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

[Ahab]

Maybe people are front-running an adverse outcome for the common? Preferreds don't seem to be taking a similar dive.

[Midas79]

Commons down 12%, have I missed some big news??

 

Maybe they anticipated the NWS ending announcement to be in earnings this morning?  I think that's foolish because that announcement will come from Treasury, FHFA, White House, etc. and not from the two GSE companies themselves.

 

My guess is that it's the 4-month delay in Lamberth's court. But the trial date is set for October 19, 2020, while the original order I saw had the date one month later. So while there is a delay in discovery, there doesn't appear to be one for the trial.

 

https://twitter.com/DoNotLose/status/1156474247889510400

http://www.glenbradford.com/2019/05/fnma-fanniegate-856/

[DRValue]

Commons down 12%, have I missed some big news??

 

Maybe they anticipated the NWS ending announcement to be in earnings this morning?  I think that's foolish because that announcement will come from Treasury, FHFA, White House, etc. and not from the two GSE companies themselves.

 

My guess is that it's the 4-month delay in Lamberth's court. But the trial date is set for October 19, 2020, while the original order I saw had the date one month later. So while there is a delay in discovery, there doesn't appear to be one for the trial.

 

https://twitter.com/DoNotLose/status/1156474247889510400

http://www.glenbradford.com/2019/05/fnma-fanniegate-856/

 

I think you're right, i'm happy with that. Time to get the cheque book out...

[Midas79]

Maybe people are front-running an adverse outcome for the common? Preferreds don't seem to be taking a similar dive.

 

One theory I read is that someone knows that the Fifth Circuit is going to affirm the panel decision and that the price movement is similar to that before the initial Lamberth decision in 2014 that sent the shares tumbling. I wasn't following FnF at that point, but the chart does bear out the similarity.

[allnatural]

From Freddie earnings today- http://www.freddiemac.com/perspectives/david_brickman/20190731_financial_results_2q2019.page

 

Why does it feel like the new CEO is trying to pitch the "new transformed" Freddie Mac to potential investors? Doesn't he know the government owns all the profits here? Language sounds like he is gearing up for a road show.

 

Interesting comments:

 

"The fact that we can consistently report solid results like these, quarter after quarter, is a testament to Freddie Mac’s remarkable transformation not just to a better company with profoundly improved strategies around risk management, but to a fundamentally different company—one that is ready to take on the challenges that will lead us to our next chapter."

 

"Finally, my third priority is to prepare Freddie Mac for a potential end to conservatorship. Nobody knows exactly what the future holds, but the conversation in Washington and the expected release of the Administration’s Housing Finance Reform Plan demand that we be ready to follow the path set by that plan and the milestones established by the FHFA director. And make no mistake, we will be ready."

[Luke 532]

Language sounds like he is gearing up for a road show.

 

Sure does.

[blackcoffee]

From Freddie earnings today- http://www.freddiemac.com/perspectives/david_brickman/20190731_financial_results_2q2019.page

 

Why does it feel like the new CEO is trying to pitch the "new transformed" Freddie Mac to potential investors? Doesn't he know the government owns all the profits here? Language sounds like he is gearing up for a road show.

 

Interesting comments:

 

"The fact that we can consistently report solid results like these, quarter after quarter, is a testament to Freddie Mac’s remarkable transformation not just to a better company with profoundly improved strategies around risk management, but to a fundamentally different company—one that is ready to take on the challenges that will lead us to our next chapter."

 

"Finally, my third priority is to prepare Freddie Mac for a potential end to conservatorship. Nobody knows exactly what the future holds, but the conversation in Washington and the expected release of the Administration’s Housing Finance Reform Plan demand that we be ready to follow the path set by that plan and the milestones established by the FHFA director. And make no mistake, we will be ready."

 

It would be more convincing if they questions open to anyone other than the media - who asked 0 questions! 

[Midas79]

Does anyone here know whether, how many of, and when the discovery documents in Lamberth's court will be released, like the ones in Sweeney's court? I'm spitballing an idea that the delay was mutually agreed upon due to settlement talks, with the aim of those documents never seeing the light of day.

 

Of course, this conflicts with the trial date being moved up by a month, so I'm not sure what's going on. I know that Treasury was dragging its feet on producing documents, but if the plaintiffs really wanted to move things along they would have done something like accused Treasury of contempt, rather than doing the opposite and agreeing to a long extension.

[Guest cherzeca]

commons down big on big volume, not so juniors.  I am going MM on you know, and say that someone read something about the recap plan that is very dilutive to common

[orthopa]

Does anyone here know whether, how many of, and when the discovery documents in Lamberth's court will be released, like the ones in Sweeney's court? I'm spitballing an idea that the delay was mutually agreed upon due to settlement talks, with the aim of those documents never seeing the light of day.

 

Of course, this conflicts with the trial date being moved up by a month, so I'm not sure what's going on. I know that Treasury was dragging its feet on producing documents, but if the plaintiffs really wanted to move things along they would have done something like accused Treasury of contempt, rather than doing the opposite and agreeing to a long extension.

 

Interesting take, that or the assumption is once the treasury plan comes out the lawsuits will go away like Calabria says. Does the trial date even matter if/when the plaintiffs are satisfied and drop the suit?

[orthopa]

commons down big on big volume, not so juniors.  I am going MM on you know, and say that someone read something about the recap plan that is very dilutive to common

 

Another good guess on a slow summer afternoon. So far we have.

 

1. Plan leaked a little and very dilutive to common

 

2. Delay in discovery but has hidden silver lining of settlements.

 

3. Freddie sweeping profits discouraged those hoping for a surprise

 

 

Throwing my hat in the ring I would say although not nearly apples for apples Freddie sending 1.8B to treasury means more capital needed via IPO for FNF. Not 10% more though....

 

 

I think we need to see more heavy selling of the common over next couple days and then I would really start to wonder if some details leaked out. So far today ~75 million dollars worth of fannie traded. Not necessarily hedge funds unloading levels but if it continues heavily and prfd stay where they are on normal volume something may have leaked.  All fun speculation of course.  ;D

[rros]

Maybe people are front-running an adverse outcome for the common? Preferreds don't seem to be taking a similar dive.

 

One theory I read is that someone knows that the Fifth Circuit is going to affirm the panel decision and that the price movement is similar to that before the initial Lamberth decision in 2014 that sent the shares tumbling. I wasn't following FnF at that point, but the chart does bear out the similarity.

It is not the same pattern. Back then, preferreds closed Sept 2014 below the 5 month moving average for the 1st time in over 2 years. They solidly broke long term support (before the ruling). In today's monthly close, fmckj and fnmas are trading above long term support. fnmat needs to regain it at $10.68 before eod. Not that it means anything. We could still get some shitty news tomorrow and suffer another Lamberth.

[Guest cherzeca]

there was a leak in the DC D Ct Perry opinion, and plenty of DC GSE haters were happy to act on the leak to profit from the "bad" news.  D Cts can be leaky. there is no real infrastructure, just a judge and his clerk, and some staff for the entire local district court.  a federal circuit court in Texas/Louisiana is less likely to be a loosely run ship...though there are 16 judges (and therefore clerks) so there are more lips to be loose.

 

also, since Perry is a prior example, traders would be wise to sell on any initial sell activity, so "second time around" should be more pronounced.  I think this is a fake tell, but we shall see

[muscleman]

Maybe people are front-running an adverse outcome for the common? Preferreds don't seem to be taking a similar dive.

 

One theory I read is that someone knows that the Fifth Circuit is going to affirm the panel decision and that the price movement is similar to that before the initial Lamberth decision in 2014 that sent the shares tumbling. I wasn't following FnF at that point, but the chart does bear out the similarity.

It is not the same pattern. Back then, preferreds closed Sept 2014 below the 5 month moving average for the 1st time in over 2 years. They solidly broke long term support (before the ruling). In today's monthly close, fmckj and fnmas are trading above long term support. fnmat needs to regain it at $10.68 before eod. Not that it means anything. We could still get some shitty news tomorrow and suffer another Lamberth.

 

Why do you treat the 5 month moving average as the holy grail here?

It was broken a few times in the past few years, and you never sold. Isn't the 5 month MA just noise for you?

Or is it another way to rationalize holding the stock? And once it is broken, stop talking about it and find another talking point to rationalize holding the stock?

 

I don't mean to offend you. Just some challenging thoughts.  ;)

 

And Midas, you kept asking me for names. I kept forgetting who said what. At least I remember now about rros's 5 month MA comments. Again, I want to reiterate that I have no intention to "Hope anyone would lose money". This is just an anonymous internet forum that no one knows who the other guy is.

 

 

 

[rros]

I do not need to be challenged by you.

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/enph-enphase-energy/

 

That's a 25+ bagger.

 

Post yours.

[DRValue]

So I've woken up to the commons recovering losses. Looking at orthopas post, we must surely conclude that;

 

1. Plan leaked a little and isn't very dilutive to common

 

2. No Delay in discovery and silver lining of settlements is now known.

 

3. Freddie sweeping profits encouraged those hoping for a surprise

 

I've also missed my buying opportunity.

 

I suppose price could have recovered due to the market anticipating Fannie earnings providing more and better news.

 

This market is CRAZY!

[DRValue]

Or maybe it was the Fed cut.

[muscleman]

I do not need to be challenged by you.

http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/enph-enphase-energy/

 

That's a 25+ bagger.

 

Post yours.

 

That’s nice. Congrats!

I was just trying to point out things that as a trader, I’d be cautious with. Since you are a long term investor, I guess things may work differently, and further discussion will result in nothing more than frustration, so I’ll just stop here.

 

[allnatural]

Fannie CEO talking about attracting private capital (presumably via IPO once FHFA completes its capital framework).

 

"As we've said before, we believe that a robust and sensible capital regime for the GSEs is necessary both to protect taxpayers in future housing downturns and to sustainably attract private capital to the housing finance system. We look forward to the completion of the capital framework currently under consideration by our regulator."

[DRValue]

Fannie CEO talking about attracting private capital (presumably via IPO once FHFA completes its capital framework).

 

"As we've said before, we believe that a robust and sensible capital regime for the GSEs is necessary both to protect taxpayers in future housing downturns and to sustainably attract private capital to the housing finance system. We look forward to the completion of the capital framework currently under consideration by our regulator."

 

"Sensible" is the stand out word to me. Hopefully roe becomes more relevant.

[Guest cherzeca]

@allnatural

 

it seems both ceos are ready to go.  they are new and it would appear not eager to run conservatees for very long

[Luke 532]

One major Treasury obstacle/hurdle nearly completed.  Congress passed debt ceiling, Trump to sign. 

[DRValue]

One major Treasury obstacle/hurdle nearly completed.  Congress passed debt ceiling, Trump to sign.

 

Watched a calabria talk at ginnie Mae, given on 23 July. He said he hoped to see the treasury plan released by the end of the month. So with the budget passed, plan could be any day now.

[allnatural]

Can you please share the video?

 

One major Treasury obstacle/hurdle nearly completed.  Congress passed debt ceiling, Trump to sign.

 

Watched a calabria talk at ginnie Mae, given on 23 July. He said he hoped to see the treasury plan released by the end of the month. So with the budget passed, plan could be any day now.

[Midas79]

One major Treasury obstacle/hurdle nearly completed.  Congress passed debt ceiling, Trump to sign.

 

Watched a calabria talk at ginnie Mae, given on 23 July. He said he hoped to see the treasury plan released by the end of the month. So with the budget passed, plan could be any day now.

 

Unfortunately, it was just the video that was posted on July 23. The conference itself was June 13-14, and they were kind enough to print that on the podium.

 

The Treasury plan has been significantly delayed and we can only guess as to why. I don't think it was just the debt ceiling because that didn't really become an issue/crisis until recently.

 

Can you please share the video?