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

[Luke 532]

This would be ideal.  Bill passes and Corker is the only R that votes against it.  This was tweeted just moments ago... around 4:50pm Eastern time.

 

Chad Pergram‏Verified account @ChadPergram

4m4 minutes ago

 

With Corker as a no, we expect the tax bill vote to likely be 51-49 with Corker as the only GOP nay

[rros]

Draft

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

 

A search for gse/conservator/fannie/freddie/fhfa/warrants yields no results. Looks like the revised bill might be ready later tonight. Will the revised bill include all the amendments?

 

---- OT

 

PART VIII-INDIVIDUAL MANDATE

SEC. 11081. ELIMINATION OF SHARED RESPONSIBILITY

PAYMENT FOR INDIVIDUALS FAILING TO

MAINTAIN MINIMUM ESSENTIAL COVERAGE.

 

(a) IN GENERAL.-Section 5000A© is amended- (1) in paragraph (2)(B)(iii), by striking "2.5 percent" and inserting "Zero percent", and (2) in paragraph (3)- (A) by striking "$695" m subparagraph (A) and inserting "$0", and (B) by striking subparagraph (D).

 

 

My medical insurance went from $350/m before ACA to $1300+/m. A mess.

[Guest cherzeca]

@emily section relates to depreciation of public utility property

[doughishere]

https://www.housingwire.com/articles/41727-republican-tax-plan-will-trigger-another-fannie-freddie-bailout

[Luke 532]

https://www.housingwire.com/articles/41727-republican-tax-plan-will-trigger-another-fannie-freddie-bailout

 

Yes, we know. That's the impetus for action from Mnuchin and the Trump Administration.  They have clearly said no bailouts, protect taxpayers, GSE's aren't going away, etc. 

[SnarkyPuppy]

Well if this is not a catalyst for something to happen, I don't know what is.  Mnuchin likely has the opportunity to show all his cards shortly

[Luke 532]

Well if this is not a catalyst for something to happen, I don't know what is.  Mnuchin likely has the opportunity to show all his cards shortly

 

Agreed on many fronts.  With tax reform (nearly) completed, Mnuchin has less reason to toe-the-line and play both sides (as he was likely trying to do to get tax reform votes).  Also, jumpstart is expiring, Congress goes on break on December 18th, the capital dwindles to $0 soon, etc.  He has already (almost) achieved the most important thing on his agenda, the tax reform.  Much of the political reasons to not act on his own is now gone.  Sure, there are always political implications to acting on his own but not nearly as much as existed yesterday morning.

[Guest cherzeca]

i wonder if watt/mnuchin are so chill about this forthcoming large DTA hit because they will waive the provision of the PSPA requiring a draw if deficit capital.  FnF are nicely cash flow positive and the hit is all noncash.  it's a nonevent but for that pesky capital calculation...

[rros]

On page 106-107, are they not talking about DTA's?

 

Draft

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

 

A search for gse/conservator/fannie/freddie/fhfa/warrants yields no results. Looks like the revised bill might be ready later tonight. Will the revised bill include all the amendments?

 

---- OT

 

PART VIII-INDIVIDUAL MANDATE

SEC. 11081. ELIMINATION OF SHARED RESPONSIBILITY

PAYMENT FOR INDIVIDUALS FAILING TO

MAINTAIN MINIMUM ESSENTIAL COVERAGE.

 

(a) IN GENERAL.-Section 5000A© is amended- (1) in paragraph (2)(B)(iii), by striking "2.5 percent" and inserting "Zero percent", and (2) in paragraph (3)- (A) by striking "$695" m subparagraph (A) and inserting "$0", and (B) by striking subparagraph (D).

 

 

My medical insurance went from $350/m before ACA to $1300+/m. A mess.

What Chris said. That language would be a really arcane way of dealing with such a simple problem.

Looks like this is the final bill voted on this morning around 2am: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

 

A search for the words above including DTA yields nothing. There is, however, language for net operating losses carryovers (nols) but this is expected in a tax bill. I would have expected that nols related to the GSEs would have been addressed individually and separately, like nols of insurance companies in this bill. But no reference to Fannie/Freddie/FHFA. I hope I am right.

 

With Corker now a pariah and an invisible Senator for the rest of his term, should we get excited about Monday's opening?

 

The window of oppo for Corker to do anything prior to sending the final bill to Trump seems now non-existent. Just as supporting any of his reform plans. Will he and Warner get railroaded? What else is to fear? SCOTUS not taking our cases? A grenade coming out of left field by Gary Cohn, although he also seems on the way out?

[investorG]

On page 106-107, are they not talking about DTA's?

 

Draft

https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

 

A search for gse/conservator/fannie/freddie/fhfa/warrants yields no results. Looks like the revised bill might be ready later tonight. Will the revised bill include all the amendments?

 

---- OT

 

PART VIII-INDIVIDUAL MANDATE

SEC. 11081. ELIMINATION OF SHARED RESPONSIBILITY

PAYMENT FOR INDIVIDUALS FAILING TO

MAINTAIN MINIMUM ESSENTIAL COVERAGE.

 

(a) IN GENERAL.-Section 5000A© is amended- (1) in paragraph (2)(B)(iii), by striking "2.5 percent" and inserting "Zero percent", and (2) in paragraph (3)- (A) by striking "$695" m subparagraph (A) and inserting "$0", and (B) by striking subparagraph (D).

 

 

My medical insurance went from $350/m before ACA to $1300+/m. A mess.

What Chris said. That language would be a really arcane way of dealing with such a simple problem.

Looks like this is the final bill voted on this morning around 2am: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rXqXuQfYbRas/v0

 

A search for the words above including DTA yields nothing. There is, however, language for net operating losses carryovers (nols) but this is expected in a tax bill. I would have expected that nols related to the GSEs would have been addressed individually and separately, like nols of insurance companies in this bill. But no reference to Fannie/Freddie/FHFA. I hope I am right.

 

With Corker now a pariah and an invisible Senator for the rest of his term, should we get excited about Monday's opening?

 

The window of oppo for Corker to do anything prior to sending the final bill to Trump seems now non-existent. Just as supporting any of his reform plans. Will he and Warner get railroaded? What else is to fear? SCOTUS not taking our cases? A grenade coming out of left field by Gary Cohn, although he also seems on the way out?

 

nope

[rros]

Hope Capuano pushes his bill forward. Corker has no support from his party or his state.

 

http://www.timesfreepress.com/news/politics/state/story/2017/dec/02/poll-corkers-support-among-tennessee-voters-d/458336/

 

 

 

My gut says Corker is trying to sneak in something for large banks in the bill. He likes the drama and will vote no on tax bill if he doesn't get his way. Oh well, they can get away with his no vote, it is 52-50.

 

http://thehill.com/policy/finance/362589-corker-no-agreement-yet-on-debt-trigger-in-tax-bill

Or someone can resurrect Mulvaney's.

[waynepolsonAtoZ]

"What else is to fear?"

The thing to fear is that Rs hate FnF.

[rros]

"What else is to fear?"

The thing to fear is that Rs hate FnF.

Wayne, i am in a happy mood tonight so I will dream that hating FF implies shutting them down and a big gift to the preferreds. Either by renewed and stronger court cases or by paying them out. But I admit, the hatred was a big oversight of mine. I got blindsided by Corker's defeat.

[Midas79]

"What else is to fear?"

The thing to fear is that Rs hate FnF.

 

Then what explains the RNC resolution? The fact that it seems to be toothless?

[waynepolsonAtoZ]

Here is another thing. https://www.nytimes.com/2017/12/03/us/politics/government-shutdown-republicans-congress-spending.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0

 

My thought being they aren't going to give up on the sweep unless they have to. I see a correction coming in terms of the valuation of the preferreds in the market. However, I'm 100 percent out of the FnF preferreds, so take it as you will.

 

 

[rros]

Here is another thing. https://www.nytimes.com/2017/12/03/us/politics/government-shutdown-republicans-congress-spending.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0

 

My thought being they aren't going to give up on the sweep unless they have to. I see a correction coming in terms of the valuation of the preferreds in the market. However, I'm 100 percent out of the FnF preferreds, so take it as you will.

You may be right. And the hatred to FF by R may be overwhelming. But my simple, back of the envelope thesis on which to base this bet is "what is the most disruptive thing that can happen to the real estate market from now on? And what is the least disruptive?" Actions may be based on this as opposed to ideology.

 

Markets may soon peak, a correction may follow. Earnings may struggle next year with close to full employment. Igniting the economy may mean higher interest rates faster. Amid this picture, interfering with the real estate market could bust the economy. Mnuchin, being an expert and at 30,000 feet might have a different take. But then, he might not. The worst possible scenario for R's come the elections next year would be the start of a recession. Staying in power may override FF's hatred.

[Luke 532]

MBA’s Stevens Rips Trump on Twitter

 

http://nationalmortgageprofessional.com/news/65300/stevens-rips-trump-twitter

 

Someone is angry as he also didn't get his wish. He thought Corker would help out but...interesting that each of Corker's tweet is published on Stevens twitter feed.

 

The following things certainly seem interesting, especially since they have all transpired since late October.  Corker and Stevens are arguably the most well-known anti-GSE personalities in their fields, respectively politics and the mortgage industry.

 

-Corker's public feud with Trump via Twitter.

-Corker's opposing views to Watt ("why not just draw $10B and see what happens?").

-Corker only Republican no vote on the recent tax reform.

-Stevens is publicly against Trump via the recent tweets.

-Stevens doesn't like Watt (see attached image).

 

This has all happened in the past 6 weeks.  The opposition to Fannie/Freddie seems to be getting anxious and they are lashing out.  I like the fact that Corker/Stevens do not like Trump/Watt.  I would be more concerned if the former pair liked the latter pair.

 

Edit: The Corker/Watt exchange wasn't 6 weeks ago... that was in May.

[SnarkyPuppy]

The GSE (Fannie/Freddie) #mortgage model is “wrong, broken, irreparable...it needs to be scrapped.” Per @RepHensarling  speaking @nardotrealtor conference.

 

Chair Hensarling: gse reforms still under consideration in House, but F/F must be wound down and their charters repealed.

 

 

 

Should be interesting to see how this is twisted as bullish

[TonyG]

isn't he retiring?

 

check out Rob Zimmer's twitter. He said "Sen Heitkamp: Sens Corker, Warner very busy w/Foreign Affairs, Intel Committees; may limit bandwidth on addressing Gse Reform in near term."

 

if the above tweet is true, how are they supposedly coming out with a gse reform bill soon?

[SnarkyPuppy]

isn't he retiring?

 

check out Rob Zimmer's twitter. He said "Sen Heitkamp: Sens Corker, Warner very busy w/Foreign Affairs, Intel Committees; may limit bandwidth on addressing Gse Reform in near term."

 

if the above tweet is true, how are they supposedly coming out with a gse reform bill soon?

 

In a year?  If he's apathetic why say anything?

[Guest cherzeca]

The GSE (Fannie/Freddie) #mortgage model is “wrong, broken, irreparable...it needs to be scrapped.” Per @RepHensarling  speaking @nardotrealtor conference.

 

Chair Hensarling: gse reforms still under consideration in House, but F/F must be wound down and their charters repealed.

 

 

 

Should be interesting to see how this is twisted as bullish

 

it's bullish because it means HFSC will get nothing done while he is chair or has any influence

[investorG]

The GSE (Fannie/Freddie) #mortgage model is “wrong, broken, irreparable...it needs to be scrapped.” Per @RepHensarling  speaking @nardotrealtor conference.

 

Chair Hensarling: gse reforms still under consideration in House, but F/F must be wound down and their charters repealed.

 

 

 

Should be interesting to see how this is twisted as bullish

 

all of this is like having a board meeting before a newly-installed chairman comes into the room -- while the discussion is interesting, it's merely the prelude.  imo the stopwatch starts whenever tax reform is completed (or fails) and mnuchin / phillips address the elephant in 1h 2018.  mnuchin has already said, recently, he doesn't support shutting down FnF (and phillips mentioned getting them out of conservatorship eventually) -- so we all want to know what does mnuchin want and also is he going to take the lead or follow congress.  in the mean time, we're adrift with buyers sucked in only when prices decline.

 

[investorG]

The GSE (Fannie/Freddie) #mortgage model is “wrong, broken, irreparable...it needs to be scrapped.” Per @RepHensarling  speaking @nardotrealtor conference.

 

Chair Hensarling: gse reforms still under consideration in House, but F/F must be wound down and their charters repealed.

 

 

 

Should be interesting to see how this is twisted as bullish

 

it's bullish because it means HFSC will get nothing done while he is chair or has any influence

 

the House Repubs could latch onto ginnie mae model.  this is where mnuchin's thoughts should come in, whenever he tells us what his goals are.

[Luke 532]

Mnuchin has been vague on a few things, but very clear on 2... Fannie and Freddie are not going anywhere and the 30-year mortgage will be intact.  The former being the focal point with regards to Hensarling's comments.  I would place more weight on Mnuchin than Hensarling given their titles.

[Guest cherzeca]

The GSE (Fannie/Freddie) #mortgage model is “wrong, broken, irreparable...it needs to be scrapped.” Per @RepHensarling  speaking @nardotrealtor conference.

 

Chair Hensarling: gse reforms still under consideration in House, but F/F must be wound down and their charters repealed.

 

 

 

Should be interesting to see how this is twisted as bullish

 

it's bullish because it means HFSC will get nothing done while he is chair or has any influence

 

the House Repubs could latch onto ginnie mae model.  this is where mnuchin's thoughts should come in, whenever he tells us what his goals are.

 

to be clear, if hensarling hates FnF, he hates GNMA even more.  he wants govt out of housing.