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

[Guest cherzeca]

in 5th cir collins FHFA not plaintiffs will file a paper substituting calabria for otting, like they recently did otting for watt.  it will say nothing about the white paper.  plaintiffs will have nothing to say since rules for supplementing the docket for a submitted case are strict...supplemental authority such as a recent scotus decision.  in bhatti, which has not had oral arg (8th cir) Ps could end up mentioning it in oral argument. fhfa can simply say so what, that was his view as a private citizen.  what you are looking for is for calabria himself to make some kind of announcement or issue some sort of directive to his lawyers.

[SnarkyPuppy]

in 5th cir collins FHFA not plaintiffs will file a paper substituting calabria for otting, like they recently did otting for watt.  it will say nothing about the white paper.  plaintiffs will have nothing to say since rules for supplementing the docket for a submitted case are strict...supplemental authority such as a recent scotus decision.  in bhatti, which has not had oral arg (8th cir) Ps could end up mentioning it in oral argument. fhfa can simply say so what, that was his view as a private citizen.  what you are looking for is for calabria himself to make some kind of announcement or issue some sort of directive to his lawyers.

 

Got it.  So the notion of using his written views against him in court is basically a non starter.  Would just have to hope he still feels the same way.

 

Interesting then that we are bullish on the fact that his views at Cato won't align to his practical approach (basically- receivership), yet we feel the one area where he agrees with us (legality of NWS) is where he will be consistent with his prior thoughts. 

 

Are we just hearing what we want to hear?

[Williams406]

I worry about a lot of things with my GSE investment, but Calabria brandishing the long knives with Fannie and Freddie is quite a ways down the list. If you came to me in a world in which the GSE's did not exist and laid out the blueprint for them, my response would be "That's a really bad idea." That seems to be Calabria's Cato viewpoint. I would say it is far worse to try to eliminate them in the way the government has attempted to do. If you want to get rid of them, there is a way to do it and most libertarians would be sick with what has happened to the GSE's if they were aware. Those that don't subscribe to "the end justifies the means."

 

I see little chance Calabria plays the role of GSE assassin when doing so would violate so flagrantly his "NWS is illegal" position. Like all here, I'm really ready to see the admin's plan...

[rros]

Calabria is a HERA man. There is no good reason for him not follow it. HERA is good for us. And receivership is not in sight.

[orthopa]

Running through my head as I buy more prfd.

 

1. Calabria in place now and everything that brings with it.

2. Treasury and HUD directed by president to come up with plan to get FnF out of conservatorship and rebuild capital.

3. En Banc hearing decision due in ~60 days with all the positives potentially there.

4. Otting says capital needs out by July/August.

 

If your trying to handicap pricing/outome either the prfd was wickedly expensive a couple years ago or continues to be stupid cheap here. We are no longer dealing with Watt, Corker, Jumpstarts, etc but it trades at the same price as it has with WAY less uncertainty at least in regard to the FHFA director, conservatorship, and the wishes of those now in charge . No way is the market over optimistic at this prices. Tired is the better word.

[Luke 532]

...as I buy more prfd.

 

Take a look at FNMAP and FMCCL if you're willing to own some of the less liquid prefs.

[Guest cherzeca]

in 5th cir collins FHFA not plaintiffs will file a paper substituting calabria for otting, like they recently did otting for watt.  it will say nothing about the white paper.  plaintiffs will have nothing to say since rules for supplementing the docket for a submitted case are strict...supplemental authority such as a recent scotus decision.  in bhatti, which has not had oral arg (8th cir) Ps could end up mentioning it in oral argument. fhfa can simply say so what, that was his view as a private citizen.  what you are looking for is for calabria himself to make some kind of announcement or issue some sort of directive to his lawyers.

 

Got it.  So the notion of using his written views against him in court is basically a non starter.  Would just have to hope he still feels the same way.

 

Interesting then that we are bullish on the fact that his views at Cato won't align to his practical approach (basically- receivership), yet we feel the one area where he agrees with us (legality of NWS) is where he will be consistent with his prior thoughts. 

 

Are we just hearing what we want to hear?

 

let's see if Cambria hires krimminger as counsel in connection with any recap

[Cox022]

I dont sub to seeking alpha pro +.  I wonder if the contents to this article are interesting/relevant?

 

https://seekingalpha.com/article/228665-treasurys-surprise-follow-up-on-aig

 

 

 

 

 

[Cox022]

https://www.nytimes.com/2010/09/29/business/29aig.html

 

Just a small tidbit from an article just a few days for the public announcement of AIG's recapilization.  The principle contained in the last sentence was the interesting part, imo, not necessarily the details about warrants of preferred conversion.  Treasury took steps necessary to protect the value of its common shares.

 

AIG recapitalized by Treasury converting all its commitments to AIG into AIG common equity.  Treasury owned 92% of AIG after these conversions.  AIG issued $3B of stock, and warrants to all existing shareholders (if i have that right), and Treasury started its process of selling down its shares over the next 2-3 years.

 

Issuing warrants could also help persuade private shareholders to stay put, even though their stake would be further diluted when the Treasury converted its preferred stock to common shares. Keeping private shareholders from selling en masse is considered necessary to protect the taxpayers’ interest.

[Guest cherzeca]

Moelis blueprint is modeled on AIG recap.  not rocket surgery.  govt needs to standstill for a couple of years while company does primary issuances

[rros]

I dont sub to seeking alpha pro +.  I wonder if the contents to this article are interesting/relevant?

 

https://seekingalpha.com/article/228665-treasurys-surprise-follow-up-on-aig

Perhaps interesting. Relevant, who knows. Is it really comparable? Geithner was keen on getting rid of the AIG shares. He literally rushed selling them and did not want Treasury or any government involvement. Obama was MIA not participating or being part of the issue and the Jr.preferred holders traded at par at almost all times. Ours, instead, seems to have the direct involvement of Trump. How this changes the final outcome? I don't know. But comparing it to AIG's may not be useful.

[beaufort]

Anybody remember which series of prefs, both Fannie and Freddie, the most influential Trump insiders/Moellis backers hold?  I am adding and I want to be aligned. 

[Guest cherzeca]

Anybody remember which series of prefs, both Fannie and Freddie, the most influential Trump insiders/Moellis backers hold?  I am adding and I want to be aligned.

 

since no HF needs to disclose holdings for unlisted securities it is hard to say, outside of fairholme, which as a public mutual fund discloses detail

[beaufort]

I remember posters commenting on the various holdings of differing investors in the past.  I did a quick search for Paulson on the thread, but I didn't come up with anything, despite my memory that his name was associated with the comments in the past.   

[Guest cherzeca]

I remember posters commenting on the various holdings of differing investors in the past.  I did a quick search for Paulson on the thread, but I didn't come up with anything, despite my memory that his name was associated with the comments in the past. 

 

the reason is as I gave you.  Paulson doesn't have to report holdings.  so he doesn't. anyone saying he knows is just spouting

[beaufort]

I understand that there is a limited disclosure requirement for HFs.  Sometimes people provide information that they are not required to provide, even sophisticated parties, and for reasons that are their own.  I get your point though.

[Wiggins]

J. Paulson's purchasing of preferred stock at auction was discussed by Adam Spittler on a QTR podcast. I don't know the source of this information but I have tried to look it up. Perhaps there are some detailed records of the auction, the specific securities that were sold, etc. The FDIC auctioned a lot of assets either directly or through 3rd parties after 2008. I did find the following story that cites specific dates ("2011 sales were March 22, April 13 and May 18") for auctions of Fannie and Freddie preferred stock:

 

https://www.thestreet.com/story/12460420/1/fannie-and-freddie-plaintiffs-eye-fdic-share-sales.html

 

This article also discusses whether the FDIC was given insider information before dumping their securities. They sold in 2011 and the NWS was announced in 2012, after which the value of the securities plummeted. Yet another reason for the protective order.

[Guest cherzeca]

J. Paulson's purchasing of preferred stock at auction was discussed by Adam Spittler on a QTR podcast. I don't know the source of this information but I have tried to look it up. Perhaps there are some detailed records of the auction, the specific securities that were sold, etc. The FDIC auctioned a lot of assets either directly or through 3rd parties after 2008. I did find the following story that cites specific dates ("2011 sales were March 22, April 13 and May 18") for auctions of Fannie and Freddie preferred stock:

 

https://www.thestreet.com/story/12460420/1/fannie-and-freddie-plaintiffs-eye-fdic-share-sales.html

 

This article also discusses whether the FDIC was given insider information before dumping their securities. They sold in 2011 and the NWS was announced in 2012, after which the value of the securities plummeted. Yet another reason for the protective order.

 

If you want to know what berkowtiz/fairholme holds as of recent date it is easy.  if you want to know what anyone else held as of a recent date, you are wasting your time

[allnatural]

Ackman is the only other notable "hedge fund" that publicly discloses its holdings. mostly fnma/fmcc common with some fnmas and fmckj.

[Wiggins]

J. Paulson's purchasing of preferred stock at auction was discussed by Adam Spittler on a QTR podcast. I don't know the source of this information but I have tried to look it up. Perhaps there are some detailed records of the auction, the specific securities that were sold, etc. The FDIC auctioned a lot of assets either directly or through 3rd parties after 2008. I did find the following story that cites specific dates ("2011 sales were March 22, April 13 and May 18") for auctions of Fannie and Freddie preferred stock:

 

https://www.thestreet.com/story/12460420/1/fannie-and-freddie-plaintiffs-eye-fdic-share-sales.html

 

This article also discusses whether the FDIC was given insider information before dumping their securities. They sold in 2011 and the NWS was announced in 2012, after which the value of the securities plummeted. Yet another reason for the protective order.

 

If you want to know what berkowtiz/fairholme holds as of recent date it is easy.  if you want to know what anyone else held as of a recent date, you are wasting your time

 

I think my point was clear enough... wasn't talking about recent dates or what the hedge funds or private parties report. You would think if a gov agency auctions billions of securities it may be recorded somewhere. I couldn't find it. Perhaps someone else has a better idea of where that info would be.

[rros]

The only publicly known information about Paulson's GSEs holdings came from the UK. Paulson's investment firm worked together with Schroders asset management running a "Merger Arbitrage" fund. Small. In that fund, Schroders disclosed Paulson's bet in GSEs preferred but the investment was never itemized so the quantity was unknown and the classes were unknown. The fund shut down early last year due to regulatory requirements from UK authorities. It is unlikely those were the only holdings by Paulson. That was a tiny fund but it was useful in that the manager would comment about Paulson's views on the investment. This is the last commentary from March 2018:

The GSEs, Fannie Mae and Freddie Mac, also declined after the US Supreme Court rejected appeals by investors to revive core parts of lawsuits filed against the government over the disputed net-worth-sweep, sending the preferred shares down 12%. Paulson's view is that the net worth sweep will not likely change until there is a broader plan in place to recapitalise the entities. Since the election, Treasury Secretary Steven Mnuchin has made numerous public statements saying that he wants to address the GSE issue in ways that provide taxpayer protection and mortgage market liquidity. We believe there is considerable upside to our holdings despite potential volatility, and a high probability of a favourable resolution this year.

 

As you can read, a bit outdated. Besides this, it is my understanding he wasn't in any of the big Berkowitz's bets. Take it with a grain of salt.

 

[Luke 532]

https://www.fhfa.gov/Media/PublicAffairs/Pages/Dr-Mark-Calabria-Sworn-In-as-Director-of-the-Federal-Housing-Finance-Agency.aspx

“I enter this office with a sense of urgency. The foundations of our mortgage finance system remain vulnerable, and we must not let this opportunity for reform pass," said Dr. Calabria. 

 

 

[Guest cherzeca]

https://www.fhfa.gov/Media/PublicAffairs/Pages/Dr-Mark-Calabria-Sworn-In-as-Director-of-the-Federal-Housing-Finance-Agency.aspx

“I enter this office with a sense of urgency. The foundations of our mortgage finance system remain vulnerable, and we must not let this opportunity for reform pass," said Dr. Calabria. 

 

I like that he is focused on reform since the only reform he can focus on is administrative reform.  think back to watt who very clearly was not focused on reform, who always made clear that reform was a congressional item

 

EDIT:  from IMF rag:  "During his remarks, [calabria] said the FHFA had already accomplished much of the important work of housing finance reform under the umbrella of the Housing and Economic Reform Act and earlier legislation. (As a Capitol Hill staffer, Calabria helped draft HERA.)

“My foremost objective is to cement those gains,” he said. “Lock in what you have accomplished. It is all too easy to watch regulatory improvement erode as the memory of the crisis fades.”

 

sounds good to me

[Midas79]

I don't know if this has any significance, but FNMAS and FMCKJ are right at their 52-week highs, while the less liquid prefs are around 10% under, and the commons 18% under.

[rros]

https://www.fhfa.gov/Media/PublicAffairs/Pages/Dr-Mark-Calabria-Sworn-In-as-Director-of-the-Federal-Housing-Finance-Agency.aspx

“I enter this office with a sense of urgency. The foundations of our mortgage finance system remain vulnerable, and we must not let this opportunity for reform pass," said Dr. Calabria. 

 

"The foundations GSEs of our mortgage finance system remain undercapitalized vulnerable".