... over the near term?"

 

Hensarling: "Absolutely.  We have got to reform our housing finance system.  We still essentially have a government monopoly and we're repeating many of the same mistakes, Maria, that led to the crisis in the first place.  So I look forward to working with the Administration, Senator Mike Crapo, my counterpart in the Senate, and we're going to get this done."

 

i dont think he actually meant absolutely to privatization. its important not to read too much into somewhat ambiguous statements, a la senator brown speaking of "current settlement negotiations" a while back

[Luke 532]

http://www.icba.org/news-events/press-releases/2017/05/01/president-trump-kicks-off-icba-capital-summit

 

Washington, D.C. (April 30, 2017)—More than 100 community bankers representing the Independent Community Bankers of America® (ICBA) will meet with President Donald Trump and other top administration officials at the White House to kick off ICBA’s Capital Summit, which begins tomorrow.

 

Mnuchin and Hensarling are speaking at this event. 

 

ICBA had a very shareholder-friendly (it seems) housing reform proposal a week ago.

[Luke 532]

Maria Bartiromo using the Fanniegate hashtag tonight.  Probably more of the same from Mnuchin tomorrow morning but wanted to mention it in case anybody wants to watch on the off chance he mentions something new.

 

Maria Bartiromo‏Verified account @MariaBartiromo

Tomorrow bright & early @MorningsMaria @FoxBusiness @USTreasury secy @stevenmnuchin1 #taxreform #fanniegate 6-9am et

[muscleman]

At the 6:20 mark of this video, Rep. Hensarling and Maria Bartiromo discuss Fannie/Freddie (this morning)... http://video.foxnews.com/v/5416917954001/?#sp=show-clips

 

Bartiromo: "Real quick, sir.  Fannie and Freddie privatized, is that on your agenda... over the near term?"

 

Hensarling: "Absolutely.  We have got to reform our housing finance system.  We still essentially have a government monopoly and we're repeating many of the same mistakes, Maria, that led to the crisis in the first place.  So I look forward to working with the Administration, Senator Mike Crapo, my counterpart in the Senate, and we're going to get this done."

 

"We still essentially have a government monopoly and we're repeating many of the same mistakes"

 

Is that still the same old narrative that FnF are monopolies and they should have been replaced and the many big banks should launch competitive business lines?

 

This statement could mean anything to anyone. Bob Corker would interpret it the above way I think.

But people on this board would think it means releasing FnF.

 

[Luke 532]

At the 6:20 mark of this video, Rep. Hensarling and Maria Bartiromo discuss Fannie/Freddie (this morning)... http://video.foxnews.com/v/5416917954001/?#sp=show-clips

 

Bartiromo: "Real quick, sir.  Fannie and Freddie privatized, is that on your agenda... over the near term?"

 

Hensarling: "Absolutely.  We have got to reform our housing finance system.  We still essentially have a government monopoly and we're repeating many of the same mistakes, Maria, that led to the crisis in the first place.  So I look forward to working with the Administration, Senator Mike Crapo, my counterpart in the Senate, and we're going to get this done."

 

"We still essentially have a government monopoly and we're repeating many of the same mistakes"

 

Is that still the same old narrative that FnF are monopolies and they should have been replaced and the many big banks should launch competitive business lines?

 

This statement could mean anything to anyone. Bob Corker would interpret it the above way I think.

But people on this board would think it means releasing FnF.

 

I agree that it could mean various things.  I just find it useful to post quotes when Fannie Mae is discussed openly in the media by people of influence.

[muscleman]

definitely. Thank you Luke. Please keep posting.

[SnarkyPuppy]

I think this is good news, right?  8)

 

Mnuchin: "Obama Admin used Fannie, Freddie profits to pay for other parts of govt while keeping taxpayers at risk"

[paperwerks]

Here it is. He said it on tv:

 

https://mobile.twitter.com/AnthonyBonsigno/status/859003645198839810/video/1

 

So how can he justify another quarterly sweep after saying this??

[Luke 532]

Here it is. He said it on tv:

 

https://mobile.twitter.com/AnthonyBonsigno/status/859003645198839810/video/1

 

So how can he justify another quarterly sweep after saying this??

 

Bartiromo: "There's been a conversation on Twitter and has been for a long time that President Obama needed money for Obamacare and he would take from all the agencies and he took from Fannie and Freddie.  Is that true?"

 

Mnuchin: "It's true.  They used the profits of Fannie and Freddie to pay for other parts of the government while they kept taxpayers at risk."

 

Mnuchin has been very vocal that one of his main goals with housing reform is to make sure the taxpayers are not at risk.  Here he makes a clear connection that using profits of GSE's to fund other programs keeps taxpayers at risk. 

[rros]

Here it is. He said it on tv:

 

https://mobile.twitter.com/AnthonyBonsigno/status/859003645198839810/video/1

 

So how can he justify another quarterly sweep after saying this??

 

Bartiromo: "There's been a conversation on Twitter and has been for a long time that President Obama needed money for Obamacare and he would take from all the agencies and he took from Fannie and Freddie.  Is that true?"

 

Mnuchin: "It's true.  They used the profits of Fannie and Freddie to pay for other parts of the government while they kept taxpayers at risk."

 

Mnuchin has been very vocal that one of his main goals with housing reform is to make sure the taxpayers are not at risk.  Here he makes a clear connection that using profits of GSE's to fund other programs keeps taxpayers at risk.

Careful. He retracted in the past. This time he could say "I have never said FF's profits were used to pay for Ocare. I said they were used to pay for other parts of the government".

[waynepolsonAtoZ]

Which would be more accurate and correct. Gov't funding is just inflows and outflows of cash, you can't really say that "the sweep funded the Affordable Care Act," although it might be a little bit true.

[Luke 532]

Careful. He retracted in the past. This time he could say "I have never said FF's profits were used to pay for Ocare. I said they were used to pay for other parts of the government".

 

Agreed.  But keep in mind the Administration does have the documents that might connect the dots.  If there is one from the last administration that says something to the effect of "we need to take this from Fannie to pay for Obamacare or it will die" then that would be enough, in the court of public opinion at least, to say Fannie paid directly for Obamacare.  From an accounting standpoint, and I'm a former accountant, money is fungible of course.

 

I know Corsi is a whack job, but he mentioned that the White House told him that Obamacare paid for with Fannie money.  This was well after Trump had been in office and had access to the documents.  Trump was also more direct yesterday in his tweet where he said "Obamacare is dead..."  In the past he has said "It will die..." "it is going to die...", etc.  He knew about what was to be discussed in this morning's interview before it aired. 

 

Too much dot-connecting can be detrimental at times, but it seems prudent in this case.  And it's kind of fun. :-)

 

I can't believe the market is offering prefs at roughly 30% of par value in this environment... pretty amazing deal if you ask me.

[SnarkyPuppy]

Careful. He retracted in the past. This time he could say "I have never said FF's profits were used to pay for Ocare. I said they were used to pay for other parts of the government".

 

Agreed.  But keep in mind the Administration does have the documents that might connect the dots.  If there is one from the last administration that says something to the effect of "we need to take this from Fannie to pay for Obamacare or it will die" then that would be enough, in the court of public opinion at least, to say Fannie paid directly for Obamacare.  From an accounting standpoint, and I'm a former accountant, money is fungible of course.

 

I know Corsi is a whack job, but he mentioned that the White House told him that Obamacare paid for with Fannie money.  This was well after Trump had been in office and had access to the documents.  Trump was also more direct yesterday in his tweet where he said "Obamacare is dead..."  In the past he has said "It will die..." "it is going to die...", etc.  He knew about what was to be discussed in this morning's interview before it aired. 

 

Too much dot-connecting can be detrimental at times, but it seems prudent in this case.  And it's kind of fun. :-)

 

I can't believe the market is offering prefs at roughly 30% of par value in this environment... pretty amazing deal if you ask me.

 

What are your opinions on Craig Phillips?

[rros]

Careful. He retracted in the past. This time he could say "I have never said FF's profits were used to pay for Ocare. I said they were used to pay for other parts of the government".

 

Agreed.  But keep in mind the Administration does have the documents that might connect the dots.  If there is one from the last administration that says something to the effect of "we need to take this from Fannie to pay for Obamacare or it will die" then that would be enough, in the court of public opinion at least, to say Fannie paid directly for Obamacare.  From an accounting standpoint, and I'm a former accountant, money is fungible of course.

 

I know Corsi is a whack job, but he mentioned that the White House told him that Obamacare paid for with Fannie money.  This was well after Trump had been in office and had access to the documents.  Trump was also more direct yesterday in his tweet where he said "Obamacare is dead..."  In the past he has said "It will die..." "it is going to die...", etc.  He knew about what was to be discussed in this morning's interview before it aired. 

 

Too much dot-connecting can be detrimental at times, but it seems prudent in this case.  And it's kind of fun. :-)

 

I can't believe the market is offering prefs at roughly 30% of par value in this environment... pretty amazing deal if you ask me.

This trade is still plagued with risk, so 30% of par makes sense. Unless Mnuchin publicly states the administration supports shareholders' rights just like ICBA did lat week. But that may require a settlement, first. Should that happen, shares will fly. To bear in mind is the fact Mnuchin appears on Bartiromo's right after the government got funded till year's end. So what is the next hurdle? Obamacare replacement bill?

 

I seriously doubt there is a smoking gun of any kind. For sure Obama used FF for funding losses to insures therefore guaranteeing the survival of Obamacare. And Democrats' silence or even the support from the likes of Warren for nationalization may explain a secret pact among them. Specially considering they all believed HC would be President. Nationalization would have implied funding losses for a long time. But if anything like this took place must have been all verbal mafia-style. Like discussing it in the park while sitting on opposite benches and looking the other way.

[rros]

Careful. He retracted in the past. This time he could say "I have never said FF's profits were used to pay for Ocare. I said they were used to pay for other parts of the government".

 

Agreed.  But keep in mind the Administration does have the documents that might connect the dots.  If there is one from the last administration that says something to the effect of "we need to take this from Fannie to pay for Obamacare or it will die" then that would be enough, in the court of public opinion at least, to say Fannie paid directly for Obamacare.  From an accounting standpoint, and I'm a former accountant, money is fungible of course.

 

I know Corsi is a whack job, but he mentioned that the White House told him that Obamacare paid for with Fannie money.  This was well after Trump had been in office and had access to the documents.  Trump was also more direct yesterday in his tweet where he said "Obamacare is dead..."  In the past he has said "It will die..." "it is going to die...", etc.  He knew about what was to be discussed in this morning's interview before it aired. 

 

Too much dot-connecting can be detrimental at times, but it seems prudent in this case.  And it's kind of fun. :-)

 

I can't believe the market is offering prefs at roughly 30% of par value in this environment... pretty amazing deal if you ask me.

 

What are your opinions on Craig Phillips?

Craig Phillips is definitely controversial. But since he played such central role in f*ng up FF he may also know where to plug the holes. And that may be Mnuchin's idea. We really cannot say why he would float ideas from receivership to Corker/Warner to statu/quo. That, by itself, may mean nothing. I would only rely on what Mnuchin has been saying -and said today- from day 1: "as is", taxpayers are at risk.

[muscleman]

Here it is. He said it on tv:

 

https://mobile.twitter.com/AnthonyBonsigno/status/859003645198839810/video/1

 

So how can he justify another quarterly sweep after saying this??

 

Bartiromo: "There's been a conversation on Twitter and has been for a long time that President Obama needed money for Obamacare and he would take from all the agencies and he took from Fannie and Freddie.  Is that true?"

 

Mnuchin: "It's true.  They used the profits of Fannie and Freddie to pay for other parts of the government while they kept taxpayers at risk."

 

Mnuchin has been very vocal that one of his main goals with housing reform is to make sure the taxpayers are not at risk.  Here he makes a clear connection that using profits of GSE's to fund other programs keeps taxpayers at risk.

Careful. He retracted in the past. This time he could say "I have never said FF's profits were used to pay for Ocare. I said they were used to pay for other parts of the government".

 

I think the point is that he said "They used the profits of Fannie and Freddie to pay for other parts of the government while they kept taxpayers at risk.".

I think the most important thing is not whether the money is used to pay for Obamacare or some transgender male's prostate annual exam. The important thing is that he agreed taking profits from FnF will make tax payers at risk. Therefore it should be stopped.

 

 

[muscleman]

What are your opinions on Craig Phillips?

Craig Phillips is definitely controversial. But since he played such central role if f*ng up FF he may also know where to plug the holes. And that may be Mnuchin's idea. We really cannot say why he would float ideas from receivership to Corker/Warner to statu/quo. That, by itself, may mean nothing. I would only rely on what Mnuchin has been saying -and said today- from day 1: "as is", taxpayers are at risk.

 

I think floating all kinds of ideas is just trying to be thorough. They would have pros and cons written for each proposal. The problem is whether they have written the pros and cons objectively. If they do, the chp 11 plan and the Corker plan would be the worst compared to others.

[rros]

Here it is. He said it on tv:

 

https://mobile.twitter.com/AnthonyBonsigno/status/859003645198839810/video/1

 

So how can he justify another quarterly sweep after saying this??

 

Bartiromo: "There's been a conversation on Twitter and has been for a long time that President Obama needed money for Obamacare and he would take from all the agencies and he took from Fannie and Freddie.  Is that true?"

 

Mnuchin: "It's true.  They used the profits of Fannie and Freddie to pay for other parts of the government while they kept taxpayers at risk."

 

Mnuchin has been very vocal that one of his main goals with housing reform is to make sure the taxpayers are not at risk.  Here he makes a clear connection that using profits of GSE's to fund other programs keeps taxpayers at risk.

Careful. He retracted in the past. This time he could say "I have never said FF's profits were used to pay for Ocare. I said they were used to pay for other parts of the government".

 

I think the point is that he said "They used the profits of Fannie and Freddie to pay for other parts of the government while they kept taxpayers at risk.".

I think the most important thing is not whether the money is used to pay for Obamacare or some transgender male's prostate annual exam. The important thing is that he agreed taking profits from FnF will make tax payers at risk. Therefore it should be stopped.

Yes, that is my interpretation as well. Diverting companies' profits is the issue.

[investorG]

at the milken conference, mnuchin said his target for housing reform legislation is late 2017 or early 2018.

[Midas79]

at the milken conference, mnuchin said his target for housing reform legislation is late 2017 or early 2018.

 

I watched the clip, and I didn't hear Mnuchin say the word "legislation." Not only can he not affect that personally, I think getting Congress involved is worse for shareholders than the administration doing whatever they can.