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


twacowfca

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Guest cherzeca

collins filed cert with SCOTUS on relief on the constitutional claim:  https://static.reuters.com/resources/media/editorial/20190926/fhfacertpetition.pdf

 

scotus has granted cert on the Puerto Rico finance board, to be heard later this fall.  seems Cooper & Kirk wanted to join the party for fall consideration at scotus. puts pressure on fhfa/treasury

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collins filed cert with SCOTUS on relief on the constitutional claim:  https://static.reuters.com/resources/media/editorial/20190926/fhfacertpetition.pdf

 

scotus has granted cert on the Puerto Rico finance board, to be heard later this fall.  seems Cooper & Kirk wanted to join the party for fall consideration at scotus. puts pressure on fhfa/treasury

 

if the SC takes this case, they would likely take the APA claim at the same time also.?  that could lead to complacency and delay on any prior admin action until next summer (or never) after the court rules?

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Guest cherzeca

collins filed cert with SCOTUS on relief on the constitutional claim:  https://static.reuters.com/resources/media/editorial/20190926/fhfacertpetition.pdf

 

scotus has granted cert on the Puerto Rico finance board, to be heard later this fall.  seems Cooper & Kirk wanted to join the party for fall consideration at scotus. puts pressure on fhfa/treasury

 

if the SC takes this case, they would likely take the APA claim at the same time also.?  that could lead to complacency and delay on any prior admin action until next summer (or never) after the court rules?

 

strong likelihood that scotus will not take up the APA claim decision at same time, as 5th C APA decision was not a final judgment.  scotus doesn't want to review opinions, it wants to review judgments with orders for relief. since it is still uncertain what the district court does in terms of trial, or getting govt to answer and then taking summary judgment papers, and what the relief could be (theoretical possible range is from $0 to >$100B), this is precisely why scotus is unlikely to hear the APA claim until after the district court enters a judgment applying the law she has been instructed to by the 5th C en banc.

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Guest cherzeca

Well looks like today is the day, unless it gets pushed to Monday to really test everyone's patience.  :o

 

assuming Mnuchin celebrates jewish high holy days, today is the day.  unless the deep state at WH scores another victory

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Well looks like today is the day, unless it gets pushed to Monday to really test everyone's patience.  :o

 

assuming Mnuchin celebrates jewish high holy days, today is the day.  unless the deep state at WH scores another victory

 

Unlikely as it is, is there anything preventing them from releasing news about a letter agreement over the weekend or even later on? All that matters is that it is signed before the end of the day on the 30th, not that the public is told about it.

 

I know I'm grasping at straws here, though. There really is no reason to wait this long if this is really what they're going to do.

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at this late stage with no news, the sweep is very likely going through. 

 

any guesses on whether this is a technical delay -- they wanted 1 more from 2q earnings -- or something more problematic like a change in direction from any recent news on the legal or political front?

 

thank you.

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Fannie, Freddie Permitted to Boost Capital Cushions by Billions

https://www.bloomberg.com/news/articles/2019-09-30/fannie-freddie-permitted-to-boost-capital-cushions-by-billions

 

    -Fannie allowed to hold $25 bln, and Freddie can retain $20 bln

    -Treasury, FHFA announcement part of effort to end U.S. control

 

For those that want a link to FHFA's press release:

https://www.fhfa.gov/Media/PublicAffairs/Pages/Statement-from-FHFA-Director-Mark-Calabria-on-Letter-Agreement-with-Treasury-to-Increase-Fannie-Freddie-Capital-Retention.aspx

“The Enterprises are leveraged nearly 1,000-to-one, ensuring they would fail during an economic downturn – exposing taxpayers once again. This letter agreement between Treasury and FHFA, which allows the Enterprises to retain capital of up to $45 billion combined, is an important milestone on the path to reform,” said FHFA Director Mark Calabria. “FHFA commits to working with Treasury in the coming months to amend the share agreements and further advance broader housing finance reform. These reform goals include limiting the government’s role in housing finance, increasing marketplace competition, focusing on affordable housing, and sustainable homeownership. The status quo is not an option. Now is the time to act.”

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Some interesting tidbits from the press releases:

 

Calabria on urgency:"The status quo is not an option. Now is the time to act.

 

Mnuchin on an additional PSPA amendment + RECAP: Treasury and each of Fannie Mae and Freddie Mac also agreed to negotiate an additional amendment to the PSPAs that would further enhance taxpayer protections by adopting covenants that are broadly consistent with the recommendations for administrative reforms contained in the Plan.

 

The Plan also recommended that Treasury and FHFA develop recapitalization plans for Fannie Mae and Freddie Mac after identifying and assessing the full range of strategic options. Subsequent amendments to the PSPAs may be appropriate to facilitate the implementation of any eventual recapitalization plans.

 

I think Ben Elliot @ bloomberg intelligence nailed it, "We think it paves the way for a robust deal settling shareholder litigation and eliminating Treasury's senior preferred stake"

 

The incoming PSPA amendment should formally kills the NWS, deal with the senior pfds, finalize the commitment line / fee, and settle w/ shareholders.

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Referring to the Fannie Mae letter agreement text in above link...

 

Does part III refer to a future amendment to the PSPA?...The big one we are all looking forward to?  If so, I wonder why this language was put into this letter agreement; any thoughts on that?

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That's exactly what it's referring to.. a PSPA amendment coming soon.

 

 

 

 

Referring to the Fannie Mae letter agreement text in above link...

 

Does part III refer to a future amendment to the PSPA?...The big one we are all looking forward to?  If so, I wonder why this language was put into this letter agreement; any thoughts on that?

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Close to zero? This is most likely a year end event, possibly slips into Q1.

 

The incoming PSPA amendment should formally kills the NWS, deal with the senior pfds, finalize the commitment line / fee, and settle w/ shareholders.

 

What does everybody think the odds are of this getting done in the month of October?  Thanks in advance for replies.

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A SCOTUS decision would be helpful in sorting out the constitutional issues as well as confirming and putting guardrails on the APA malfeasance upon which the 5th circuit en banc so eloquently ruled. No matter what Mnuchin does, there will be uncertainty for investors until all that is settled. The only thing that can be settled by the end of the year is SCOTUS just taking the case. But methinks Mnuchin has to factor all that in including a likely final SCOTUS ruling before any negiotiation is settled. I'm not saying Mnuchin will wait, just that he has a lot to consider.

 

The incoming PSPA amendment should formally kills the NWS, deal with the senior pfds, finalize the commitment line / fee, and settle w/ shareholders.

 

What does everybody think the odds are of this getting done in the month of October?  Thanks in advance for replies.

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Stocks up 3 to 4% but, most traded preferreds down 2%...

 

I wonder what is the message? I mean if it is more time than expected then both should be down.

 

Or it is just that the preferreds moved up on Friday and not the stocks?

 

Is this another one of these algo manipulative thing to sell the news and then grab more at a cheaper price? Price action definitely appears screwed up nowadays as Druckenmiller has observed.

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