Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2637131 times)

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10350 on: August 08, 2018, 12:36:15 PM »
An encouraging pricing sign: while pref share prices aren't moving a whole lot, there are relatively large orders (1000 shares and up) on the bid of nearly every series I follow. Perhaps someone is trying to get into the prefs at a good price, but isn't particular about which series.


Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10351 on: August 08, 2018, 01:46:52 PM »
Moelis met with FHFA two weeks ago

-Go here: https://www.fhfa.gov/SupervisionRegulation/RegulationFederalRegister/Pages/Commentonrule.aspx

-Search "Moelis"

Results:
Meeting on 7/26
Moelis uploads report 8/1

Two super interesting quotes (to me at least),
"Moelis is an independent investment bank, and is currently engaged as a financial advisor to certain non-litigating preferred shareholders in the GSEs" (page 6)

Seems to me to be more confirmation that non-litigating and litigating shareholders are in the same boat.

"This also follows the same general approach laid out in the Moelis Blueprint and is
consistent with GSE reform proposals put forward by other major market participants (e.g., the Mortgage Bankers Association)" (page 7)

If MBA doesn't come out against this plan in the coming day or two (really tonight as when they do voice their opinion it's usually immediate), then they really must have compromised on what they were seeking. I'm not surprised.  As you can see in my recent posts, the David Stevens mouthpiece (Paul Muolo of IMF) has been publishing very favorable quotes and stories the past few weeks.  This has been much more frequent than at any point in the past few years.

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10352 on: August 08, 2018, 03:53:51 PM »
Moelis met with FHFA two weeks ago

-Go here: https://www.fhfa.gov/SupervisionRegulation/RegulationFederalRegister/Pages/Commentonrule.aspx

-Search "Moelis"

Results:
Meeting on 7/26
Moelis uploads report 8/1

Two super interesting quotes (to me at least),
"Moelis is an independent investment bank, and is currently engaged as a financial advisor to certain non-litigating preferred shareholders in the GSEs" (page 6)

Seems to me to be more confirmation that non-litigating and litigating shareholders are in the same boat.

"This also follows the same general approach laid out in the Moelis Blueprint and is
consistent with GSE reform proposals put forward by other major market participants (e.g., the Mortgage Bankers Association)" (page 7)

If MBA doesn't come out against this plan in the coming day or two (really tonight as when they do voice their opinion it's usually immediate), then they really must have compromised on what they were seeking. I'm not surprised.  As you can see in my recent posts, the David Stevens mouthpiece (Paul Muolo of IMF) has been publishing very favorable quotes and stories the past few weeks.  This has been much more frequent than at any point in the past few years.
The non-litigating shareholder is, most likely, John Paulson. While we are all on the same boat, we may be in different cabins. Paulson might help the Jrs. achieve face value and dividend reinstatement, whereas litigating shareholders may help with a meaningful compensation for the alleged nationalization. Provided we prevail in court.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10353 on: August 09, 2018, 08:00:40 AM »
If MBA doesn't come out against this plan in the coming day or two (really tonight as when they do voice their opinion it's usually immediate), then they really must have compromised on what they were seeking. I'm not surprised.  As you can see in my recent posts, the David Stevens mouthpiece (Paul Muolo of IMF) has been publishing very favorable quotes and stories the past few weeks.  This has been much more frequent than at any point in the past few years.

The date on the Moelis comment is August 1. If MBA was going to speak out against it, we would have heard it by now.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10354 on: August 09, 2018, 08:23:33 AM »
If MBA doesn't come out against this plan in the coming day or two (really tonight as when they do voice their opinion it's usually immediate), then they really must have compromised on what they were seeking. I'm not surprised.  As you can see in my recent posts, the David Stevens mouthpiece (Paul Muolo of IMF) has been publishing very favorable quotes and stories the past few weeks.  This has been much more frequent than at any point in the past few years.

The date on the Moelis comment is August 1. If MBA was going to speak out against it, we would have heard it by now.

That further drives the point home that MBA isn't balking at the Moelis plan.  Thank you.

TwoCitiesCapital

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10355 on: August 09, 2018, 10:04:45 AM »
If MBA doesn't come out against this plan in the coming day or two (really tonight as when they do voice their opinion it's usually immediate), then they really must have compromised on what they were seeking. I'm not surprised.  As you can see in my recent posts, the David Stevens mouthpiece (Paul Muolo of IMF) has been publishing very favorable quotes and stories the past few weeks.  This has been much more frequent than at any point in the past few years.

The date on the Moelis comment is August 1. If MBA was going to speak out against it, we would have heard it by now.

That further drives the point home that MBA isn't balking at the Moelis plan.  Thank you.

I'm not saying the two scenarios similar enough to bet on the outcome, but when the two sides stopped being at each other's throats publicly was the tell that a few days later a settlement had been reached in the MBIA case and the equity spiked.


SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10356 on: August 09, 2018, 10:16:58 AM »
Sorry just jumping into the FHFA meeting news quickly on my phone (on vacation).  Did the source of the meeting (FHFA website?) disclose similar meetings with other commenters? Or was moelis the only group FHFA met w publicly?

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10357 on: August 09, 2018, 10:44:39 AM »
Sorry just jumping into the FHFA meeting news quickly on my phone (on vacation).  Did the source of the meeting (FHFA website?) disclose similar meetings with other commenters? Or was moelis the only group FHFA met w publicly?

https://www.fhfa.gov/SupervisionRegulation/RegulationFederalRegister/Pages/Commentonrule.aspx

Searched "meeting" and "meet" under Organization.

The two results are Moelis (7/26/18) and Andrew Davidson & Co. (6/21/18)

Davidson last year: http://knowledge.wharton.upenn.edu/article/why-competition-wont-lead-to-better-outcomes-for-fannie-mae-and-freddie-mac/

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10358 on: August 09, 2018, 11:00:59 AM »
Sorry just jumping into the FHFA meeting news quickly on my phone (on vacation).  Did the source of the meeting (FHFA website?) disclose similar meetings with other commenters? Or was moelis the only group FHFA met w publicly?

https://www.fhfa.gov/SupervisionRegulation/RegulationFederalRegister/Pages/Commentonrule.aspx

Searched "meeting" and "meet" under Organization.

The two results are Moelis (7/26/18) and Andrew Davidson & Co. (6/21/18)

Davidson last year: http://knowledge.wharton.upenn.edu/article/why-competition-wont-lead-to-better-outcomes-for-fannie-mae-and-freddie-mac/

Thank you!

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10359 on: August 09, 2018, 11:39:42 AM »
midas, you are onto the core issue in collins, which is that in the 5th circuit, the Mcallister case interpreted "may" as "only may".  McAllister for the 5th circuit is even stronger than CedarMinn for the 8th circuit.

I don't know why Cooper & Kirk aren't making a big stink about this in their motion for rehearing.  they mention Mcallister, but only in passing.

I just had a daydream about how this could have gone down in oral arguments, complete with expansive hand and arm gestures, incredulous voicing at the proper spots, the whole works.



Thompson: The defendants have argued, successfully in other courts, that the word "may" in section 1367(b)(2)(D) is merely permissive in nature and not exclusionary. But this very court found the opposite to be true in McAllister vs RTC. In that case, this court said that a conservator, quote, 'only', let me repeat only, 'has the power to take actions necessary to restore a financially troubled institution to solvency.  Expenses of liquidation cannot be incurred by a conservator as a matter of law, as', and I emphasize here, 'liquidation is not a function of the conservator.'

Allow me to read the relevant section in HERA. 'The Agency may, as conservator, take such action as may be--
    (i) necessary to put the regulated entity in a sound and solvent condition; and'
(I emphasize and)
   ' (ii) appropriate to carry on the business of the regulated entity and preserve and conserve the assets and property of the regulated entity.'

Given these things, that FHFA's powers as conservator only, as stated by this court, allow it to take actions to restore the companies to solvency, and that HERA requires FHFA to take both parts of section 1367(b)(2)(D) into account, how can the Net Worth Sweep be anything other than ultra vires? The Net Worth Sweep does the opposite of (i) because it endangers, rather than promotes, the financial soundness of the companies, and it also does the opposite of (ii) because it, rather than preserving and conserving the assets of the companies, instead gives them away to Treasury in perpetuity.

As a clearly ultra vires act, the Net Worth Sweep is thus reviewable by this court and the bar of judicial review found in section 4617(f) does not apply. Thank you, your honors.



Alas, the opportunity has likely passed by.

The 5th Circuit McAllister vs RTC opinion references RTC vs United Trust Corp. in the 11th Circuit. That opinion, found here: https://caselaw.findlaw.com/us-11th-circuit/1225205.html, says:

Quote
The CedarMinn court also recognized that the distinct missions of conservators and receivers necessitated that each retain an independent right to repudiate contracts.   The conservator's mission is to conserve assets which often involves continuing an ongoing business.   The receiver's mission is to shut a business down and sell off its assets.

They used the 8th Circuit's CedarMinn case as part of an opinion. Does that bind the 11th Circuit? Has a NWS case been brought before the 11th Circuit yet?