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

[muscleman]

You used past tense. "Once again the price behaviors change and TA warnings all over the place before bad news came out."

 

That is just a summary. Here is the actual document.

 

So now fhfa believe it's constitutional.

 

Trying to push the decision back? Would that even work?

 

Wow. I was busy working yesterday and just saw this.  :o This is mind blowing to me.

Once again the price behaviors change and TA warnings all over the place before bad news came out.

 

Forecasting is always easier in hindsight

 

This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight?

 

LOL. I can't talk about the past. I can't talk about the present. I can't talk about the future. What can I talk about?

[SnarkyPuppy]

You used past tense. "Once again the price behaviors change and TA warnings all over the place before bad news came out."

 

That is just a summary. Here is the actual document.

 

So now fhfa believe it's constitutional.

 

Trying to push the decision back? Would that even work?

 

Wow. I was busy working yesterday and just saw this.  :o This is mind blowing to me.

Once again the price behaviors change and TA warnings all over the place before bad news came out.

 

Forecasting is always easier in hindsight

 

This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight?

 

LOL. I can't talk about the past. I can't talk about the present. I can't talk about the future. What can I talk about?

 

Well humor me then.  What happens next?

[muscleman]

You used past tense. "Once again the price behaviors change and TA warnings all over the place before bad news came out."

 

That is just a summary. Here is the actual document.

 

So now fhfa believe it's constitutional.

 

Trying to push the decision back? Would that even work?

 

Wow. I was busy working yesterday and just saw this.  :o This is mind blowing to me.

Once again the price behaviors change and TA warnings all over the place before bad news came out.

 

Forecasting is always easier in hindsight

 

This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight?

 

LOL. I can't talk about the past. I can't talk about the present. I can't talk about the future. What can I talk about?

 

Well humor me then.  What happens next?

 

I don’t have a clear view of that right now.

[DRValue]

You used past tense. "Once again the price behaviors change and TA warnings all over the place before bad news came out."

 

That is just a summary. Here is the actual document.

 

So now fhfa believe it's constitutional.

 

Trying to push the decision back? Would that even work?

 

Wow. I was busy working yesterday and just saw this.  :o This is mind blowing to me.

Once again the price behaviors change and TA warnings all over the place before bad news came out.

 

Forecasting is always easier in hindsight

 

This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight?

 

LOL. I can't talk about the past. I can't talk about the present. I can't talk about the future. What can I talk about?

 

Well humor me then.  What happens next?

 

I don’t have a clear view of that right now.

 

Wow, TA really is like shaking an 8 ball!

[SnarkyPuppy]

You used past tense. "Once again the price behaviors change and TA warnings all over the place before bad news came out."

 

That is just a summary. Here is the actual document.

 

So now fhfa believe it's constitutional.

 

Trying to push the decision back? Would that even work?

 

Wow. I was busy working yesterday and just saw this.  :o This is mind blowing to me.

Once again the price behaviors change and TA warnings all over the place before bad news came out.

 

Forecasting is always easier in hindsight

 

This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight?

 

LOL. I can't talk about the past. I can't talk about the present. I can't talk about the future. What can I talk about?

 

Well humor me then.  What happens next?

 

I don’t have a clear view of that right now.

 

I'm stunned

[muscleman]

:o :o

SnarkyPuppy, DRValue, you guys are just making fun of me right?

I am stunned that you are stunned.

 

I was lucky enough to be trained by a really great trader. He told me something like:

"There are two types of poker players. The one that play aggreesively when they have good hands and fold when they don't. The one that always seek for actions. The second type don't even deserve success."

 

While I am not saying which type you guys are, I would certainly be surprised that you guys think I would be the second type. ;)

[buffetteer1984]

You used past tense. "Once again the price behaviors change and TA warnings all over the place before bad news came out."

 

That is just a summary. Here is the actual document.

 

So now fhfa believe it's constitutional.

 

Trying to push the decision back? Would that even work?

 

Wow. I was busy working yesterday and just saw this.  :o This is mind blowing to me.

Once again the price behaviors change and TA warnings all over the place before bad news came out.

 

Forecasting is always easier in hindsight

 

This is an absurd comment. I've always commented in real time. Where did you get the impression that I was talking about this in hindsight?

 

LOL. I can't talk about the past. I can't talk about the present. I can't talk about the future. What can I talk about?

 

Well humor me then.  What happens next?

 

I don’t have a clear view of that right now.

 

I'm stunned

 

I don't understand the attitude. Muscleman is obviously trying to contribute in a respectable manner and you're sitting on your high horse judging.

[Guest cherzeca]

while none of us moderates this thread, I would suggest that we should calm down.  MM has explained his method and while I for one dont really understand it, what I do understand is that he feels comfortable using it, and it works for him psychologically.

 

I for one use this thread to think through my ideas, which I do better when I write than just sit with a gin in my hand, and look for feedback to my ideas.  another valuable resource is your picking up on events and reporting that I miss. most of the news I read on this thread is new to me when I read it.

 

some feedback I disagree with, of course, and some I dont understand. and then there is Emily. but I dont think MM needs to defend TA on this thread.  as for his poker example, it is hard enough with the GSEs to understand what kind of hand you are playing from time to time, so let's all proceed with the humility that this investing situation requires of us

[investorG]

That is just a summary. Here is the actual document.

 

the meat of Collins is in the APA claim IMO.  it's cleaner and more direct.  In addition, Calabria's change is an attempt to protect his job for a full term which makes sense.   

 

the pending Collins verdict is huge.  a loss, and we're at the mercy of the govt, price targets and goals will likely be cut for both preferred and common.  a win, and we have a real seat in negotiations.    guessing here, but that's likely why things are stalled, everyone is waiting for this.  I'm nervous for the outcome. 

 

Good luck, everyone. 

[muscleman]

while none of us moderates this thread, I would suggest that we should calm down.  MM has explained his method and while I for one dont really understand it, what I do understand is that he feels comfortable using it, and it works for him psychologically.

 

I for one use this thread to think through my ideas, which I do better when I write than just sit with a gin in my hand, and look for feedback to my ideas.  another valuable resource is your picking up on events and reporting that I miss. most of the news I read on this thread is new to me when I read it.

 

some feedback I disagree with, of course, and some I dont understand. and then there is Emily. but I dont think MM needs to defend TA on this thread.  as for his poker example, it is hard enough with the GSEs to understand what kind of hand you are playing from time to time, so let's all proceed with the humility that this investing situation requires of us

 

Thank you Chris. I guess it is wise to stop defending TA then. After all, people on this thread find it hard to understand. Let's use this thread to focus on the GSE events and fundamental analysis.

I wouldn't be able to do well either without watching people posting those event here. For example, I didn't know Bill Maloni is the whack job. I didn't know he was spreading rumors about the 5th court ruling coming on that Friday afternoon. Those are the type of events that turned me from very bullish to bearish.

 

[investorG]

The Hamish hume letter regarding conversion is surprising to me.  maybe he wants them to turn back on dividends and certain preferred classes could possibly trade > par?  or is he mainly concerned about new lawsuits from common holders slowing down the whole process if they get diluted too much? 

[muscleman]

That is just a summary. Here is the actual document.

 

the meat of Collins is in the APA claim IMO.  it's cleaner and more direct.  In addition, Calabria's change is an attempt to protect his job for a full term which makes sense.   

 

the pending Collins verdict is huge.  a loss, and we're at the mercy of the govt, price targets and goals will likely be cut for both preferred and common.  a win, and we have a real seat in negotiations.    guessing here, but that's likely why things are stalled, everyone is waiting for this.  I'm nervous for the outcome. 

 

Good luck, everyone.

 

If Trump is the law and order guy, so should his workforce like Calabria. His attempt to defend the constitutionality of FHFA could have side effects in the long run.

1. Let's say we lose Collins, and Calabria magically makes preferred whole. Later when he steps down, a Dem appointed FHFA director could have so much power that he could do another 3rd amendment. What could you do then?

2. If the above concern is real, then the current IPO would be even harder, because shareholders would ask that same question. They won't do it unless they feel protected.

3. The fact that Calabria needs to defend his job implies that this recap process may take way longer than what we thought, which is bearish for us.

[Guest cherzeca]

That is just a summary. Here is the actual document.

 

the meat of Collins is in the APA claim IMO.  it's cleaner and more direct.  In addition, Calabria's change is an attempt to protect his job for a full term which makes sense.   

 

the pending Collins verdict is huge.  a loss, and we're at the mercy of the govt, price targets and goals will likely be cut for both preferred and common.  a win, and we have a real seat in negotiations.    guessing here, but that's likely why things are stalled, everyone is waiting for this.  I'm nervous for the outcome. 

 

Good luck, everyone.

 

+1

[SnarkyPuppy]

Fair, my comments were unnecessary and didn't add value.  Apologies.  This thread has been extremely beneficial to me. 

[Guest cherzeca]

The Hamish hume letter regarding conversion is surprising to me.  maybe he wants them to turn back on dividends and certain preferred classes could possibly trade > par?  or is he mainly concerned about new lawsuits from common holders slowing down the whole process if they get diluted too much?

 

conversion will require coercion, and Hume is against coercion.  why coercion? because treasury will want to eliminate the junior prefs and to do this it needs at least 2/3rds of each class to agree to convert into common.  this is a high threshold which is why I believe the conversion rate that will be on offer will be acceptable, but treasury won't want the remaining non-converters to have hold-up/nuisance value, so in connection with the conversion each holder will consent to amend the junior pref on the way into common that will trash the pref...which will force the remaining minority to convert as well.

 

now can treasury use this exit consent coercion to try to impose a harsh conversion rate?  sure, and this is what I think hume is concerned about.  but this is where big junior holders need to stand firm and in effect protect us little guys.

[SnarkyPuppy]

That is just a summary. Here is the actual document.

 

the meat of Collins is in the APA claim IMO.  it's cleaner and more direct.  In addition, Calabria's change is an attempt to protect his job for a full term which makes sense.   

 

the pending Collins verdict is huge.  a loss, and we're at the mercy of the govt, price targets and goals will likely be cut for both preferred and common.  a win, and we have a real seat in negotiations.    guessing here, but that's likely why things are stalled, everyone is waiting for this.  I'm nervous for the outcome. 

 

Good luck, everyone.

 

This makes sense from Calabria's perspective but I think the negative way of looking at this is from a signaling perspective.  This seems to be a clear signal that Otting and Calabria (and through possible extension, Mnuchin) were not necessarily as coordinated as I initially thought. 

 

Part of why I've been ignored the noise of some of Calabria's comments is the simple thesis that these extremely calculated men in high visibility positions are not publicly commenting an a restructuring with massive execution risk without clear coordination and strategy behind the scenes. 

 

The amateurish about face on the constitutionality claim seems to contradict this thesis. 

 

The bullish way of looking at the change is simply to try to buy time on the release of the Tsy plan and Sr Pref amendment.  But if that's the case, it necessarily implies that the plan is inconsistent with a positive remedy from the en banc ruling...

[Guest cherzeca]

as a lawyer I find Calabria's move to be stupid and embarrassing.  but I also agree with IG that taking the position his office is constitutionally structured may help him/the agency/the recap down the road.  I also dont think he did this without treasury's concurrence, and treasury must have had its reasons for thinking this was a good idea.

[SnarkyPuppy]

as a lawyer I find Calabria's move to be stupid and embarrassing.  but I also agree with IG that taking the position his office is constitutionally structured may help him/the agency/the recap down the road.  I also dont think he did this without treasury's concurrence, and treasury must have had its reasons for thinking this was a good idea.

 

Why the action by Otting then?  Under this theory, he either acted on his own or the plan has changed

[DRValue]

:o :o

SnarkyPuppy, DRValue, you guys are just making fun of me right?

 

I'm only joking, but i did find it funny.  :D

[Guest cherzeca]

More receivership BS from IMF

 

“If you’re wondering why everyone in the mortgage industry is waiting with bated breath for the new capital standards for Fannie Mae and Freddie Mac, it’s simple: Those standards, once cast in stone, will give the Federal Housing Finance Agency a powerful tool. One GSE observer who used to work on Capitol Hill told IMFnews those standards will give the FHFA legal cover to declare Fannie (or Freddie, take your pick) “critically” undercapitalized. Once that determination is made, the agency can move to terminate the conservatorship and enter into a receivership…

 

The next step might be to create a limited liability regulated entity (LLRE) which would succeed the GSE. After that, the LLRE (once capital is raised) becomes a new company and the charter is sold to new owners. From what we understand, the FHFA has the legal power to sell the charter. We also understand that the Treasury Department under former Senior Counselor Craig Phillips was well aware of all of this. More to come in the weeks ahead…”

[Jcmeg35]

Clear FUD. The person they quote doesn't say he heard that this was the plan or anything close to it. I guess can't expect much during this news lul and perceived delay in the release of the plan...

 

More receivership BS from IMF

 

“If you’re wondering why everyone in the mortgage industry is waiting with bated breath for the new capital standards for Fannie Mae and Freddie Mac, it’s simple: Those standards, once cast in stone, will give the Federal Housing Finance Agency a powerful tool. One GSE observer who used to work on Capitol Hill told IMFnews those standards will give the FHFA legal cover to declare Fannie (or Freddie, take your pick) “critically” undercapitalized. Once that determination is made, the agency can move to terminate the conservatorship and enter into a receivership…

 

The next step might be to create a limited liability regulated entity (LLRE) which would succeed the GSE. After that, the LLRE (once capital is raised) becomes a new company and the charter is sold to new owners. From what we understand, the FHFA has the legal power to sell the charter. We also understand that the Treasury Department under former Senior Counselor Craig Phillips was well aware of all of this. More to come in the weeks ahead…”

[Wiggins]

I think this would make a takings case a slam dunk.

 

A) Gov't declares NWS along with a "new capital paradigm" whereby a funding commitment serves to make GSEs safe and sound, and successfully argues this for years in court.

 

B) Whoopsie-daisies, just kidding, that was all BS and now that all capital has been siphoned out, Gov't deems GSEs critically undercapitalized thus receivership is in order.

 

Schizophrenia is too nice of a word to describe this.

 

 

More receivership BS from IMF

 

“If you’re wondering why everyone in the mortgage industry is waiting with bated breath for the new capital standards for Fannie Mae and Freddie Mac, it’s simple: Those standards, once cast in stone, will give the Federal Housing Finance Agency a powerful tool. One GSE observer who used to work on Capitol Hill told IMFnews those standards will give the FHFA legal cover to declare Fannie (or Freddie, take your pick) “critically” undercapitalized. Once that determination is made, the agency can move to terminate the conservatorship and enter into a receivership…

 

The next step might be to create a limited liability regulated entity (LLRE) which would succeed the GSE. After that, the LLRE (once capital is raised) becomes a new company and the charter is sold to new owners. From what we understand, the FHFA has the legal power to sell the charter. We also understand that the Treasury Department under former Senior Counselor Craig Phillips was well aware of all of this. More to come in the weeks ahead…”

[DRValue]

Clear FUD. The person they quote doesn't say he heard that this was the plan or anything close to it. I guess can't expect much during this news lul and perceived delay in the release of the plan...

 

More receivership BS from IMF

 

“If you’re wondering why everyone in the mortgage industry is waiting with bated breath for the new capital standards for Fannie Mae and Freddie Mac, it’s simple: Those standards, once cast in stone, will give the Federal Housing Finance Agency a powerful tool. One GSE observer who used to work on Capitol Hill told IMFnews those standards will give the FHFA legal cover to declare Fannie (or Freddie, take your pick) “critically” undercapitalized. Once that determination is made, the agency can move to terminate the conservatorship and enter into a receivership…

 

The next step might be to create a limited liability regulated entity (LLRE) which would succeed the GSE. After that, the LLRE (once capital is raised) becomes a new company and the charter is sold to new owners. From what we understand, the FHFA has the legal power to sell the charter. We also understand that the Treasury Department under former Senior Counselor Craig Phillips was well aware of all of this. More to come in the weeks ahead…”

 

If they only knew we've monitored every news story of the past 4 years.

 

If they only knew we've lingered on every sentence uttered by every player in this game.

 

If they only knew we've analysed the context of words and the tone expressed.

 

If they only knew we know all the paid for opinions and vested interests.

 

Maybe then they could come up with something that would work. Maybe.

 

But I doubt it.

[Luke 532]

https://twitter.com/timpagliara/status/1149439305129111552?s=19

 

"Discovery production in Lamberth Court next week. Everyone cooperating but Treasury. Imagine that. Motion to compel will follow."

[SnarkyPuppy]

Clear FUD. The person they quote doesn't say he heard that this was the plan or anything close to it. I guess can't expect much during this news lul and perceived delay in the release of the plan...

 

More receivership BS from IMF

 

“If you’re wondering why everyone in the mortgage industry is waiting with bated breath for the new capital standards for Fannie Mae and Freddie Mac, it’s simple: Those standards, once cast in stone, will give the Federal Housing Finance Agency a powerful tool. One GSE observer who used to work on Capitol Hill told IMFnews those standards will give the FHFA legal cover to declare Fannie (or Freddie, take your pick) “critically” undercapitalized. Once that determination is made, the agency can move to terminate the conservatorship and enter into a receivership…

 

The next step might be to create a limited liability regulated entity (LLRE) which would succeed the GSE. After that, the LLRE (once capital is raised) becomes a new company and the charter is sold to new owners. From what we understand, the FHFA has the legal power to sell the charter. We also understand that the Treasury Department under former Senior Counselor Craig Phillips was well aware of all of this. More to come in the weeks ahead…”

 

This is quite literally what Calabria discussed a few years ago (YouTube video posted previously in this thread).  Also consistent w his prior writings.  Is this explicitly inconsistent with anything munchin or Calabria has said publicly?  Immediate thing that comes to mind is "there will be two companies called Fannie and Freddie" in 5 years as Calabria had said publicly.  But in the aforementioned YouTube video he quite literally talks about creating an LLRE which has a 5 year life. 

 

Sure would be one way of a "waking congress up and accelerating the process of getting them to act"

 

Would also be consistent with "the companies will be on their own to build capital". 

 

Obviously I don't think this is a realistic outcome given risks involved but Calabria seems to have some challenges with realistic constraints.