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

[onyx1]

@SnarkyPuppy

 

Thanks for sharing your extensive work the above post.  Very informational!

 

[no_free_lunch]

I am out.  I wish you best of luck with it.  I just can't handle the uncertainty and the politics behind it.  The market offered me a chance to bail with a small profit and this position has actually outperformed S&P500.  Good enough.

[DRValue]

I am out.  I wish you best of luck with it.  I just can't handle the uncertainty and the politics behind it.  The market offered me a chance to bail with a small profit and this position has actually outperformed S&P500.  Good enough.

 

We're on the home straight bud. Good much though.

[muscleman]

Can someone recommend a preferred stock?  I would like to invest some money so that dividends can cover tuition every semester. if you don’t have any specific recommendations, how can I go about looking for one (where to look and what to look for).  Thank you.

 

You spent over a year on this thread and now asking these questions??? :o

I think I recommended that you read bankruptcy investing and all that stuff one year ago. If you have read those books, you should have a good knowledge now.

[Luke 532]

I don't think she means GSE prefs, she means other company prefs or dividend stocks.

[muscleman]

I am out.  I wish you best of luck with it.  I just can't handle the uncertainty and the politics behind it.  The market offered me a chance to bail with a small profit and this position has actually outperformed S&P500.  Good enough.

 

Yikes.. Wish you best of luck.

Please excuse my comments if you think they are offensive, but my 2 cents is to cut losses short and keep profits long. You can handle the uncertainty and politics behinds it when you are losing, and you are holding on to hope you can sell for break even to get relieved, but now that the uncertainty and politics have finally diminished and stock moved sightly above your break even point, you are out? How can this not be a mistake? On the other hand, imagine Hillary won the election, and these preferreds lost big after she appointed David Stevens to FHFA, would you sell at those big losses, or would you hold on because you can't take losses?

Those would can't take losses eventually stop trading because they were forced to take mother of all losses.

[no_free_lunch]

No offense taken.  I am here to learn.  It is what it is.  I am okay holding compounders, high quality stuff that I think will ride out the storm.  I have no idea how to handicap this one.  When I was down 30%, I realized how little I really know about this situation.  I realized how dependent I am on the government doing something and yet the political gridlock just seems to be increasing.

[Ahab]

For me, this saga has been stomach churning at parts. I'm lucky that I don't get too emotional about the paper losses that have inevitably arisen in Fannie/Freddie over these past few years.

@nofreelunch: Interesting to hear your sentiments. I think the political gridlock and bureaucratic minutia surrounding Fannie/Freddie has had an opposite effect on my desire to invest over time. The lack of a congressional solution over a decade has given me confidence that these institutions are a firm part of the Washington status quo. Politicians occasionally like to rock the boat, but no one wants to be responsible for tipping it over. This is currently my largest position by far and I expect a reform that largely perpetuates the status quo.

[rros]

For me, this saga has been stomach churning at parts. I'm lucky that I don't get too emotional about the paper losses that have inevitably arisen in Fannie/Freddie over these past few years.

@nofreelunch: Interesting to hear your sentiments. I think the political gridlock and bureaucratic minutia surrounding Fannie/Freddie has had an opposite effect on my desire to invest over time. The lack of a congressional solution over a decade has given me confidence that these institutions are a firm part of the Washington status quo. Politicians occasionally like to rock the boat, but no one wants to be responsible for tipping it over. This is currently my largest position by far and I expect a reform that largely perpetuates the status quo.

The status quo is conservatorship. What do you mean?

[Ahab]

Sorry for the lack of clarity. I was referring to the status quo of Fannie & Freddie being the dominant players in the mortgage securitization market. Obviously, I'd love for the conservatorship aspect of the status quo to end  :D :D

[undervalued]

Which previous board posts ? I am looking for a dividend paying preferred to pay me some money every semester and not have to worry each time. Owe $3300 currently. I have 500 FMCKJ and 2000 common shares of FNMA. I need money tomorrow for this semester. Should I sell FMCKJ or FNMA? I wanted to hold in this run up but my luck is always bad.

 

u can read previous board posts on this matter - there is everything from $25 par to $100,000 par securities should do well.  You can also play the common too which have now blown out wider to the prefs (ie: cheaper) right now...

 

You shouldn't listen to me because my luck is pretty bad also. When I can't decide which one to sell or hold, usually because I don't know which one will do better, I sell both in equal percentage.

 

If you don't want to worry, better keep it in cash.

[muscleman]

When I was down 30%, I realized how little I really know about this situation.

 

Just my 2 cents, you could totally predict this scenario before buying this security. Just imagine you bought, and then a few months later, it drifted down 30%. How would you react? Would you realize "how little I really know about this situation."? In that case, you could have avoided buying from the beginning.

The point I want to make is that we all have to do mental rehearsals BEFORE buying anything.

On the other hand, if you merely start to think you know nothing about this, when no fundamental has changed but just price dropped 30%, perhaps you are not a good fit for fundamental investing. I suggest you try technical investing.

[rros]

Would this end up being same ? Mnuchin 2 yrs ago in November spread optimism and nothing happened.

 

How difficult is it for FHFA to modify PSPA immediately and write up a small fee to build the wall and in return void NWS? Simple enough to write it up and both FHFA and Tsy can do it alone.

 

Can they cite Calabria’s writings  in Collins oral argument as the nominated FHFA director’s views? Judges would at least be reluctant to favor defendants as they know in case Calabria is confirmed, the judges will lose credibility as now there is a FHFA director who himself believes HERA was violated.

 

https://object.cato.org/sites/cato.org/files/pubs/pdf/working-paper-26_1.pdf

 

Hope plaintiff lawyers are well prepared in front of the panel and persuasive and not let Judges fall for Cayne's piteous fable on how government saved Fannie and Freddie.

FHFA and Treasury can write a "Letter of Agreement" anytime and modify just about any aspect of the PSPAs. Like they did when they raised the floor for the companies' minimum net worth.

[rros]

If so, that would be beautiful on all front : end the shutdown, build the wall beyond 6.5 billion and continue building it till the next election and help housing by releasing them as housing is kind of on a slippery slope. Benefits abound. There is no political impact as no matter what they do, they will get criticized and nothing can be worse than what fellow travelers did.

 

Would this end up being same ? Mnuchin 2 yrs ago in November spread optimism and nothing happened.

 

How difficult is it for FHFA to modify PSPA immediately and write up a small fee to build the wall and in return void NWS? Simple enough to write it up and both FHFA and Tsy can do it alone.

 

Can they cite Calabria’s writings  in Collins oral argument as the nominated FHFA director’s views? Judges would at least be reluctant to favor defendants as they know in case Calabria is confirmed, the judges will lose credibility as now there is a FHFA director who himself believes HERA was violated.

 

https://object.cato.org/sites/cato.org/files/pubs/pdf/working-paper-26_1.pdf

 

Hope plaintiff lawyers are well prepared in front of the panel and persuasive and not let Judges fall for Cayne's piteous fable on how government saved Fannie and Freddie.

FHFA and Treasury can write a "Letter of Agreement" anytime and modify just about any aspect of the PSPAs. Like they did when they raised the floor for the companies' minimum net worth.

I think "the wall" is not just about the 5 billion needed. It seems to have political ramifications that go beyond the money. So more complex. And an easy route like reaching into the till may not be the preferred action. I may be wrong too.

[Wiggins]

I'm encouraged.

The latest brief from Otting's FHFA argues that common shares after HERA but before the NWS were "nearly worthless" and traded for their "speculative value." That's a whole helluva lot different than saying they were worthless and had NO value.

 

This is simply a negotiation before any restructuring/settlement. The 5th circuit may or may not sweeten the pot for common holders.

[DRValue]

The en banc hearing, if relating to relief, does give a politically expedient way to end conservatorship. I wonder if anyone has ever 'thrown' a case?

[orthopa]

Looks like FHFA is not going to defend the constitutionality of FHFAs powers under Otting. Impactful in anyway legally? Looks to me like FHFA saying why bother if we have a road map anyway.

[Guest cherzeca]

Looks like FHFA is not going to defend the constitutionality of FHFAs powers under Otting. Impactful in anyway legally? Looks to me like FHFA saying why bother if we have a road map anyway.

 

fhfa will defend against standing only for the unconstitutional claim, which they won with in Bhatti in the district court and lost in collins in the district court.  won't defend against unconstitutional claim on merits.  all of the action in this case will focus on whether to give retrospective relief (vacate NWS) as I expect en banc to find standing

[blackcoffee]

Looks like FHFA is not going to defend the constitutionality of FHFAs powers under Otting. Impactful in anyway legally? Looks to me like FHFA saying why bother if we have a road map anyway.

 

fhfa will defend against standing only for the unconstitutional claim, which they won with in Bhatti in the district court and lost in collins in the district court.  won't defend against unconstitutional claim on merits.  all of the action in this case will focus on whether to give retrospective relief (vacate NWS) as I expect en banc to find standing

 

who would have standing for relief if not the parties suing? Could you point us to an analysis of what the logic (loosely used term with the legal system as it relates to the GSE cases) was used in the argument on that point?

[Guest cherzeca]

Looks like FHFA is not going to defend the constitutionality of FHFAs powers under Otting. Impactful in anyway legally? Looks to me like FHFA saying why bother if we have a road map anyway.

 

fhfa will defend against standing only for the unconstitutional claim, which they won with in Bhatti in the district court and lost in collins in the district court.  won't defend against unconstitutional claim on merits.  all of the action in this case will focus on whether to give retrospective relief (vacate NWS) as I expect en banc to find standing

 

who would have standing for relief if not the parties suing? Could you point us to an analysis of what the logic (loosely used term with the legal system as it relates to the GSE cases) was used in the argument on that point?

 

just read the Ps and fhfa briefs.  they contain the arguments

[Guest cherzeca]

judge lambeth gets tough on HRC private email scam:  https://www.zerohedge.com/news/2019-01-16/federal-judge-orders-rhodes-rice-other-obama-officials-respond-over-clinton

 

wonder if he will get tough on fellow travellers if fairholme ever gets to trial...

[Midas79]

judge lambeth gets tough on HRC private email scam:  https://www.zerohedge.com/news/2019-01-16/federal-judge-orders-rhodes-rice-other-obama-officials-respond-over-clinton

 

wonder if he will get tough on fellow travellers if fairholme ever gets to trial...

 

Given Lamberth's strong pro-transparency language in his Judicial Watch memorandum ordering discovery, it seems likely that he will be even tougher than Sweeney when it comes to discovery. That can only be good for the plaintiffs. Especially look at the last sentence before "II. Conclusion" on page 9. Lamberth is not going to leave any stone unturned, though I would hope that the extensive discovery already done in the Sweeney case will give him a head start.

 

I would recommend reading this, to anyone here. At 9 pages, it's a short read. It's a veritable transparency-gasm, and has several very strongly worded sentences denouncing the actions of the State Department, among others. I would copy and paste the juicy ones, but the document appears to just be a scan and my alt-tab transcription speed is terrible.

 

http://www.judicialwatch.org/wp-content/uploads/2018/12/JW-v.-State-Dept.-14-1242-Lamberth-ruling-1.pdf

 

I suppose one could rightly ask why Lamberth dismissed the Perry case in the first place, but at that point Lamberth didn't know the extent of the government's lies regarding the "death spiral", among other things. He seems to be quite displeased with what he deems State's deliberate obfuscations. Similar reasons, after seeing Sweeney's discovery documents, might have led him to finding a way to get this case to proceed.

[Wiggins]

Thanks for posting this.

You were right: it's a short read and encouraging. One would hope he would apply the same ire to the DOJ's/Treasury's obfuscation and misleading statements in the Perry case, now that he is considering the merits of "implied covenant of good faith and fair dealing." Please someone correct me if I'm wrong, but I believe the reason discovery didn't come out in 2014 in Lamberth's court is that he never got to the merits.

 

 

judge lambeth gets tough on HRC private email scam:  https://www.zerohedge.com/news/2019-01-16/federal-judge-orders-rhodes-rice-other-obama-officials-respond-over-clinton

 

wonder if he will get tough on fellow travellers if fairholme ever gets to trial...

 

Given Lamberth's strong pro-transparency language in his Judicial Watch memorandum ordering discovery, it seems likely that he will be even tougher than Sweeney when it comes to discovery. That can only be good for the plaintiffs. Especially look at the last sentence before "II. Conclusion" on page 9. Lamberth is not going to leave any stone unturned, though I would hope that the extensive discovery already done in the Sweeney case will give him a head start.

 

I would recommend reading this, to anyone here. At 9 pages, it's a short read. It's a veritable transparency-gasm, and has several very strongly worded sentences denouncing the actions of the State Department, among others. I would copy and paste the juicy ones, but the document appears to just be a scan and my alt-tab transcription speed is terrible.

 

http://www.judicialwatch.org/wp-content/uploads/2018/12/JW-v.-State-Dept.-14-1242-Lamberth-ruling-1.pdf

 

I suppose one could rightly ask why Lamberth dismissed the Perry case in the first place, but at that point Lamberth didn't know the extent of the government's lies regarding the "death spiral", among other things. He seems to be quite displeased with what he deems State's deliberate obfuscations. Similar reasons, after seeing Sweeney's discovery documents, might have led him to finding a way to get this case to proceed.

[rros]

Thanks for posting this.

You were right: it's a short read and encouraging. One would hope he would apply the same ire to the DOJ's/Treasury's obfuscation and misleading statements in the Perry case, now that he is considering the merits of "implied covenant of good faith and fair dealing." Please someone correct me if I'm wrong, but I believe the reason discovery didn't come out in 2014 in Lamberth's court is that he never got to the merits.

I do not think discovery was part of it. Perry's attorneys had only asked for summary judgement when they first filed.

 

At the last minute, after Ugoletti's affidavit showed up, they must have realized they made a strategic mistake and filed information hoping to "turn on" discovery (I think) or influence his views in the same manner. But that maneuver came too late and it looked as if Lamberth had made up his mind already.

 

But really, the expert here is Chris.

[Luke 532]

https://www.marketwatch.com/story/fhfa-acting-director-discussing-plan-to-take-fannie-and-freddie-out-of-conservatorship-2019-01-18?mod=mw_share_twitter

 

"The acting director of the Federal Housing Finance Agency has told the agency’s employees that the regulator will announce a plan within weeks to take the government-sponsored enterprises out of conservatorship."

 

Later...

 

"A spokesperson for the agency confirmed there was discussion about ending Fannie and Freddie conservatorship but denied there was any talk of timing or details."