SnarkyPuppy Posted June 14, 2018 Share Posted June 14, 2018 Pretty amazing to now read 10,000+ posts in this topic. You read them all? Link to comment Share on other sites More sharing options...
John Hjorth Posted June 14, 2018 Share Posted June 14, 2018 Pretty amazing to now read 10,000+ posts in this topic. You read them all? Almost. CoBF is my most valuable "paper" every day. Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted June 14, 2018 Share Posted June 14, 2018 Pretty amazing to now read 10,000+ posts in this topic. You read them all? Almost. CoBF is my most valuable "paper" every day. What are your thoughts? Personally, I think the preferred should be trading in the mid teens. Even a 66% upside to par ($15 for a $25 par) seems absurd given the current constraints involved. Seems a combination of ignored, hated, misunderstood, and frankly most of the buyers have already bought multiple dips over the years leaving more sellers (due to timing, liquidations) than buyers. This is exactly the type of investment I look for as a contrarian investor looking for systemic edges. Link to comment Share on other sites More sharing options...
Luke 532 Posted June 14, 2018 Share Posted June 14, 2018 This is exactly the type of investment I look for as a contrarian investor looking for systemic edges. +1 Link to comment Share on other sites More sharing options...
Midas79 Posted June 14, 2018 Share Posted June 14, 2018 What are your thoughts? Personally, I think the preferred should be trading in the mid teens. Even a 66% upside to par ($15 for a $25 par) seems absurd given the current constraints involved. Seems a combination of ignored, hated, misunderstood, and frankly most of the buyers have already bought multiple dips over the years leaving more sellers (due to timing, liquidations) than buyers. This is exactly the type of investment I look for as a contrarian investor looking for systemic edges. If people really understood what was going on and the $25s had a 60%-of-par valuation, this investment wouldn't be nearly so contrarian. Right? Link to comment Share on other sites More sharing options...
Luke 532 Posted June 14, 2018 Share Posted June 14, 2018 Rosner's paper on FHFA Capital Requirements... https://www.scribd.com/document/381737512/GF-Co-FHFA-s-Proposed-Capital-Rule PDF attached... Tim Howard's comments on Rosner's paper... https://howardonmortgagefinance.com/2018/05/03/a-view-on-affordable-housing/comment-page-1/#comment-6828 I’m a little puzzled by this note from Josh. I generally agree with his overall assessment of the FHFA capital proposal—which he calls “a good start,” and “not being so onerous as to reduce the economic viability of their mandated mission to ensure liquidity to the primary mortgage market”—but he then spends the bulk of his piece objecting to the fact that “FHFA will not implement the capital requirements while the GSEs are in Conservatorship and will, instead, wait for Congress or the Administration to affirmatively act on GSE reform,” arguing that “Such a position is in direct opposition to the requirements of the HERA law and, again, ignores that Congress has acted and given it direction in the HERA law.” All of that is true. The problem is that Treasury and FHFA interpret HERA differently from how Josh does, and so far the Treasury/FHFA interpretation has prevailed in every court case decided to date. Fannie and Freddie cannot be recapitalized as long as the net worth sweep remains in force or until the conservatorship has ended, and FHFA cannot end either the sweep or the conservatorship without Treasury’s approval. For those reasons, I’ll take the half a loaf FHFA has given us: beginning a substantive dialogue about the right way to capitalize the companies post-conservatorship, if, whenever and however—i.e. legislatively or administratively—that happens. As I noted shortly after the FHFA capital proposal came out, I’m going to take my time going through and analyzing it before I write my comment letter (which I’ve got a couple of months to do). But I do have a preliminary reaction to it: it is extremely, and I would say unnecessarily, conservative. I’m going to withhold judgment as to whether the average 3.24 percent “estimated risk-based capital requirements as of September 31, 2017” for Fannie and Freddie shown in Table 1 of the summary document would make the companies “unviable” (I suspect not), but I will make arguments for how and why that number could be reduced without materially increasing taxpayer risk, and at the same time significantly lowering the cost and increasing the availability of mortgages to the large majority of homeowners Fannie and Freddie were chartered to serve. I recognize, of course, that there is a political dimension to the recapitalization of Fannie and Freddie, and that there will be some threshold capital percentage below which it will be very difficult to go, irrespective of the merits of the arguments for doing so. Building on the “Rule of Law Guy’s” observation, the range of dollar capital numbers for Fannie and Freddie as of September 2017 given in the FHFA summary table—from $154.1 billion without a deferred tax asset reserve to $180.9 billion with one—is virtually identical to the $155 to $180 capital range in the Moelis recapitalization plan released just over a year ago. I doubt this is coincidental, and it suggests we now are seeing some serious “fleshing out” of a pathway to administrative reform of the companies, if only for informational purposes. And it’s interesting that given the fundamentally high credit quality of the mortgages Fannie and Freddie finance, the only way to get to a 2.75 to 3.25 percent average capital number is to add a host of conservative buffers, a few of which are redundant. Hopefully some of those can be worked down as the discussion moves forward. Link to comment Share on other sites More sharing options...
Luke 532 Posted June 15, 2018 Share Posted June 15, 2018 Seems to me that David Stevens is acting a bit desperate... Ten days ago... David Stevens feels left out in the cold... https://www.insidemortgagefinance.com/imfnews/1_1371/daily/MBA-Wants-more-transparency-on-gse-activities-1000046308-1.html?ET=imfpubs:e10982:73599a:&st=email&s=imfnews Four days ago... It appears David Stevens is no fan of Trump! I doubt he'd be publicly bashing POTUS at this juncture if he thought he was going to get his way with the GSE's. Similar to Corker bashing Trump awhile back when he realized his desires weren't going to materialize. https://www.housingwire.com/blogs/1-rewired/post/43640-monday-morning-cup-of-coffee-ben-carson-backtracks-on-plan-to-raise-rents-for-poor Today... https://www.insidemortgagefinance.com/imfnews/1_1379/daily/treasury-wants-to-reduce-fannie-freddie-footprint-1000046445-1.html?ET=imfpubs:e11034:73599a:&st=email&s=imfnews In a new opinion piece, Mortgage Bankers Association CEO and President Dave Stevens takes aim at the speculators who bought shares in Fannie and Freddie and the tactics they’ve taken to get the two released into the wild again (commonly known as “recap and release”). In a new blog posting, Stevens says since the moment the GSEs were put into conservatorship “a debate has raged over their future. The debate is complex, highly charged and at times, frankly nasty.” Then the soon-to-be retired trade group CEO notes: “Part of the reason for the tone of the debate is that various groups representing the interests of shareholders of the two companies have chosen to wage a bare-knuckles campaign to get the two companies re-privatized. If they were re-privatized, the increase in value of these stocks, currently trading below $2 per share, could produce a massive profit to their investors. Thus, a hodge-podge of players acting on behalf of shareholders has put significant capital behind a coordinated effort to increase the odds of their re-privatization, including contributing to sympathetic non-profits and other stakeholders who could be persuaded to share their views, hiring PR firms to plant beneficial op-eds and other stories in the press, and creating organizations intended to give the impression of grass roots support.” Wait. Planting stories in the press? Donating money to nonprofits? Sounds like a page out of the Fannie-Freddie lobbying book, pre-conservatorship… Link to comment Share on other sites More sharing options...
beaufort Posted June 16, 2018 Share Posted June 16, 2018 If anybody has a subscription to American Banker, please post the story from today. Link to comment Share on other sites More sharing options...
rros Posted June 16, 2018 Share Posted June 16, 2018 If anybody has a subscription to American Banker, please post the story from today. Check your messages. Link to comment Share on other sites More sharing options...
muscleman Posted June 16, 2018 Share Posted June 16, 2018 If anybody has a subscription to American Banker, please post the story from today. Check your messages. Could you send me one as well pls Link to comment Share on other sites More sharing options...
allnatural Posted June 16, 2018 Share Posted June 16, 2018 Are we talking about this article? https://www.americanbanker.com/news/is-gse-capital-proposal-an-academic-exercise-or-a-whole-lot-more Link to comment Share on other sites More sharing options...
doughishere Posted June 17, 2018 Share Posted June 17, 2018 Like returning these kids back to their parents, Trump has the ability to make things whole for shareholders. The power is with him. Not the Democrats. Republicans control congress. :) Got that tax overhaul through strange they can muster up the support for either of these. Ohh well. Blue balls it continues to be. Congrats on 1k! Edit: Ohh and Happy Fathers Day, especially to those that were taken. Link to comment Share on other sites More sharing options...
Luke 532 Posted June 17, 2018 Share Posted June 17, 2018 Ohh well. Blue balls it continues to be. Congrats on 1k! It's always fun when a non-millionaire mocks a group of millionaires on how patient they are being for a thesis to play out. Link to comment Share on other sites More sharing options...
doughishere Posted June 17, 2018 Share Posted June 17, 2018 Ohh well. Blue balls it continues to be. Congrats on 1k! It's always fun when a non-millionaire mocks a group of millionaires on how patient they are being for a thesis to play out. Wow. Hey man. You tilted? That’s a pretty un-Jesus like comment. I mean would Jesus try to insult a person by saying he’s a millionaire and you’re not? Honestly, it’s kinda the sign of a douche bag. Lol, Anywsys I’ve made money on trading this. Lol. Link to comment Share on other sites More sharing options...
Luke 532 Posted June 17, 2018 Share Posted June 17, 2018 Ohh well. Blue balls it continues to be. Congrats on 1k! It's always fun when a non-millionaire mocks a group of millionaires on how patient they are being for a thesis to play out. Wow. Hey man. You tilted? Lol, I’ve made money on trading this. Lol. Tilted? Not even close. Glad to hear you've made money trading it, but my comment was based on my pet peeve of those with less success at something (whether it's investing, athletic ability, personal finance, etc.) mocking the very traits that have made those more successful than them, well, more successful. Link to comment Share on other sites More sharing options...
doughishere Posted June 17, 2018 Share Posted June 17, 2018 Ohh well. Blue balls it continues to be. Congrats on 1k! It's always fun when a non-millionaire mocks a group of millionaires on how patient they are being for a thesis to play out. Wow. Hey man. You tilted? Lol, I’ve made money on trading this. Lol. Tilted? Not even close. Glad to hear you've made money trading it, but my comment was based on my pet peeve of those with less success at something (whether it's investing, athletic ability, personal finance, etc.) mocking the very traits that have made those more successful than them, well, more successful. lol. Ohh. Ok. Thats what set you off this morning. Link to comment Share on other sites More sharing options...
Luke 532 Posted June 17, 2018 Share Posted June 17, 2018 Jesus speaks out against mockery throughout the New Testament. Jesus uses truth to drive home his point all the time. He repeatedly "pulls rank" with those that mock him in the Bible ("I AM"). I'm using truth (the fact that patience is a pillar of successful investing) to drive home the point that it shouldn't be mocked. I'm "pulling rank" to provide an example that patience does work, and it works for an everyday Joe like myself. If you'd like to discuss further you already know my e-mail. Don't want to clog the board further with non-investing stuff. Link to comment Share on other sites More sharing options...
rros Posted June 18, 2018 Share Posted June 18, 2018 If anybody has a subscription to American Banker, please post the story from today. Check your messages. Could you send me one as well pls Check, please. Link to comment Share on other sites More sharing options...
Luke 532 Posted June 18, 2018 Share Posted June 18, 2018 I'm not a subscriber but this is an interesting headline (see it in the URL): https://subscriber.politicopro.com/financial-services/whiteboard/2018/06/civil-rights-trade-groups-urge-watt-to-do-more-on-gse-capital-restoration-1429700 Link to comment Share on other sites More sharing options...
Luke 532 Posted June 18, 2018 Share Posted June 18, 2018 I'm not a subscriber but this is an interesting headline (see it in the URL): https://subscriber.politicopro.com/financial-services/whiteboard/2018/06/civil-rights-trade-groups-urge-watt-to-do-more-on-gse-capital-restoration-1429700 Letter sent to FHFA today (attached) Link to comment Share on other sites More sharing options...
rros Posted June 18, 2018 Share Posted June 18, 2018 Thank you, Luke. I don't see "cornerofBerkshire" in that list of signatories. Have you guys sold? Link to comment Share on other sites More sharing options...
Luke 532 Posted June 18, 2018 Share Posted June 18, 2018 Thank you, Luke. I don't see "cornerofBerkshire" in that list of signatories. Have you guys sold? Hah! Good one :). It does read like we wrote it. Link to comment Share on other sites More sharing options...
allnatural Posted June 18, 2018 Share Posted June 18, 2018 Not sure if there is anything to make of this letter. These are the same groups that have been trying to get FHFA to stop the sweep for the last few years already... sending letters on a pretty frequent basis. Link to comment Share on other sites More sharing options...
Luke 532 Posted June 18, 2018 Share Posted June 18, 2018 Not sure if there is anything to make of this letter. These are the same groups that have been trying to get FHFA to stop the sweep for the last few years already... sending letters on a pretty frequent basis. I don't recall them using such direct language though in past letters. This one seems more to the point. Perhaps I'm wrong. Link to comment Share on other sites More sharing options...
rros Posted June 18, 2018 Share Posted June 18, 2018 These are the same groups that have been trying to get FHFA to stop the sweep...Nah.. These are the same hedge funds that have been trying to get the same groups that have been trying to get FHFA to stop the sweep... for the last few years already. (joking). Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now