Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3314001 times)

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12420 on: May 16, 2019, 10:50:05 AM »
My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting.


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12421 on: May 16, 2019, 11:07:57 AM »
My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting.

phillips predecessor as counselor to treasury secretary (for Obama) was Antonio Weiss former head of M&A at Lazard.  Weiss did not have a good exit.  had to start his own boutique and is not ringing the bell frankly. Phillips knows this, believe me, and has been having his eye on a good exit.  and what better time to get back on street than when the street is about to get a multi-billion mandate.  this is all good news.  if more work needed to be done on the treasury plan, my guess is that he wouldn't have been able to pull the ripcord
« Last Edit: May 16, 2019, 11:19:51 AM by cherzeca »

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12422 on: May 16, 2019, 11:12:00 AM »
My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting.

Exactly. His job is done. Everyone signed off remember?

cherzeca, I bet you like this part of the article.

"Mr. Phillips and other Treasury officials have been meeting with the biggest American banks to determine how best to raise capital for Fannie and Freddie — a prerequisite to releasing them from government control — as well as how the housing finance system might be restructured, according to two people who participated in the meetings."

There is the news they are lining up the bankers. Another check on the list. Mnuchins goal of within 6 months or by the end of the year seems intact.

Question for me would be do any of the big preferred holders have influence on "Americas biggest banks"?

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12423 on: May 16, 2019, 11:57:08 AM »
In less-liquid news, two 9,000 share blocks of FMCCT changed hands at $20.32 and $20.33, and two 12,200 share blocks of FNMAL changed hands at $20.25 and $20.26 today. Those caught my eye because they are relatively large blocks, but mainly because they mark the first over-$20 trades I have seen on the $50-par series, though FMCCT has had other small blocks trade at $20 and $20.50 today.

FMCCT has a somewhat high fixed dividend compared to other series (6.42%), but FNMAL has a low fixed dividend (4.75%). The correlation that I track is still around 0.8 in aggregate, but things are starting to stratify rather than fall along a regression line. The Fannie 50s are all trading near each other despite their different dividend rates, as are the Fannie 25s (I swapped some FNMAJ for FNMAT at near parity just now!). In the Freddie 25s, FMCKL (6.02%) and FMCKI (6.55%) are outperforming, but FMCKO (5.9%) is lagging well behind. The Freddie 50s have a similar pattern, where FMCCT is the clear leader, but FMCCP (6%) for some reason stays much closer to FMCCT than the others (dividends from 5.7-5.81%).

I am somewhat loath to part with my now-sizeable FNMAT stake, but it seems that the market is starting to prioritize par value. This makes sense because FNMAT has no call protection, and if any series are to be called it will be first.

Note: I only follow the fixed-dividend series because those are the only ones I can buy. Analysis that includes the variable-dividend series will have to be done by someone else.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12424 on: May 16, 2019, 12:30:20 PM »
Somewhat off-topic, but I found it funny: someone searched all of Gasparino's tweets for the word "basement", and as far as I can tell it is preceded by "mom's" (with or without the apostrophe) every single time. He does this several times a month on average.

https://twitter.com/search?f=tweets&vertical=default&q=from%3Acgasparino+basement

While I am not a fan of the #Fanniegate movement on Twitter (I think it makes shareholders look stupid, greedy, or both), I don't mind them trolling Gasparino because, well, he deserves it.

Wiggins

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12425 on: May 16, 2019, 01:09:23 PM »
My understanding is his job was to help come up with details for the plan while Mnuchin was working on other things. The plan is being delivered to the White House next month... and he is stepping down next month... as his job is completed and he has nothing left to do at that point. Additionally, the guy is rumored going back to work on wallstreet... ahead of the IPO. Interesting.

Exactly. His job is done. Everyone signed off remember?

cherzeca, I bet you like this part of the article.

"Mr. Phillips and other Treasury officials have been meeting with the biggest American banks to determine how best to raise capital for Fannie and Freddie — a prerequisite to releasing them from government control — as well as how the housing finance system might be restructured, according to two people who participated in the meetings."

There is the news they are lining up the bankers. Another check on the list. Mnuchins goal of within 6 months or by the end of the year seems intact.

Question for me would be do any of the big preferred holders have influence on "Americas biggest banks"?

Can't help but think of John Paulson and Goldman Sachs being thick as thieves - literally - on the infamous ABACUS deal and subsequent lawsuits. This is where JP netted nearly a billion dollars in a single transaction.
« Last Edit: May 16, 2019, 02:08:37 PM by Wiggins »

Ahab

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12426 on: May 16, 2019, 01:43:39 PM »
@Midas
I also often find that Fanniegate comes across as annoyingly naive. Yes, I feel common holders got shafted. No, the common share prices aren't going to be worth $100 next year, barring God himself demanding it from the U.S. Treasury.
Gasparino is amusing, I consider him to be a national treasure. No other financial reporter is so consistently wrong on the hot stocks of our era. Whether it is Fannie Mae or Tesla, Gasparino can be counted on to provide bad internet banter.
Long: FNMAT, FNMAN, FMCKO, BAC, JPM, GOOG
Short: PCG, TSLA
Twitter: AhabValue

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12427 on: May 16, 2019, 09:18:45 PM »
from Glen:
Judge Lamberth entered an order today denying FHFA, Fannie and Freddie’s request that he reconsider his not decision that preserved shareholders’ contractual claims.  Judge Lamberth declined FHFA and the GSEs’ invitation.  Accordingly, shareholders’ implied covenant breach claims will not be dismissed and will proceed to trial.  A copy of Judge Lamber’s decision is attached to this e-mail message.
I am muslceman. I have more muscle than brain!

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12428 on: May 17, 2019, 06:02:59 AM »
Politico confirmed Phillips "recently wrapped up more than 60 meetings with stakeholders" and "will stay until the completion of the Treasury Housing Reform Plan." Seems like his role has come to an end.

james22

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12429 on: May 17, 2019, 07:28:03 AM »
I'm curious what others think about Fannie Mae common at these levels. My very speculative opinion is that they currently are a better value than the preferreds (currently only in preferreds myself). The common share price reflects a wider dispersion of outcomes. To me, a bet on common is a bet on moderate dilution instead of maximum dilution. Yet, assessing probabilities about the recap's mechanics is what trips me up..

recap mechanics should trip you up since no one knows what the hell is coming.  this board is a bunch of wild and crazy guys who are into the least speculative bet you can make in this name. which is junior prefs, but still plenty speculative.  but then, ahab, you are a hunter for the big whale....

The more I think of the common the more I like them. I'm heavy in them but hedged with prefs. I've been looking for decent investments for years and they seldom come along so when they do I have to go big. I'm looking for a home run so commons have to be involved for me. Some see this as a risky investment but the way I've always seen it is that these are two of the best businesses in the world in an unsustainable position not of their making. Eventually it'll work out.
Or I'll go back to work...

How big is "big," DR?

And how do you see the (commons) outcome? X% chance of X% loss, X% chance of no change, X% chance of X% gain?

Anyone?
25% BRK l 25% BAM l 8% SV (VSIAX) l 8% EM (VEMAX) l 4% FNMA/FMCC l 4% FNMAS/FMCKJ l 25% Stable Value