investorG Posted March 20, 2020 Share Posted March 20, 2020 Why would Calabria mention going to congress today for help given the sr pref capacity still exists? dont know but I like it. maybe he sees the senior prefs as something that is so yesterday... that's one way to look at it. I hope so. another way would be that the 6-8 weeks comment lines up with the (perhaps arbitrary) late may capital rule new timing -- suggesting they could re-evaluate all of their plans at that point and perhaps go in a fresh direction. if the stress test outcomes play out over the next 6-24 months, raising external capital in size is unlikely in addition to the lack of retained earnings build. Link to comment Share on other sites More sharing options...
Wiggins Posted March 20, 2020 Share Posted March 20, 2020 Why would Calabria mention going to congress today for help given the sr pref capacity still exists? Because they're being asked to suspend mortgage payments but it's not their fault but the virus' fault. He's actually protecting shareholders. Link to comment Share on other sites More sharing options...
allnatural Posted March 20, 2020 Share Posted March 20, 2020 The "public assistance from Congress [or] from the Fed" answer was in response to question on liquidity to pay MBS holders, not regarding having sufficient capital levels at the GSEs (which is what the PSPA credit line allows for). MBS investors have to get paid or else system may unravel. Maybe they are able to pass an explicit MBS gtee at a time like this when bipartisanship is roaring! Link to comment Share on other sites More sharing options...
Guest cherzeca Posted March 20, 2020 Share Posted March 20, 2020 The "public assistance from Congress [or] from the Fed" answer was in response to question on liquidity to pay MBS holders, not regarding having sufficient capital levels at the GSEs (which is what the PSPA credit line allows for). MBS investors have to get paid or else system may unravel. Maybe they are able to pass an explicit MBS gtee at a time like this when bipartisanship is roaring! that is one thing I have been thinking about...any congressional aid bill the addresses the GSEs could very well creep into things that resemble "GSE reform". I distrust congress involvement with the GSEs, but a full faith and credit guarantee would have at least good optics...god knows what else would be in that bill as for paying mbs holders, that is what GSE capital is for. but if congress or better yet the Fed wants to help out that would be good...unless there is a wolf in sheep's clothing Link to comment Share on other sites More sharing options...
muscleman Posted March 20, 2020 Share Posted March 20, 2020 "In a recession the incumbent very rarely wins re-election." I agree with MM here. this bad patch we will be going through for next 6[?] months is not the cause of potus policies. indeed I expect trump to make hay out of fact that he closed travel from china early and Biden criticized him for it. I actually think, assuming we are through crisis and into recovery by fall, that trump's reelection chances will improve vs status quo. praise from Omar! https://nypost.com/2020/03/19/ilhan-omar-offers-trump-rare-praise-for-coronavirus-response/ Strange that all of the sudden, all these Democrats start to praise Trump. What's going on? ::) I thought they would use this as the best opportunity to defeat him in November. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted March 20, 2020 Share Posted March 20, 2020 trump has gone democrat party in essence, huge govt response with free money etc. hard to see how democrats could rationally oppose Link to comment Share on other sites More sharing options...
Midas79 Posted March 20, 2020 Share Posted March 20, 2020 trump has gone democrat party in essence, huge govt response with free money etc. hard to see how democrats could rationally oppose I have to admit, doing what the other party would have done is a pretty effective way to avoid their criticism. Link to comment Share on other sites More sharing options...
Luke 532 Posted March 20, 2020 Share Posted March 20, 2020 Bloomberg Intelligence Regulation Watch: GSE Capital Requirements Ben Elliott Team: Government BI Government Analyst Fannie-Freddie Capital Rule Should Do Job, But Virus a Wild Card Even with FHFA delaying its capital rule proposal until at least May, we are now more confident the regulator will meet investor expectations and be supportive of Fannie Mae and Freddie Mac’s relisting. The constraint now shifts to whether the coronavirus can be contained before doing irreversible damage to the process of returning the GSEs to shareholders. (03/20/20) 1. What’s Next? Next Key Event: ·Re-proposal set for second half of May. ·FHFA’s timeline could slip if the coronavirus isn’t contained. Last Key Event: ·Re-proposal timeline updated to May by Calabria. ·March 18, 2020. Rule re-proposed in May, perhaps. We’re confident the Federal Housing Finance Agency can meet its May deadline if the pandemic allows, but caveat that unsuccessful containment could derail the plan. The proposal would be open for comment for 30-60 days, most likely, and could be completed by year-end. A final rule isn’t as necessary as a well thought out proposal upon which the Treasury Department, the government-sponsored enterprises’ shareholders, potential investors and other stakeholders can base plans and expectations. (03/20/20) 2. What’s the Outlook? Credit Risk Transfers Likely Remain Favored Proposal may exceed expectations. FHFA’s thinking seems to have shifted on GSE capital, greatly limiting downside risk of a suboptimal rule subvertng demand for a relisting of the GSEs. FHFA Director Mark Calabria’s pledge to achieve economic attractiveness and an indication he’s focusing on detailed risk-based rules instead of a draconian leverage requirement suggest to us the proposal will be a net positive for the GSEs, which may even retain some edge over banks if they have more detailed mortgage risk matrixes to work with. (03/20/20) 3. What’s at Stake for Fannie and Freddie? 2018 Proposal: Fannie 3.4%, Freddie 3% MBS dominance for Fannie and Freddie. FHFA may have to de-prioritize its goal of achieving a multi-guarantor future — never easily achievable, in our view — if Fannie and Freddie perform well through the coronavirus crisis. We see less risk that FHFA pursues a leverage constraint that would apply more frequently to limit Fannie and Freddie’s size, given scale may be key to propping up the housing market during a downturn. The proposal’s emphasis on risk-based capital and CRT likely ensure adequate ROE to support a relisting. (03/20/20) 4. What’s at Stake for Mortgage Originators? Fannie, Freddie PLS Treatment May Change Less dependence on Fannie, Freddie. Despite the virus’s destabilizing impact, we expect a new capital rule may make concessions with future portfolio lending or private label securities in mind, though Fannie and Freddie may retain their implicit and explicit guarantee advantage. The proposal’s procyclicality, which would have turbocharged qualified mortgage demand as prices rose, likely remains curtailed, improving bank competitiveness. The rule may reflect a new appreciation for the fragility of some nonbank originators. (03/20/20) 5. What’s the Issue? Rule Documents: ·2018 Enterprise Capital Requirements Proposed Rule (will be superseded by 2020 proposal) Industries Impacted: ·Mortgage gurantors Fannie Mae and Freddie Mac ·Mortgage originators including JPMorgan, Bank of America, Wells Fargo, Quicken Loans, U.S. Bancorp ·Mortgage insurers including Arch Capital, Essent, Genworth, MGIC, Radian, United Guaranty Government Entity: ·Federal Housing Finance Agency (FHFA) Fannie and Freddie’s capital requirements. FHFA is increasingly likely to adhere to its 2018 capital rule proposal when issuing a new version under Director Calabria. The rule likely requires enough capital to be a significant barrier to entry for competitors and takes on a more counter-cyclical character. Under a 2018 proposal, Fannie would have needed $115 billion and Freddie $66 billion as of September 2017 — enough capital to cover the government-sponsored enterprises’ “peak cumulative losses,” according to FHFA. (03/20/20) 6. What Else? Treasury becomes the bottleneck. If an accommodative proposal comes in May, which we see as reasonably likely, the bottleneck will be Treasury’s willingness and ability to proceed, which will depend on virus containment, fallout and the 2020 election. While the proposal will be recognizable, we still expect mark-to-market LTVs to be ditched. Deferred-tax-asset fixes likely remain to avoid large paper losses. The GSEs’ new business model is likely made permanent with exemptions for trust assets and credit risk transfers (CRTs). (03/20/20) Final Rule Likely Informed By 2018 Proposal Link to comment Share on other sites More sharing options...
Guest cherzeca Posted March 20, 2020 Share Posted March 20, 2020 seems to me that all of this is unsupported to say the least, if not dead wrong. CRTs will be favored going forward? give me a break, they are dead with no bids, and underwater. no one is going to buy a new CRT issuance with all of the outstanding CRTs sucking gas. career suicide as for emphasizing scalpel risk-based rules as opposed to axe leverage rule, yes that would be nice and one might gather that from what Calabria just said, but again he also said there wont be much of a difference...so I see no conclusions that can be drawn Link to comment Share on other sites More sharing options...
Fat Pitch Posted March 20, 2020 Share Posted March 20, 2020 So if Mark goes to Congress to ask for help for the GSEs... what makes you think the legacy holders will survive? Link to comment Share on other sites More sharing options...
muscleman Posted March 20, 2020 Share Posted March 20, 2020 FNMAS down 13% today while market is going up. Probably because of what Luke posted. Link to comment Share on other sites More sharing options...
Midas79 Posted March 20, 2020 Share Posted March 20, 2020 FNMAS down 13% today while market is going up. Probably because of what Luke posted. Or, more likely imo, another hedge fund is selling out. I believe this happened on Wednesday also, if this post is correct. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=154435948 Link to comment Share on other sites More sharing options...
muscleman Posted March 20, 2020 Share Posted March 20, 2020 FNMAS down 13% today while market is going up. Probably because of what Luke posted. Or, more likely imo, another hedge fund is selling out. I believe this happened on Wednesday also, if this post is correct. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=154435948 That's also quite possible. This recent market sharp drop is forced liquidation on everything. Even Bitcoin, Gold and Silver got sold off. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted March 20, 2020 Share Posted March 20, 2020 FNMAS down 13% today while market is going up. Probably because of what Luke posted. Or, more likely imo, another hedge fund is selling out. I believe this happened on Wednesday also, if this post is correct. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=154435948 That's also quite possible. This recent market sharp drop is forced liquidation on everything. Even Bitcoin, Gold and Silver got sold off. Seriously - muni bonds are down 8% this month! Link to comment Share on other sites More sharing options...
Luke 532 Posted March 20, 2020 Share Posted March 20, 2020 More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment Link to comment Share on other sites More sharing options...
Fat Pitch Posted March 20, 2020 Share Posted March 20, 2020 Economy is shrinking by -25% next quarter. There's zero chance of a V-shaped recovery when folks are living pay check to pay check. How exactly are mortgages going to get paid? This is much worse than 2008. More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment Link to comment Share on other sites More sharing options...
investorG Posted March 20, 2020 Share Posted March 20, 2020 More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment That's good news but probably stale. The base case imo is we'll likely need more capital from Fed / Congress (per calabria). If so, I guess we'll hope that at that time they treat the prior sr pref as paid off and the forward looking dilution comes from a) existing warrants and b) the incremental capital takedown (25-50bn?). Link to comment Share on other sites More sharing options...
Guest cherzeca Posted March 20, 2020 Share Posted March 20, 2020 More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment I dont see any reference to virus-induced recession. ;) I expect opinion writing to proceed at scotus. some clerk is working on first draft of Seila opinion from home. discovery of treasury may or may not be continuing in class action case, but should be if discovery materials are all digitally based...attorneys can review all of this from home logged into firm's network Link to comment Share on other sites More sharing options...
muscleman Posted March 20, 2020 Share Posted March 20, 2020 More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment It’ll be fun to find all the prior ACG bullish call dates and map them on the chart. I only remember last March or so they had a wildly bullish call right at the top. The price retraced quite a bit. But I lost track since last May. Link to comment Share on other sites More sharing options...
Guest Covid-19_Survivor Posted March 20, 2020 Share Posted March 20, 2020 Yeah, I don't think this is an appropriate time to mock those trying help. Kinda an unexpected turn of events we're dealing with, what with a flu being hyped to death by brain-dead politicians and media. In other news, it's sad that I was 1/2 a click away from selling FNMAH at 9.70, and instead added to FMCCJ at 10. But then again, maybe that's why I'm still up 33% on my holdings (down, net, on all my FnF positions). Link to comment Share on other sites More sharing options...
Luke 532 Posted March 20, 2020 Share Posted March 20, 2020 More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment It’ll be fun to find all the prior ACG bullish call dates and map them on the chart. I only remember last March or so they had a wildly bullish call right at the top. The price retraced quite a bit. But I lost track since last May. Muscle Man (MM) = Mr. Market (MM) Link to comment Share on other sites More sharing options...
muscleman Posted March 21, 2020 Share Posted March 21, 2020 More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment It’ll be fun to find all the prior ACG bullish call dates and map them on the chart. I only remember last March or so they had a wildly bullish call right at the top. The price retraced quite a bit. But I lost track since last May. Muscle Man (MM) = Mr. Market (MM) LOL that’s funny. But isn’t there a saying that Mr Market is correct most of the time? Value discrepancies only happen occasionally. Link to comment Share on other sites More sharing options...
orthopa Posted March 21, 2020 Share Posted March 21, 2020 More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment Thanks Luke. Was this from their podcast? I know David Metzner is doing some podcasts for ACG. They really have been the most accurate thus far with their information so have to at least put their reputation behind it. Relisted as in on the NYSE? Rosner had advocated for this a while back. The idea is that it take it off the OTC and legitimizes the securities? I find it interesting that ACG had access to both treasury and FHFA, great if thats the case. Link to comment Share on other sites More sharing options...
Luke 532 Posted March 21, 2020 Share Posted March 21, 2020 More from ACG call Wednesday, March 11th: -ACG never been more positive that conservatorship is about to end -FHFA and Admin want this done -Taking irreversible actions even if Trump loses -Expect re-listed by Fall at the latest (before offering) -Met with Treasury and FHFA and positive PSPA amendment is happening -Politics won't stop PSPA amendment Thanks Luke. Was this from their podcast? From a conference call, but I heard it second-hand, so take it with a grain of salt. The re-list and access to Treasury was news to me. Link to comment Share on other sites More sharing options...
Luke 532 Posted March 22, 2020 Share Posted March 22, 2020 See attached... Edit: FWIW, just asked him and Dick Bove agrees with Bill Dallas' comments in screenshots attached. Link to comment Share on other sites More sharing options...
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