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

[Guest cherzeca]

People who bought on Ottings comments are getting restless and moving on.

 

I think that is right.  also may be anticipating dividend payment on 3/31 which doesn't make much sense if admin will be moving onto a plan,  but I suppose if the plan is not ready then the thinking may go that the dividend need not be suspended until it is. also people may be antsy about the SBC hearings 3/26-27.  on 3/26 prof levitan will likely address need for an explicit fed guaranty.  he did the same exact thing in a SBC hearing in 2011.  ho hum

 

still likely 3 months away from collins en banc decision

[hardincap]

Otting making a big deal of changes coming within 2-4 weeks and then utterly failing to deliver is quite something..

[muscleman]

People who bought on Ottings comments are getting restless and moving on.

 

Right. As Chris said, last in first out.

[muscleman]

Otting making a big deal of changes coming within 2-4 weeks and then utterly failing to deliver is quite something..

 

This is why I follow technicals. When I sold again on 2/25-2/26, I was quite puzzled because the fundamentals look so good that I felt like I may be making a mistake and miss a huge run up in just 1-2 weeks.

Then day by day passed and there is no Otting plan yet.

 

[Seahug]

 

Just to add some perspective. My cost basis on the Jrs. is 47 cents or about 2 cents on the dollar. If I were to sell today that would mean 1700% correctness. I would love to be wrong this way only 1 more time in my investing journey.

 

wow congrats on a 17 bagger. that's life changing. I've never had a public market return >7x.

[investorG]

Otting making a big deal of changes coming within 2-4 weeks and then utterly failing to deliver is quite something..

 

mnuchin to date has been weak on housing finance.  however, he's far smarter than me, so in order of likelihood imo:

 

-- otting's comments and leaks were staged to spark congress to act.  this may be working given the document released by crapo and 2 days of hearings upcoming.  mnuchin might really want the paid-for explicit guarantee and perhaps is willing to accept the other stuff like multiple guarantors to try to get it through congress.  the Democrats may just go along if the price is right on their programs.

 

-- otting had his mnuchin nov-2016 moment and the leak blew everything up, back to the drawing board.

 

-- after the collins arguments, mnuchin hit pause to hear the results because the lamberth and sweeney plaintiffs settlement ask requirements might be adjusted / finalized after this specific ruling is announced.

 

-- or something else

 

 

[muscleman]

Otting making a big deal of changes coming within 2-4 weeks and then utterly failing to deliver is quite something..

 

mnuchin to date has been weak on housing finance.  however, he's far smarter than me, so in order of likelihood imo:

 

-- otting's comments and leaks were staged to spark congress to act.  this may be working given the document released by crapo and 2 days of hearings upcoming.  mnuchin might really want the paid-for explicit guarantee and perhaps is willing to accept the other stuff like multiple guarantors to try to get it through congress.  the Democrats may just go along if the price is right on their programs.

 

-- otting had his mnuchin nov-2016 moment and the leak blew everything up, back to the drawing board.

 

-- after the collins arguments, mnuchin hit pause to hear the results because the lamberth and sweeney plaintiffs settlement ask requirements might be adjusted / finalized after this specific ruling is announced.

 

-- or something else

 

Good summary.

[Guest cherzeca]

Otting making a big deal of changes coming within 2-4 weeks and then utterly failing to deliver is quite something..

 

mnuchin to date has been weak on housing finance.  however, he's far smarter than me, so in order of likelihood imo:

 

-- otting's comments and leaks were staged to spark congress to act.  this may be working given the document released by crapo and 2 days of hearings upcoming.  mnuchin might really want the paid-for explicit guarantee and perhaps is willing to accept the other stuff like multiple guarantors to try to get it through congress.  the Democrats may just go along if the price is right on their programs.

 

-- otting had his mnuchin nov-2016 moment and the leak blew everything up, back to the drawing board.

 

-- after the collins arguments, mnuchin hit pause to hear the results because the lamberth and sweeney plaintiffs settlement ask requirements might be adjusted / finalized after this specific ruling is announced.

 

-- or something else

 

I'll take something else. 

 

I think mnuchin is the lead dog, Phillips serves to do Mnuchin's housing finance work, and no one other than mnuchin is going to make a decision.  I also think mnuchin has been very busy on tax reform, sanctions, china, federal reserve etc and he simply hasn't had the time...and the GSEs can wait, politically as well as tactically.  no need to rush given that both calabria nomination and collins decision will affect calculus. and if congress ever gets around to where they look like they may agree on something, that's fine as it lowers the temperature for internecine exec/congress squabbling.

 

assuming Calabria is confirmed, collins is something of a positive and congress has hearings that get nowhere, how does this hurt the process if one waits for this to develop?

[hardincap]

The white house also said it will release a plan soon, and that was over a month ago? To me it suggests dysfunction. Gasparino reported there is internal disagreement on GSE strategy within white house--I think this is entirely plausible. We have to remember GSEs are little upside and huge downside in the perspective of politicians. The path of least resistance is to do nothing until they need to be bailed out again.

 

In regards to Collins, I simply dont share everyone's optimism on the prospects of a positive outcome in this case. I had the same belief and feeling on Perry appeals--its better for shareholders to use it as a threat rather than rely on a positive ruling. Also I dont find it a coincidence that Berkowitz, who has much more visibility and insight on the legal cases than we do, has been significantly paring down his position.

[muscleman]

The white house also said it will release a plan soon, and that was over a month ago? To me it suggests dysfunction. Gasparino reported there is internal disagreement on GSE strategy within white house--I think this is entirely plausible. We have to remember GSEs are little upside and huge downside in the perspective of politicians. The path of least resistance is to do nothing until they need to be bailed out again.

 

In regards to Collins, I simply dont share everyone's optimism on the prospects of a positive outcome in this case. I had the same belief and feeling on Perry appeals--its better for shareholders to use it as a threat rather than rely on a positive ruling. Also I dont find it a coincidence that Berkowitz, who has much more visibility and insight on the legal cases than we do, has been significantly paring down his position.

 

Well, Bruce is facing severe liquidation pressure and had to sell of everything he has. When he sells suckers like SHLD, it makes sense to book profits on FNMAS to cancel out those losses so his mutual fund investors don't have to worry about taxes or tax loss carry forward.

 

Didn't his GSE position in terms of % of total portfolio stay flat or even increased a bit?

[Guest cherzeca]

fairholme sold down GSEs more than JOE, but basically it is cash, JOE and GSEs at this point. 

 

I very much like collins.  cant say I know what relief is granted but I like it from a merits point of view

[muscleman]

fairholme sold down GSEs more than JOE, but basically it is cash, JOE and GSEs at this point. 

 

I very much like collins.  cant say I know what relief is granted but I like it from a merits point of view

 

Thank you Chris. Your legal perspective is always invaluable here!  :)

[investorG]

Otting making a big deal of changes coming within 2-4 weeks and then utterly failing to deliver is quite something..

 

mnuchin to date has been weak on housing finance.  however, he's far smarter than me, so in order of likelihood imo:

 

-- otting's comments and leaks were staged to spark congress to act.  this may be working given the document released by crapo and 2 days of hearings upcoming.  mnuchin might really want the paid-for explicit guarantee and perhaps is willing to accept the other stuff like multiple guarantors to try to get it through congress.  the Democrats may just go along if the price is right on their programs.

 

-- otting had his mnuchin nov-2016 moment and the leak blew everything up, back to the drawing board.

 

-- after the collins arguments, mnuchin hit pause to hear the results because the lamberth and sweeney plaintiffs settlement ask requirements might be adjusted / finalized after this specific ruling is announced.

 

-- or something else

 

I'll take something else. 

 

I think mnuchin is the lead dog, Phillips serves to do Mnuchin's housing finance work, and no one other than mnuchin is going to make a decision.  I also think mnuchin has been very busy on tax reform, sanctions, china, federal reserve etc and he simply hasn't had the time...and the GSEs can wait, politically as well as tactically.  no need to rush given that both calabria nomination and collins decision will affect calculus. and if congress ever gets around to where they look like they may agree on something, that's fine as it lowers the temperature for internecine exec/congress squabbling.

 

assuming Calabria is confirmed, collins is something of a positive and congress has hearings that get nowhere, how does this hurt the process if one waits for this to develop?

 

sounds like a lot of excuses.  he has the time for this, or at least to tell phillips what to do/say.  He's not leading for some reason.  Meanwhile, it appears he's sucking up another sweep this quarter which is contrary to his publicly stated priorities.  The longer the wait to start this process, the closer to the election.  It is what it is -- I simply may have misjudged his abilities and/or intentions.

[Guest cherzeca]

" it appears he's sucking up another sweep this quarter". I would say it is still an open question.

[Guest cherzeca]

fairholme sold down GSEs more than JOE, but basically it is cash, JOE and GSEs at this point. 

 

I very much like collins.  cant say I know what relief is granted but I like it from a merits point of view

 

Thank you Chris. Your legal perspective is always invaluable here!  :)

 

thanks! and so isn't collins just Perry 2.0?

 

I am going to say something that I truly believe, but which is kind of squishy. take it or leave it.  as a backdrop, the DC circuit is very inside DC, pro federal government orientation, pro-congress/obama con-trump at moment.  I do believe Perry was decided with that backdrop as an influence.  as a backdrop, 5th circuit is very independent pro-states less federal government more trump than congress at the moment. anyone who thinks collins will just be a reprise of Perry is not acknowledging some strong differences between the two circuits

[muscleman]

" it appears he's sucking up another sweep this quarter". I would say it is still an open question.

 

Based on my technical analysis, the market thinks it is certain that this 3/31 dividend will be paid. So we'll see.

It has been flashing red lights to me since 2/25.

 

Could we get some kind of surprise? We certainly could. But the market is usually right most of the time.

[Eye4Valu]

" it appears he's sucking up another sweep this quarter". I would say it is still an open question.

 

Based on my technical analysis, the market thinks it is certain that this 3/31 dividend will be paid. So we'll see.

It has been flashing red lights to me since 2/25.

 

Could we get some kind of surprise? We certainly could. But the market is usually right most of the time.

 

What did your fortune cookie say though?

[muscleman]

" it appears he's sucking up another sweep this quarter". I would say it is still an open question.

 

Based on my technical analysis, the market thinks it is certain that this 3/31 dividend will be paid. So we'll see.

It has been flashing red lights to me since 2/25.

 

Could we get some kind of surprise? We certainly could. But the market is usually right most of the time.

 

What did your fortune cookie say though?

 

Fortune cookie? Lol. That's a new interesting name for technical analysis. The most common one I heard of is "voodoo" :)

 

As I said, this 3/31 dividend will be paid. And I sold most preferred on 2/25 and rest on 2/26 market open.

Yesterday morning I was expecting a bottom, but at market close it looked more bearish, so a bottom may not be in for a couple of more weeks.

 

[investorG]

" it appears he's sucking up another sweep this quarter". I would say it is still an open question.

 

Based on my technical analysis, the market thinks it is certain that this 3/31 dividend will be paid. So we'll see.

It has been flashing red lights to me since 2/25.

 

Could we get some kind of surprise? We certainly could. But the market is usually right most of the time.

 

What did your fortune cookie say though?

 

Fortune cookie? Lol. That's a new interesting name for technical analysis. The most common one I heard of is "voodoo" :)

 

As I said, this 3/31 dividend will be paid. And I sold most preferred on 2/25 and rest on 2/26 market open.

Yesterday morning I was expecting a bottom, but at market close it looked more bearish, so a bottom may not be in for a couple of more weeks.

 

muscleman, don't sweat the arrogant posts antagonizing you and TA.  While this board is naturally a fundamentally-based value crowd, most serious investors agree that technical analysis can complement fundamental research if used in a structured manner.  it also appears you approach your analysis with humility - something we could all use more of.  good luck to you.

[muscleman]

" it appears he's sucking up another sweep this quarter". I would say it is still an open question.

 

Based on my technical analysis, the market thinks it is certain that this 3/31 dividend will be paid. So we'll see.

It has been flashing red lights to me since 2/25.

 

Could we get some kind of surprise? We certainly could. But the market is usually right most of the time.

 

What did your fortune cookie say though?

 

Fortune cookie? Lol. That's a new interesting name for technical analysis. The most common one I heard of is "voodoo" :)

 

As I said, this 3/31 dividend will be paid. And I sold most preferred on 2/25 and rest on 2/26 market open.

Yesterday morning I was expecting a bottom, but at market close it looked more bearish, so a bottom may not be in for a couple of more weeks.

 

muscleman, don't sweat the arrogant posts antagonizing you and TA.  While this board is naturally a fundamentally-based value crowd, most serious investors agree that technical analysis can complement fundamental research if used in a structured manner.  it also appears you approach your analysis with humility - something we could all use more of.  good luck to you.

 

Thank you! A few members here have been providing great contributions to the thread. I was mostly inactive before because I have nothing else to add. Then I realized that I could probably contribute as well by providing my technical analysis. So I became more active, and was taunted by a few members. But that's ok. I am sure there are a few members who benefit. My goal is to contribute back so we can all mutually benefit from each other on the GSE discussions.

 

[Guest cherzeca]

@MM. we can use all of the help we can get, appreciate your "value" added.  I do believe that like crowd sourcing odds, TA can give you the temperature of the market re future expectations.  but I do believe with GSEs (politics meets finance) it is hard to know who is doing what to whom and why. 

[hardincap]

@cherzeca there were numerous squishy positive signals with lamberth and perry as well (ginsberg and millet's connection with olsen, lamberth's history of being tough on govnt, etc). imo, squishy signals lead to squishy thought process--best not to go there. 

 

agreed that TA can absolutely work for many stocks (and people on this board are blindly and foolishly dismissing it), but not so much with GSEs which trade very lightly until there is major news. if volume spiked with NO news and stocks are down heavily, however, that would be a strong sell signal to me. remember when hank paulson tipped off his buddies before taking over f&f?

[Guest cherzeca]

once squishy, always squishy

[undervalued]

Prospects For Fannie/Freddie Recapitalization In An Environment Of Political Risk:  An Allegory

 

https://www.dropbox.com/s/3r34frvf1p0hfgp/The%20Set%20Up.docx?dl=0

 

Isn't it amazing that every time there was an admin delay, we say "Now the thesis is back to courts", and every time there was a negative court ruling, we say "Courts don't matter. Now the thesis is back to admin reform"?  ::)

 

With that said, I do think Collins is promising. But we have been wrong all along the way. ::)

Just to add some perspective. My cost basis on the Jrs. is 47 cents or about 2 cents on the dollar. If I were to sell today that would mean 1700% correctness. I would love to be wrong this way only 1 more time in my investing journey.

 

rros, could please you elaborate on how 1700% were achieved? My uncreative mind has been stuck to buy and hold strategy. What made you confident is selling/holding/buying at different periods?

[muscleman]

@MM. we can use all of the help we can get, appreciate your "value" added.  I do believe that like crowd sourcing odds, TA can give you the temperature of the market re future expectations.  but I do believe with GSEs (politics meets finance) it is hard to know who is doing what to whom and why.

 

My view is that a legal surprise could totally throw TA out of whack, but if the thesis is built on administrative reforms, then TA is more helpful than FA. We know this administration has been talking to lots of people in the mortgage industry, so these mortgage people likely know something. If you want a recent example, Otting's leaked talk about the 2-4 week plan release is an example. He was not making a public statement. He was talking to an inner circle of people.