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

[thepupil]

LOL and this is why I really just dont GAF here and just let it be. God bless all you guys who do the work. But for the life of my investment in these, its basically been this....rumor this way, rumor that way, huge run, huge retrace, vice versa. Chicken with the head cut off. I'll care when its either worthless, or within a few ticks of par. Otherwise, not worth the brain damage.

 

one of my favorite investment managers said to me once, "the return per unit of risk ended up being okay, the return per unit of stress however, made this a very bad investment".

 

no position in Fannie/Freddie (though i guess indirectly via PSH, but I don't even know if Ackman has a material position).

 

Good luck to you all.

 

[orthopa]

I would think the "Wall Street bankers" are FnF's FA's, and the "framework" is in effect the capital restoration plans.  so Mnuchin is all set to go and do that which Mnuchin has said for 4 years he has wanted to do.  the guy has balls made out of sponge

 

He is good at playing the game though but weak sauce for sure.

 

The "framework" (do they mean PSPA?) must call for one of the litany of options to recap the GSEs in the Treasury plan. The "blueprint" assuredly deals with the Sr Preferred and warrants in a way that Wall Street benefits of course. Treasury undoubtedly is exercising the warrants so outside of eliminating the Sr Preferred there is some potential to conversion of a different security there on Treasurys behalf.

[Guest cherzeca]

"one of my favorite investment managers said to me once, "the return per unit of risk ended up being okay, the return per unit of stress however, made this a very bad investment".

 

this is why everyone in the name should be playing with sizing/money they can afford to lose.

 

[orthopa]

LOL and this is why I really just dont GAF here and just let it be. God bless all you guys who do the work. But for the life of my investment in these, its basically been this....rumor this way, rumor that way, huge run, huge retrace, vice versa. Chicken with the head cut off. I'll care when its either worthless, or within a few ticks of par. Otherwise, not worth the brain damage.

 

As with any investment depends on the risk and time spent. Undoubtedly for some this is a rounding error position and for others a huge position. Size of capital is relative to everyone but once you get into the 7 and 8 figure amounts with an investment that can provide 300-400% returns IMO it becomes worth the time spent. If not a huge position I would likely have the same view as you. Not worth the bullshit unless your in with size.

[DocSnowball]

LOL and this is why I really just dont GAF here and just let it be. God bless all you guys who do the work. But for the life of my investment in these, its basically been this....rumor this way, rumor that way, huge run, huge retrace, vice versa. Chicken with the head cut off. I'll care when its either worthless, or within a few ticks of par. Otherwise, not worth the brain damage.

LOL...yes have suffered a lot of it  ;D

[orthopa]

Following some of those on twitter the thought is Treasury wants the Wall Street Bankers to look and advise on the PSPAs, consent order milestones regarding capital, and strategy to exit govt control (capital release plans).

 

If that tea leaf reading is correct that means that CRP from JPM and MS have been submitted, approved and sitting on mnuchins desk as reported. This must be what he is "contemplating" per the congressional hearing and why the Fannie email said stand by.

 

If all correct the big bang goes through, PSPA, capital release plan, and consent order all at once. If that comes to fruition I would expect a preferred to common conversion to be part of that capital release plan. If its going to come it has to come unannounced.

 

Question is will it be enough for Plantiffs to drop their suit if that is still pertinent.

[Guest cherzeca]

Following some of those on twitter the thought is Treasury wants the Wall Street Bankers to look and advise on the PSPAs, consent order milestones regarding capital, and strategy to exit govt control (capital release plans).

 

If that tea leaf reading is correct that means that CRP from JPM and MS have been submitted, approved and sitting on mnuchins desk as reported. This must be what he is "contemplating" per the congressional hearing and why the Fannie email said stand by.

 

If all correct the big bang goes through, PSPA, capital release plan, and consent order all at once. If that comes to fruition I would expect a preferred to common conversion to be part of that capital release plan. If its going to come it has to come unannounced.

 

Question is will it be enough for Plantiffs to drop their suit if that is still pertinent.

 

no Wall Street bank is going to give treasury free advice, and treasury is not hiring a FA at this point.  these Wall Street banks visiting Mnuchin were MS and JPM. it makes sense for Mnuchin to have a come to Jesus chat with them to see how sure is sure.

[Luke 532]

no Wall Street bank is going to give treasury free advice, and treasury is not hiring a FA at this point.  these Wall Street banks visiting Mnuchin were MS and JPM. it makes sense for Mnuchin to have a come to Jesus chat with them to see how sure is sure.

 

"I am the way to a PSPA, the truth is NWS ends, and the life of Fannie/Freddie is rejuvenated with a capital raise."  -Mnuchin 5:32

[Guest cherzeca]

no Wall Street bank is going to give treasury free advice, and treasury is not hiring a FA at this point.  these Wall Street banks visiting Mnuchin were MS and JPM. it makes sense for Mnuchin to have a come to Jesus chat with them to see how sure is sure.

 

"I am the way to a PSPA, the truth is NWS ends, and the life of Fannie/Freddie is rejuvenated with a capital raise."  -Mnuchin 5:32

 

amen

[undervalued]

You'll need faith in Mnuchin for you to be in this trade. Similar to the TSLA trade lol

[SnarkyPuppy]

Invert. 

 

What causes the JR pref stock to realistically go to $0?

What is a more reasonable permanent downside base case over 5-10 years?

What is the upside over 5-10 years?

 

While the next month is one of the most significant for this investment and so it makes sense to focus on - it's also helpful to take a step back and assess what is implied by current prices. 

[Williams406]

Nice thread by CMLA:

 

Nothing that hasn't been said by many here many times, but it succinctly states my thought process in the dark hours of this trade that kept me in.

[typicalvalue]

Invert. 

 

What causes the JR pref stock to realistically go to $0?

What is a more reasonable permanent downside base case over 5-10 years?

What is the upside over 5-10 years?

 

While the next month is one of the most significant for this investment and so it makes sense to focus on - it's also helpful to take a step back and assess what is implied by current prices.

 

That's a good exercise to do. For me the question that's given me more headaches is what is baked in today's prices. Pfds clearly trade at distressed levels, cannot understand given PSPA trumpets are more loud than ever. Market cannot be that retarded.

 

What do you think Mr. Market is telling us?

[Luke 532]

Market cannot be that retarded.

 

What do you think Mr. Market is telling us?

 

Remember that we're dealing with a business partner that has a mood disorder, most likely bipolar disorder.

 

"Mr. Market who is your partner in a private business... the poor fellow has incurable emotional problems... At other times he is depressed and can see nothing but trouble ahead for both the business and the world." -The Intelligent Investor

[TwoCitiesCapital]

Market cannot be that retarded.

 

What do you think Mr. Market is telling us?

 

Remember that we're dealing with a business partner that has a mood disorder, most likely bipolar disorder.

 

"Mr. Market who is your partner in a private business... the poor fellow has incurable emotional problems... At other times he is depressed and can see nothing but trouble ahead for both the business and the world." -The Intelligent Investor

 

That emotional mania paired with the fact that this has been a massive disappointment for most people in it for the past 7-8 years means it's a very tall hill of despondency to climb even when the news is getting to be positive again.

[undervalued]

If you have looked at the past 5 year chart for FNMAS, you'll see that every time it spikes up, investors were thinking it's just around the corner and every time they're proven wrong. So people who are staying and keeping the shares are probably the insane one expecting a different results. Similar to what happen few years ago with TSLA when news broke out that TSLA might go bankrupt, you'll need similar faith to Elon that he is going to take care of things. You need similar faith here in Mnuchin where he'll do the right move.

 

This thread is public so whichever bot is monitoring this conversation has already taken account information posted here.

 

Of course when the facts change, you need to change your mind. So far no news channels have quoted Mnuchin/Calabira are going to do other than what they have stated.

[Luke 532]

That emotional mania paired with the fact that this has been a massive disappointment for most people in it for the past 7-8 years means it's a very tall hill of despondency to climb even when the news is getting to be positive again.

 

Nailed it!

[Spekulatius]

That emotional mania paired with the fact that this has been a massive disappointment for most people in it for the past 7-8 years means it's a very tall hill of despondency to climb even when the news is getting to be positive again.

 

Nailed it!

 

I agree as well (probably a first in this board). It is quite possible they you can buy the preferred with a good risk reward after a deal is announced. That’s sort of why I am watching this somewhat.

 

Right now, it’s just a crapshoot and time is running out. If nothing happens in the next 3 weeks, then it will likely take another 4 years to waiting. And why would it happen in the last 3 weeks when they couldn’t get anything done in the last 4 years?

[undervalued]

That emotional mania paired with the fact that this has been a massive disappointment for most people in it for the past 7-8 years means it's a very tall hill of despondency to climb even when the news is getting to be positive again.

 

Nailed it!

 

I agree as well (probably a first in this board). It is quite possible they you can buy the preferred with a good risk reward after a deal is announced. That’s sort of why I am watching this somewhat.

 

Right now, it’s just a crapshoot and time is running out. If nothing happens in the next 3 weeks, then it will likely take another 4 years to waiting. And why would it happen in the last 3 weeks when they couldn’t get anything done in the last 4 years?

 

I was looking back at the ACG timeline last night and wonder how it will get affected by Biden win. I think the timeline is expecting Mnuchin to ends the PSPA between now until mid Jan. I almost consider Mnuchin not doing anything between this time at 0% because it's such a low hanging fruit to basically make history for himself.

[Spekulatius]

 

I was looking back at the ACG timeline last night and wonder how it will get affected by Biden win. I think the timeline is expecting Mnuchin to ends the PSPA between now until mid Jan. I almost consider Mnuchin not doing anything between this time at 0% because it's such a low hanging fruit to basically make history for himself.

 

A lot of timelines have been thrown around - the last date for conclusion discussed here was 12/9.

I don’t know how you can get 100% confidence that something will happen between now and mid January.

My own assessment of the probability would be less than 50% for sure.

 

I also think that all those leaks ( sitting on his desk waiting to be signed ) are probably worthless.

[typicalvalue]

 

I was looking back at the ACG timeline last night and wonder how it will get affected by Biden win. I think the timeline is expecting Mnuchin to ends the PSPA between now until mid Jan. I almost consider Mnuchin not doing anything between this time at 0% because it's such a low hanging fruit to basically make history for himself.

 

A lot of timelines have been thrown around - the last date for conclusion discussed here was 12/9.

I don’t know how you can get 100% confidence that something will happen between now and mid January.

My own assessment of the probability would be less than 50% for sure.

 

I also think that all those leaks ( sitting on his desk waiting to be signed ) are probably worthless.

 

At this point anyone has its arguments belive on one side or another (no one is right or wrong until 20th of january). Taking account GSEs reform history one should think this wont be done, but I think this will get done given all past months nuggets.

 

 

[undervalued]

 

I was looking back at the ACG timeline last night and wonder how it will get affected by Biden win. I think the timeline is expecting Mnuchin to ends the PSPA between now until mid Jan. I almost consider Mnuchin not doing anything between this time at 0% because it's such a low hanging fruit to basically make history for himself.

 

A lot of timelines have been thrown around - the last date for conclusion discussed here was 12/9.

I don’t know how you can get 100% confidence that something will happen between now and mid January.

My own assessment of the probability would be less than 50% for sure.

 

I also think that all those leaks ( sitting on his desk waiting to be signed ) are probably worthless.

 

At this point anyone has its arguments belive on one side or another (no one is right or wrong until 20th of january). Taking account GSEs reform history one should think this wont be done, but I think this will get done given all past months nuggets.

 

I had to double check whether I did 100% or 0% that Mnuchin will act  ;D. Interesting that it is interpreted as the same meaning.

[Guest cherzeca]

fnmas is trading today like somebody knows something.  is that you MM?

[Luke 532]

fnmas is trading today like somebody knows something.  is that you MM?

 

Probably just people buying back the shares they were shaken out of by Ackerman's story the other day.

[typicalvalue]

fnmas is trading today like somebody knows something.  is that you MM?

 

Could be pure speculation, or who knows.. Today seems a good spot.