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

[Guest cherzeca]

I guess the backstop to all of this is Mnuchin.  I'm assuming this is like any new legislation which goes to the White House and would allow Trump (Mnuchin) to veto?

 

This is a good point and one that I think those bearish on Fannie/Freddie due to a bad law being passed are overlooking/discounting.  If any legislation that makes its way through Congress wouldn't protect tax payers and prevent future bailouts, in the eyes of Mnuchin, then he'd likely put a stop to it before it became law.

 

unless congress tucks some reform bill into a package with tax reform and then tries to push it through under reconciliation.  though i dont think you will see a tax package come together this year.  republicans are beginning to despise other republicans almost as much as democrats

[SnarkyPuppy]

And another (very improbable outcome here) question:

 

If the shares get wiped through some administrative change, and Fairholme wins a SCOTUS trial, does Fairholme's get paid?  Do all shareholders at "bankruptcy" get paid?

[waynepolsonAtoZ]

HERA of 2008 is a bad enough law (as interpreted by the courts) to be worried.

 

Recap seems inevitable but maybe later not sooner.

 

There has been no absolutely explicit taking so far. NWS is very close to being explicit, but not quite. So, the court of claims case is a little uncertain.

 

I still like the DE case pretty well though.

 

Sincerely yours.

 

Debbie Downer

 

 

[Eye4Valu]

Fairholme conference call transcript is out.

 

http://www.fairholmefundsinc.com/Documents/ConferenceCall20170629.pdf

[SnarkyPuppy]

I guess the backstop to all of this is Mnuchin.  I'm assuming this is like any new legislation which goes to the White House and would allow Trump (Mnuchin) to veto?

 

This is a good point and one that I think those bearish on Fannie/Freddie due to a bad law being passed are overlooking/discounting.  If any legislation that makes its way through Congress wouldn't protect tax payers and prevent future bailouts, in the eyes of Mnuchin, then he'd likely put a stop to it before it became law.

 

I wonder what Putin's position on the affordable 30 yr fixed for Americans is?  :D

[waynepolsonAtoZ]

Putin is interested in undermining American institutions (e.g., elections), so it's probably reasonable to assume that he would want to underline the 30-year fixed price mortgage, which, after all, is crucial to supporting the ability of the middle class to own their own home.

[rros]

Putin is interested in undermining American institutions (e.g., elections), so it's probably reasonable to assume that he would want to underline the 30-year fixed price mortgage, which, after all, is crucial to supporting the ability of the middle class to own their own home.

I think many underestimate Trump. It is not just him. He is surrounded by smart, domineering, aggressive cabinet members. Maybe his policy in regards to Russia is simply keeping enemies closer besides a big 'thank you' to Putin for helping him win the election. In this regard, it may not matter much what Putin is up to.

 

The big, near term risk we face is Congress (Corker, Warner) coming out with some simple bill to neutralize any effect of earnings retention in our shares. There will be retention before the year's end for sure. Watt will absolutely not allow zero net worth by January 2018. Neither, I think, Mnuchin.

[undervalued]

I saw this script posted in SRG thread. I thought this thread will get some good info from it also. http://www.fairholmefundsinc.com/Documents/ConferenceCall20170629.pdf

[waynepolsonAtoZ]

Lots of great info (I bought roughly 5000 shares of FMCKI this am after skimming it). Anyway, David Thompson is great.

 

Interesting that they are now involved in cases at the 5, 6, 7, and 8th circuits. I guess they are appellate guys so the litigants in the cases added them to their teams once they went to the appeals court level.

 

 

[Guest cherzeca]

Lots of great info (I bought roughly 5000 shares of FMCKI this am after skimming it). Anyway, David Thompson is great.

 

Interesting that they are now involved in cases at the 5, 6, 7, and 8th circuits. I guess they are appellate guys so the litigants in the cases added them to their teams once they went to the appeals court level.

 

my guess is that someone is funding the appeals, on condition that this person chooses counsel

[Desert_Rat]

Putin is interested in undermining American institutions (e.g., elections), so it's probably reasonable to assume that he would want to underline the 30-year fixed price mortgage, which, after all, is crucial to supporting the ability of the middle class to own their own home.

 

Well fancy that, so is America! As far as what he thinks of our 30 year, I doubt his interest runs that deep. Disposing of war-mongering Hillary was enough.

 

 

 

[Desert_Rat]

I saw this script posted in SRG thread. I thought this thread will get some good info from it also. http://www.fairholmefundsinc.com/Documents/ConferenceCall20170629.pdf

 

DR

 

There is no good info, there is only time. What you have to ask yourself is one question: "Do you have the patience?" Well, do you, punk?

 

[SnarkyPuppy]

Still concerned about any settlements which ultimately only benefit plaintiffs.  Scenario where shareholders are wiped but subsequent wins occur (for instance, in SCOTUS) whereby a settlement occurs leaving retail shareholders with nothing.  Probably a non event but I'm totally an amateur from a legal perspective

[Flynnstone5]

Bought half of what I sold in prfd's back. I have to bet Mnuchin acts with common sense and that admin is not going to give up $ avail. Still worried about crooks and incompetence of the Corkers/Hensarlings.

[Guest cherzeca]

Bought half of what I sold in prfd's back. I have to bet Mnuchin acts with common sense and that admin is not going to give up $ avail. Still worried about crooks and incompetence of the Corkers/Hensarlings.

 

understand this, but wonder how much (positive) weighting to put on notion that congress appears incapable of doing anything at moment.  feeds into thesis that administration is just giving congress rope on gse reform and congress is getting near out of rope

[beaufort]

IMF news:

 

The Federal Housing Finance Agency announced a $5.50 billion settlement with the Royal Bank of Scotland on Wednesday. The settlement stemmed from a 2011 lawsuit over non-agency mortgage-backed securities that Fannie Mae and Freddie Mac purchased from RBS leading up to the housing crisis.

Under the terms of the settlement, RBS will pay approximately $4.53 billion to Freddie and approximately $975 million to Fannie.

[rros]

Bought half of what I sold in prfd's back. I have to bet Mnuchin acts with common sense and that admin is not going to give up $ avail. Still worried about crooks and incompetence of the Corkers/Hensarlings.

 

understand this, but wonder how much (positive) weighting to put on notion that congress appears incapable of doing anything at moment.  feeds into thesis that administration is just giving congress rope on gse reform and congress is getting near out of rope

Chris, with all due respect, judging by the Jumpstart Act Congress is never out of rope. Even if we get to 12/31/17 with no bills on the table a harsh action by Mnuchin or Watt could trigger a last minute reaction. Then, we will again see swift crap coming our way.

 

My hope is that Corker is beginning to understand the WH is not supporting his efforts/goals as Obama did and that the FHFA has its own power to act and it is not in the same page he is. With the balance of power shifting a more reasonable Corker may decide to adjust accordingly. It is just a hope...

[SnarkyPuppy]

Bought half of what I sold in prfd's back. I have to bet Mnuchin acts with common sense and that admin is not going to give up $ avail. Still worried about crooks and incompetence of the Corkers/Hensarlings.

 

understand this, but wonder how much (positive) weighting to put on notion that congress appears incapable of doing anything at moment.  feeds into thesis that administration is just giving congress rope on gse reform and congress is getting near out of rope

Chris, with all due respect, judging by the Jumpstart Act Congress is never out of rope. Even if we get to 12/31/17 with no bills on the table a harsh action by Mnuchin or Watt could trigger a last minute reaction. Then, we will again see swift crap coming our way.

 

My hope is that Corker is beginning to understand the WH is not supporting his efforts/goals as Obama did and that the FHFA has its own power to act and it is not in the same page he is. With the balance of power shifting a more reasonable Corker may decide to adjust accordingly. It is just a hope...

 

Wouldn't he be aware of the shift at this point?  Why is he so optimistic about reform being passed if he believes he's lost leverage? 

 

My sense is Mnuchin either hasn't been straight with him (sure bob, we think you're solution is great) or Mnuchin has decided that he can gain political capital by giving into any corker/warner legislation for areas with more public visibility - healthcare and tax reform - which will have more importance in determining Mnuchins legacy in the eyes of the public.  Could make an argument that his incentives (maybe guided by trump) are to give in to housing reform and use that capital to gain votes on tax reform/healthcare. 

[Guest cherzeca]

Bought half of what I sold in prfd's back. I have to bet Mnuchin acts with common sense and that admin is not going to give up $ avail. Still worried about crooks and incompetence of the Corkers/Hensarlings.

 

understand this, but wonder how much (positive) weighting to put on notion that congress appears incapable of doing anything at moment.  feeds into thesis that administration is just giving congress rope on gse reform and congress is getting near out of rope

Chris, with all due respect, judging by the Jumpstart Act Congress is never out of rope. Even if we get to 12/31/17 with no bills on the table a harsh action by Mnuchin or Watt could trigger a last minute reaction. Then, we will again see swift crap coming our way.

 

My hope is that Corker is beginning to understand the WH is not supporting his efforts/goals as Obama did and that the FHFA has its own power to act and it is not in the same page he is. With the balance of power shifting a more reasonable Corker may decide to adjust accordingly. It is just a hope...

 

hear that.  my fear is that some BS is included in the budget bill, which is passed through reconciliation in senate with 50 votes.  since fhfa self-funds with fees charged gses, it wouldnt re regarding fhfa appropriation, but yes it could be some kind of BS that corker once again pulls

[waynepolsonAtoZ]

Corker has an election coming up in 2018. Will someone run attack ads against him? I'm guessing yes.

[rros]

Corker has an election coming up in 2018. Will someone run attack ads against him? I'm guessing yes.

Might mean the end of his career as politician. If he makes the wrong move today.

[Guest cherzeca]

Corker has an election coming up in 2018. Will someone run attack ads against him? I'm guessing yes.

Might mean the end of his career as politician. If he makes the wrong move today.

 

I gather that if corker is exposed it is because he has become too D.C. For the Tennessee folk

[Flynnstone5]

Bought half of what I sold in prfd's back. I have to bet Mnuchin acts with common sense and that admin is not going to give up $ avail. Still worried about crooks and incompetence of the Corkers/Hensarlings.

 

understand this, but wonder how much (positive) weighting to put on notion that congress appears incapable of doing anything at moment.  feeds into thesis that administration is just giving congress rope on gse reform and congress is getting near out of rope

Chris, with all due respect, judging by the Jumpstart Act Congress is never out of rope. Even if we get to 12/31/17 with no bills on the table a harsh action by Mnuchin or Watt could trigger a last minute reaction. Then, we will again see swift crap coming our way.

 

My hope is that Corker is beginning to understand the WH is not supporting his efforts/goals as Obama did and that the FHFA has its own power to act and it is not in the same page he is. With the balance of power shifting a more reasonable Corker may decide to adjust accordingly. It is just a hope...

 

Wouldn't he be aware of the shift at this point?  Why is he so optimistic about reform being passed if he believes he's lost leverage? 

 

My sense is Mnuchin either hasn't been straight with him (sure bob, we think you're solution is great) or Mnuchin has decided that he can gain political capital by giving into any corker/warner legislation for areas with more public visibility - healthcare and tax reform - which will have more importance in determining Mnuchins legacy in the eyes of the public.  Could make an argument that his incentives (maybe guided by trump) are to give in to housing reform and use that capital to gain votes on tax reform/healthcare.

 

Healthcare and taxes are certainly important, but I can't believe Mnuchin would go along with a plan like Corker/Warner. It would pose great unknown risk to the market and more importantly would drive up rates, which would have a negative effect on home ownership, home values, construction, etc. Corkers a snake though so could certainly see him trying to stuff some last minute shit in a larger bill.

[SnarkyPuppy]

Bought half of what I sold in prfd's back. I have to bet Mnuchin acts with common sense and that admin is not going to give up $ avail. Still worried about crooks and incompetence of the Corkers/Hensarlings.

 

understand this, but wonder how much (positive) weighting to put on notion that congress appears incapable of doing anything at moment.  feeds into thesis that administration is just giving congress rope on gse reform and congress is getting near out of rope

Chris, with all due respect, judging by the Jumpstart Act Congress is never out of rope. Even if we get to 12/31/17 with no bills on the table a harsh action by Mnuchin or Watt could trigger a last minute reaction. Then, we will again see swift crap coming our way.

 

My hope is that Corker is beginning to understand the WH is not supporting his efforts/goals as Obama did and that the FHFA has its own power to act and it is not in the same page he is. With the balance of power shifting a more reasonable Corker may decide to adjust accordingly. It is just a hope...

 

Wouldn't he be aware of the shift at this point?  Why is he so optimistic about reform being passed if he believes he's lost leverage? 

 

My sense is Mnuchin either hasn't been straight with him (sure bob, we think you're solution is great) or Mnuchin has decided that he can gain political capital by giving into any corker/warner legislation for areas with more public visibility - healthcare and tax reform - which will have more importance in determining Mnuchins legacy in the eyes of the public.  Could make an argument that his incentives (maybe guided by trump) are to give in to housing reform and use that capital to gain votes on tax reform/healthcare.

 

Healthcare and taxes are certainly important, but I can't believe Mnuchin would go along with a plan like Corker/Warner. It would pose great unknown risk to the market and more importantly would drive up rates, which would have a negative effect on home ownership, home values, construction, etc. Corkers a snake though so could certainly see him trying to stuff some last minute shit in a larger bill.

 

Perception != reality. Rises in homeowner rates can be blamed on other things (Fed) and systemic risks to the housing sector will not be as transparent to public as failure to pass healthcare/tax

[Midas79]

Wouldn't he be aware of the shift at this point?  Why is he so optimistic about reform being passed if he believes he's lost leverage? 

 

The danger is that Corker doesn't have to get an entire reform bill passed to screw shareholders, he just needs to sneak in another Jumpstart-like rider in a bill that only needs 51 votes.

 

Corker has an election coming up in 2018. Will someone run attack ads against him? I'm guessing yes.

 

We might have an opportunity here. Painting Corker's efforts to kill Fannie and Freddie as being beholden to Wells Fargo and the rest of the TBTF banks could be an effective strategy. Corker would then have to choose between continuing his anti-GSE efforts and actually trying to get re-elected.