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

[Guest cherzeca]

Calabria has no personal interest in seeing Collins decided if the election is Biden or to be determined the week after Election Day. while we all may be wondering what Mnuchin has been doing re the GSEs the last three years, the answer is likely not very much...but he too will see an uncertain election result as motivation to be able to say he fixed the GSEs, as he said he would.  so incentives do seem to line up in a town where personal inventive is power and not financially motivated

[WB_fan82]

There is no way in hell there is a settlement before the election.  The optics look horrific, especially with the yellow press about Freddie and the Kushner multifamily loans.

 

I would also be very surprised if there is a PSPA amendment pre-election, for the same reasons.  The reason being it's too to cast as a windfall for security holders.  B/c make no mistake, GSE securities would fly on either (some chance the common could decline on a PSPA amendment but why chance it).

 

Meanwhile, there is still work to be done.  The capital rule has to be finalized.  Maybe the Freddie stuff is what Calabria means about being bad corporate citizens.

 

Besides, Mnuchin is basically running the government.  Congress, China, stimulus, the economy, he's doing it all.  Where is the facetime for FHFA and settlement and all the provisions that would probably accompany a PSPA amendment?

 

Post election, different story.  There is still a month between the election and the Court.  That's plenty of time to settle and in fact the government has settled other cases in the weeks before oral argument, so it wouldn't be unprecedented either.  Then nobody cares about the optics.

[typicalvalue]

Calabria has no personal interest in seeing Collins decided if the election is Biden or to be determined the week after Election Day. while we all may be wondering what Mnuchin has been doing re the GSEs the last three years, the answer is likely not very much...but he too will see an uncertain election result as motivation to be able to say he fixed the GSEs, as he said he would.  so incentives do seem to line up in a town where personal inventive is power and not financially motivated

 

Agree. When your rely on admin moving personal incentive is more powerful than financial.

[brker_guy]

This family is going to sock it to the taxpayers and the GSEs before they are booted from office:

 

https://www.yahoo.com/huffpost/kushner-companies-freddie-mac-786-million-terms-111315311.html

 

If this isn't a conflict of interest and why there isn't a rush to push for the release of the GSEs, then tell me what is.

[WB_fan82]

Where are the 2020 DFAST results for the GSEs?  Was the deadline extended?

 

"Reporting Format and Timing

The Enterprises must submit results of the

Baseline and Severely Adverse scenarios to

FHFA and the Board on or before May 20,

2020, and must publicly disclose a summary of

the results of only the Severely Adverse

scenario between August 1 and August 15."

 

https://www.fhfa.gov/Media/PublicAffairs/Documents/411/Fannie_Mae/Summary-Instructions-and-Guidance_2020-Reporting-Cycle.pdf

 

 

[investorG]

There is no way in hell there is a settlement before the election.  The optics look horrific, especially with the yellow press about Freddie and the Kushner multifamily loans.

 

I would also be very surprised if there is a PSPA amendment pre-election, for the same reasons.  The reason being it's too to cast as a windfall for security holders.  B/c make no mistake, GSE securities would fly on either (some chance the common could decline on a PSPA amendment but why chance it).

 

Meanwhile, there is still work to be done.  The capital rule has to be finalized.  Maybe the Freddie stuff is what Calabria means about being bad corporate citizens.

 

Besides, Mnuchin is basically running the government.  Congress, China, stimulus, the economy, he's doing it all.  Where is the facetime for FHFA and settlement and all the provisions that would probably accompany a PSPA amendment?

 

Post election, different story.  There is still a month between the election and the Court.  That's plenty of time to settle and in fact the government has settled other cases in the weeks before oral argument, so it wouldn't be unprecedented either.  Then nobody cares about the optics.

 

If they had led with courage they'd likely be monetizing warrants at this moment to pay for a politically beneficial program of their preference. 

 

Rather mnuchin hid behind lawyers the past 20months post-watt and fought to further legitimize the illegal and/or unethical NWS.

 

Could cost them the election when combined with the housing stimulus a semi-capitalized FnF would have provided in 2020.

[typicalvalue]

Find attached senator Warner letter to Calabra/Mnuchin. Could be a sign PSPA amendment is close and we could see it before year end.

GSE_letter.pdf

[Guest cherzeca]

Find attached senator Warner letter to Calabra/Mnuchin. Could be a sign PSPA amendment is close and we could see it before year end.

 

agreed.  given the perspective of history, I can't help but pointing out how feeble this letter is.  if corker were still around, there would have been hell to pay

[Luke 532]

Could be a sign PSPA amendment is close and we could see it before year end.

 

Word on the street is that PSPA is coming around Thanksgiving.

[Jcmeg35]

Where did you hear this? Feel like there have been a lot of rumors over the years that haven’t materialized.

[investorG]

Could be a sign PSPA amendment is close and we could see it before year end.

 

Word on the street is that PSPA is coming around Thanksgiving.

 

I guess the likelihood of this depends on if you believe the market has any predictive power.  I believe it does and therefore am skeptical.

[Guest cherzeca]

Where did you hear this? Feel like there have been a lot of rumors over the years that haven’t materialized.

 

this is plausible for two reasons...it permits time for the potus election to shake out (though I would not be surprised if it is still up in the air by thanksgiving), and it is the perfect time to do something under the radar that some might think is controversial

[Luke 532]

Where did you hear this? Feel like there have been a lot of rumors over the years that haven’t materialized.

 

From somebody that has connections with high-level officials at UST and FHFA.

[Jcmeg35]

Where did you hear this? Feel like there have been a lot of rumors over the years that haven’t materialized.

 

From somebody that has connections with high-level officials at UST and FHFA.

 

Thanks for sharing! Did you get any additional color if this would include a consent decree or just PSPA?

[Luke 532]

Thanks for sharing! Did you get any additional color if this would include a consent decree or just PSPA?

 

Just PSPA around Thanksgiving.

[Jcmeg35]

Thanks for sharing! Did you get any additional color if this would include a consent decree or just PSPA?

 

Just PSPA around Thanksgiving.

 

Got it, thanks a lot!

[orthopa]

Thanks for sharing! Did you get any additional color if this would include a consent decree or just PSPA?

 

Just PSPA around Thanksgiving.

 

This would be before the SCOTUS arguments too which I think makes the most sense of anything timing wise.

 

Apparently there is an Asset backed alert note that came out that UST and FHFA are considering a plan to ram through an effort to end GSE conservatorship if Biden wins. This was the same subscription that said preferred investors were very happy after meeting calabria back in spring/early summer of 2019. I do not have a copy of it. This would be common knowledge if anyone had been reading this board.  ;D

 

 

[Jcmeg35]

For those that have a Real Vision subscription, today @2PM:

https://www.realvision.com/shows/live/videos/the-ultimate-election-trade-fannie-and-freddie-live-with-gabriella-heffesse/

[typicalvalue]

Saw you need a Plus membership to watch it (599$ year), just have an Essential one. If anyone watches and can sumarize Gabby's point's would be great.

[Jcmeg35]

Saw you need a Plus membership to watch it (599$ year), just have an Essential one. If anyone watches and can sumarize Gabby's point's would be great.

 

+1

[orthopa]

https://www.jchs.harvard.edu/sites/default/files/research/files/harvard_jchs_path_gse_reform_layton_2020_0.pdf

 

Interesting read. The possible Biden admin plans make my blood boil and if Trump isnt re-elected I forsee Mnuchin and Calabria doing all they can before inauguration to leave a long lasting mark on the GSEs and not even given a new Biden Treasurer a chance to do much.

 

Multiple times he refers to Calabria's job being at risk with the SCOTUS case. cherzeca this is a question for you. Sometime back I asked or implied that Calabria's job would be on the line with the SCOTUS decision if it ever came down with one next spring or summer. I cited this as additional motivation to settle before oral arguments. You had said if I remember correctly that Calabria essentially had no skin in the game with the case.

 

So is Calabrias removal for cause provision up for decision with the SCOTUS or not? If so I see another reason to settle before oral arguements this time for Calabria to allow him as much time as possible to carry out releasing the GSEs from conservatorship.

 

Thanks

[Guest cherzeca]

https://www.jchs.harvard.edu/sites/default/files/research/files/harvard_jchs_path_gse_reform_layton_2020_0.pdf

 

Interesting read. The possible Biden admin plans make my blood boil and if Trump isnt re-elected I forsee Mnuchin and Calabria doing all they can before inauguration to leave a long lasting mark on the GSEs and not even given a new Biden Treasurer a chance to do much.

 

Multiple times he refers to Calabria's job being at risk with the SCOTUS case. cherzeca this is a question for you. Sometime back I asked or implied that Calabria's job would be on the line with the SCOTUS decision if it ever came down with one next spring or summer. I cited this as additional motivation to settle before oral arguments. You had said if I remember correctly that Calabria essentially had no skin in the game with the case.

 

So is Calabrias removal for cause provision up for decision with the SCOTUS or not? If so I see another reason to settle before oral arguements this time for Calabria to allow him as much time as possible to carry out releasing the GSEs from conservatorship.

 

Thanks

 

thanks for posting.  Calabria has a personal interest in settling Collins after election day and before 12/9 if Biden is elected, or it appears that he has ben elected.  This could take the form of simply an economic deal, via a 4th A, or also a release from conservatorship into a consent decree.  With Collins settled, Calabria "could" ignore any attempt by the Biden administration to remove him, and resist in the courts until an appellate court rules against him (and scotus denies cert). this could take over one year, during which Calabria could continue as director.

 

edit:

just read article quickly.  there is a real disconnect insofar as Layton doesn't seem to understand that it is possible (and in my view if Biden is elected, likely) that Collins will be settled in connection with the elimination of the SPS.  it is astounding that he doesn't seem to understand the relationship between the two.

[orthopa]

https://www.jchs.harvard.edu/sites/default/files/research/files/harvard_jchs_path_gse_reform_layton_2020_0.pdf

 

Interesting read. The possible Biden admin plans make my blood boil and if Trump isnt re-elected I forsee Mnuchin and Calabria doing all they can before inauguration to leave a long lasting mark on the GSEs and not even given a new Biden Treasurer a chance to do much.

 

Multiple times he refers to Calabria's job being at risk with the SCOTUS case. cherzeca this is a question for you. Sometime back I asked or implied that Calabria's job would be on the line with the SCOTUS decision if it ever came down with one next spring or summer. I cited this as additional motivation to settle before oral arguments. You had said if I remember correctly that Calabria essentially had no skin in the game with the case.

 

So is Calabrias removal for cause provision up for decision with the SCOTUS or not? If so I see another reason to settle before oral arguements this time for Calabria to allow him as much time as possible to carry out releasing the GSEs from conservatorship.

 

Thanks

 

thanks for posting.  Calabria has a personal interest in settling Collins after election day and before 12/9 if Biden is elected, or it appears that he has ben elected.  This could take the form of simply an economic deal, via a 4th A, or also a release from conservatorship into a consent decree.  With Collins settled, Calabria "could" ignore any attempt by the Biden administration to remove him, and resist in the courts until an appellate court rules against him (and scotus denies cert). this could take over one year, during which Calabria could continue as director.

 

edit:

just read article quickly.  there is a real disconnect insofar as Layton doesn't seem to understand that it is possible (and in my view if Biden is elected, likely) that Collins will be settled in connection with the elimination of the SPS.  it is astounding that he doesn't seem to understand the relationship between the two.

 

Great explanation thanks. Yeah he does not mention settlement once and has always suggested the recap would take "forever".

 

 

[typicalvalue]

Interesting Boyle Capital Q3 update: https://www.boylecapital.com/news-and-insights/2020-q3-commentary . As some of you may now they are big on Jr prds, and have increased their exposition this Q. Nothing new on the table, but love the way they connect the dots on this saga. Expecting a PSPA amendment/consent decree late november/early december (between elections and SCOTUS hearing).

 

 

[orthopa]

Interesting Boyle Capital Q3 update: https://www.boylecapital.com/news-and-insights/2020-q3-commentary . As some of you may now they are big on Jr prds, and have increased their exposition this Q. Nothing new on the table, but love the way they connect the dots on this saga. Expecting a PSPA amendment/consent decree late november/early december (between elections and SCOTUS hearing).

 

Was just going to post this. It lays out the thought process of what should happen and why between now and Dec 9th.