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

[muscleman]

does anyone know when mnuchin's testimony is next week, or also when craig phillips is speaking (from the wsj article).

 

thank you

Craig Phillips is our next hurdle.

 

Given today's info, what's the likelihood that the Craig Phillips' proposal next week stuns us?

 

If Watt's positions today is inline with Mnuchin, then Craig's proposal should be fine.

But Watt repeatedly addressed that he wants to work with treasury instead of he "dancing himself".

 

On the other hand, members here pointed out that Watt wanted Treasury to be in the driver seat.

[hardincap]

not much changed today imo. we got to see a bit of the drama happening behind curtains but what really matters is phillips and mnuchins testimonies and their recommendations to trump on housing reform

[investorG]

I believe Mnuchin and Phillips are in a good position to shape things --- the committee is not terribly sophisticated and is certainly not in agreement.  However their power increases materially later in the year, all things equal, and so a long year of roller coaster debate is likely with some court case noise in the background. 

 

[investorG]

not much changed today imo. we got to see a bit of the drama happening behind curtains but what really matters is phillips and mnuchins testimonies and their recommendations to trump on housing reform

 

I disagree - given the congressional R's obsession against the GSEs and Mnuchin's limited power regarding the sr preferred through year end, I believe the only action one could realistically hope for this year is stopping or altering the sweep, which is now officially in play.  And Mel Watt, for today at least, was more friend than foe in his answers, I was impressed with him today.

 

edit: I do also think phillips and mnuchin's comments are also extremely important because they will shape the final reform.

[orthopa]

We know for sure Phillips testifies next week?

[hardincap]

btw, no corker didnt storm out to "probably cover his short". he had another vote to attend as crapo explained. its amazing to me how delusional and cult-like #fanniegate has become.. like straight out of cialdini's "psychology of influence"

[orthopa]

btw, no corker didnt storm out to "probably cover his short". he had another vote to attend as crapo explained. its amazing to me how delusional and cult-like #fanniegate has become.. like straight out of cialdini's "psychology of influence"

 

I certainly think its a stretch he was trading a position but there is no doubt he was unhappy and frustrated when he left.

[orthopa]

If Watt has assured that stopping the NWS does not mean recap and release why is Corker so against the sweep stopping? For some reason that really bothers him as clearly displayed today and in his previous letter regarding the Q1 dividend.

[Luke 532]

btw, no corker didnt storm out to "probably cover his short". he had another vote to attend as crapo explained. its amazing to me how delusional and cult-like #fanniegate has become.. like straight out of cialdini's "psychology of influence"

 

I'm pretty sure it's a joke, hardincap.

[hardincap]

@luke, im not so sure, given #fanniegate's history of wild accusations, jumping to conclusions, conspiracy theories, passing off speculation as fact, and ad hominem attacks against anyone who expresses anything even remotely anti gse or court cases. its become pretty sad and pathetic. they brand themselves as seeking truth and justice but lets be honest, most of them are really a bunch of wreckless gamblers trying to get rich quick

[SnarkyPuppy]

@luke, im not so sure, given #fanniegate's history of wild accusations, jumping to conclusions, conspiracy theories, passing off speculation as fact, and ad hominem attacks against anyone who expresses anything even remotely anti gse or court cases. its become pretty sad and pathetic. they brand themselves as seeking truth and justice but lets be honest, most of them are really a bunch of wreckless gamblers trying to get rich quick

 

concur

[Desert_Rat]

I don't know, kinda looks like Watt just went rogue.

 

It didn't appear he had Mnuchin's blessings, and Crapo is probably right that a draw would be inconsequential to housing.  I think he's done waiting on Congress to sit around for another couple decades doing nothing and has put his foot down. I also didn't get the impression that this action changed much. I can't see him paying dividends for the remaining year because 1/1/2018 is right around the corner, but I doubt anything is changed until then.

 

As far as Crapo's comment about 'something's changed', I'd say that's just typical whiny Crapo whose ideas on reform have been tossed out by just about everyone.

[investorG]

I don't know, kinda looks like Watt just went rogue.

 

It didn't appear he had Mnuchin's blessings, and Crapo is probably right that a draw would be inconsequential to housing.  I think he's done waiting on Congress to sit around for another couple decades doing nothing and has put his foot down. I also didn't get the impression that this action changed much. I can't see him paying dividends for the remaining year because 1/1/2018 is right around the corner, but I doubt anything is changed until then.

 

As far as Crapo's comment about 'something's changed', I'd say that's just typical whiny Crapo whose ideas on reform have been tossed out by just about everyone.

 

I don't see it as he went rogue, more like doing his job, and I'm curious why you think he didn't have mnuchin's blessing.

 

All I heard was watt didn't want the congressman encouraging mnuchin not to negotiate with watt to build a capital cushion through minorly adjusting the agreement, so he could dance with 2 people instead of one (unilaterally withholding dividends).

[Desert_Rat]

Sure, doing his job. That works.

 

I say that he's without Mnuchin's blessing because he was asked what right he thought he had to proceed without it.

[onyx1]

https://www.c-span.org/video/?428337-1/mel-watt-testifies-housing-finance-policy

 

Start at 39:15

 

Tester asks Watt if anyone from Admin has talked to him about a capital buffer amount.  Answer: Yes.

 

Look at the Cheshire Cat grin on Watts' face when time ran out and he avoided having to answer the question about the size of the buffer Mnuchin suggested.

 

My read is that Mnuchin supports Watt here. 

[waynepolsonAtoZ]

Watt has been consistent about what he's been saying for about a year. Mnuchin has not. I think the problem with Mnuchin (and Phillips) is that they've possibly been captured by the AIG and GS crowd that hates FnF. Which is not to say that the situation with Mnuchin is hopeless--I do think that something will happen before the end of the year.

[waynepolsonAtoZ]

As a former regulatory staffer (admittedly, public utility industry), I gotta say I'm glad Watt is "on our side" [in a loose sense in that he is saying that the NWS can cause problems via zeroing out capital, which could lead to a draw.] The SPSPAs are a joint product of Tsy and FHFA, with Tsy taking the lead, but Watt can at least try to get them moving in the right direction.

 

It will be interesting to see what Mnuchin shows when he puts his card on the table.

 

I haven't watched the video yet though, so it will be interesting to see exactly how Watt came across on the stand.

[orthopa]

I encourage those following this re watch the corker/watt exchange. Corker is very concerned  and says Watt wanting to stop the dividend is concerning to him because it looks like the Admin is taking a different approach and not working with "us and others" to move ahead with reform but all of a sudden a unilateral step by you....it just creates a different direction, which sends a signal to the world that something different is occuring when its not.

 

Watt uses his airbag analogy again and says the risk is small...corker tells him to just draw on it and see what happens then watt says "but I just dont under stand, understand why...(my assumption would be that  why is with holding the div such a big problem)

 

Disgusted with the reply Corker says its one of the most baseless arguments he has ever heard....no other company would be worried about market fluctuations...but something has happened recently, I don't know what it is...

 

 

Corker more then anyone detests holding the div. Does this signal something specific? Does he feel like it circumvents the jump start bill or him directly? Why does he feel so strongly? I cant help but think back to when Warner said he did not trust Mnuchin to act alone during his diatribe before the Mnunchin confirmation vote. Dont forget Mnuchin did not promise to not act alone during his testimony too.  :) :)

 

Its all coming together a bit here.....

 

The link I provided earlier said rumor was POTUS told him his input not needed on FnF. Doesn't seem to be all that far off no?

 

Addendum...Corker must just be afraid retaining capital builds momentum to free the GSE's in light of low chance legislation is done? Right? As much as I think this is a long shot Corker must not. What do we do with GSEs building capital towards the end of the year with no legislative solution to change them????

[Eye4Valu]

I encourage those following this re watch the corker/watt exchange. Corker is very concerned  and says Watt wanting to stop the dividend is concerning to him because it looks like the Admin is taking a different approach and not working with "us and others" to move ahead with reform but all of a sudden a unilateral step by you....it just creates a different direction, which sends a signal to the world that something different is occuring when its not.

 

Watt uses his airbag analogy again and says the risk is small...corker tells him to just draw on it and see what happens then watt says "but I just dont under stand, understand why...(my assumption would be that  why is with holding the div such a big problem)

 

Disgusted with the reply Corker says its one of the most baseless arguments he has ever heard....no other company would be worried about market fluctuations...but something has happened recently, I don't know what it is...

 

 

Corker more then anyone detests holding the div. Does this signal something specific? Does he feel like it circumvents the jump start bill or him directly? Why does he feel so strongly? I cant help but think back to when Warner said he did not trust Mnuchin to act alone during his diatribe before the Mnunchin confirmation vote. Dont forget Mnuchin did not promise to not act alone during his testimony too.  :) :)

 

Its all coming together a bit here.....

 

The link I provided earlier said rumor was POTUS told him his input not needed on FnF. Doesn't seem to be all that far off no?

 

Addendum...Corker must just be afraid retaining capital builds momentum to free the GSE's in light of low chance legislation is done? Right? As much as I think this is a long shot Corker must not. What do we do with GSEs building capital towards the end of the year with no legislative solution to change them????

 

+1 It creates positive momentum to recap and release, which is a non-starter for Corker/Crapo.

[undervalued]

https://www.c-span.org/video/?428337-1/mel-watt-testifies-housing-finance-policy

 

Watts looks annoyed explaining to Corker at the 30min mark.

 

Watts: We're about to fall off a cliff. If we don't do something we're going to fall.

Corker: Why do you want to change direction?

Watts: We're about to fall off a cliff. If we don't do something we're going to fall.

Corker: Why don't you try jumping?

Watts: It's going to be me who died.

Corker: It's the most baseless argument I've ever heard.

Watts: ???!!?!?

[waynepolsonAtoZ]

Corker maybe is taking things to personal? He does blame the hedge funds, after all, for digging up dirt on him. It may shape his thinking a bit. It doesn't help him in terms of looking credible. 

[Guest cherzeca]

Corker maybe is taking things to personal? He does blame the hedge funds, after all, for digging up dirt on him. It may shape his thinking a bit. It doesn't help him in terms of looking credible.

 

I haven't seen the video but I agree the more corker appears emotionally involved the less credibility he has. Suggesting watt make a $10B draw to see what happens makes corker look especially unserious

[waynepolsonAtoZ]

I mean, January 1, 2018 matters as there will be no book equity capital at all. 2028 matters as the SPSPAs are scheduled to end.

 

So, the mere passage of time. There's no real mystery to it.

 

And, I agree with Watt that a draw would matter although I agree with Corker that it wouldn't be the end of the world.

 

Still, why run the risk? Also, Corker misunderstands, he was talking about running his business with very little cash on hand. That's different from not having some book equity capital. If you run out of cash and you have zero book equity capital the smallest shock can create a financial crisis for the firm.

[muscleman]

Also, Corker misunderstands, he was talking about running his business with very little cash on hand. That's different from not having some book equity capital. If you run out of cash and you have zero book equity capital the smallest shock can create a financial crisis for the firm.

 

Yeah. I just listened to the video again and had the same impression. I think Corker is trying to mislead intentionally. I don't think he is confused about these basic concepts.

[Desert_Rat]

FWIW, it appeared that Watt and Corker had the same conversation many times before and Watt was just blowing him off in light of that. He wasn't about to change his mind now and Corker knew it.

 

As far as Watt being our best pal now, I prefer my GSE supporters to be steadfast with 30 year's and financing lower income folk, as they are our salvation. Watt didn't impress me as particularly interested in either. Or better said, he seems most interested in just doing his job as conservator well.