Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 1847672 times)

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8840 on: December 06, 2017, 01:22:25 PM »
Hen is a loser. The FNMA market is down by a penny, I would have expected more from Chairman of House Financial Services Committee. A penny here and there , or even two, or even 3 is normal. That means no one cared what he says.

it's likely one of the reasons we're at these low levels, his views that we found out today have likely been distributed to industry players in recent weeks


investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8841 on: December 06, 2017, 01:25:08 PM »
Forgive me for postulating how various groups are going to think or act, but my take on Congress is that they are basically followers rather than leaders and will therefore wait to see what Treasury (Mnuchin) will propose. Vis a vis Mnuchin, I assume first that he stands for government deregulation (i.e., removing FnF from conservatorship). The fly in the ointment is that the flow of much free money coming from the NWS must be really hard to give up. However, overriding this is that, as a Trump minion, he will wish to stick it to the Democrats and symbolically to Obama. In that case, he would choose to restore FnF to their previous status and meanwhile take the money to be gained by exercising the warrants. Can you imagine Elizabeth Warren if such a restoration were to happen? As I indicated before, I believe that the various investor lawsuits are like higher probability (although still quite unlikely) lottery tickets and will most likely be unsuccessful.

Keep in mind the warrants that the gov't owns.  They would give up a few billion per quarter by stopping the NWS but would gain a massive amount of cash ($100B+?) almost immediately by the common stock rising and the warrants being sold/exercised/etc.  With a maximum 7-year window for this Administration, perhaps 3-year window, I'd rather have a massive payment up front to use at my disposal.

while it's surprising to me, no congressperson has mentioned the warrants to my knowledge.  Thus, I don't think the warrants are driving the process; I doubt Mnuchin would get up and say we need to structure reform in X way to make sure we monetize the warrants.   Rather, they seem like a secondary added benefit of any plan that preserves FnF.

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8842 on: December 06, 2017, 01:25:58 PM »
Hen is a loser. The FNMA market is down by a penny, I would have expected more from Chairman of House Financial Services Committee. A penny here and there , or even two, or even 3 is normal. That means no one cared what he says.
Probably because of what he said, not what he wrote:

Quote
House Financial Services Committee Jeb Hensarling shifted tactics on housing finance reform Wednesday, acknowledging that a bill he’s pushed for years to virtually eliminate the government’s role in the mortgage market lacks the support to become law.

The Texas Republican also conceded that while he opposes any kind of government guarantee of the mortgage market, it would be impossible to pass a reform effort without one.

“While I personally have not changed … my mind that the best path forward remains the PATH Act [Hensarling’s bill], after carefully surveying today’s political landscape, I do not see the PATH Act’s passage likely,” Hensarling said.

He also acknowledged that any bipartisan deal would include some support for affordable housing, another area where Hensarling has been previously vigorously opposed.

“I also believe the idea (government guarantee) is not going away anytime soon and I fully expect it to be part of any successful reform effort in this Congress.”

Briefly, wind down, charter elimination and all-or-nothing approach are out. Gov guarantee, affordable housing goals, multiple layers of private capital -diversified- stacked up before gov guarantee and DeMarco/Bright are in.

Also, Heitkamp said “new ideas are percolating up,” including “basically maintaining” Fannie and Freddie. That is one area that Hensarling does not appear ready to compromise. He emphasized Wednesday that any bill should eliminate Fannie and Freddie.
« Last Edit: December 06, 2017, 01:33:42 PM by rros »

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8843 on: December 06, 2017, 01:45:49 PM »
Hen is a loser. The FNMA market is down by a penny, I would have expected more from Chairman of House Financial Services Committee. A penny here and there , or even two, or even 3 is normal. That means no one cared what he says.

it's likely one of the reasons we're at these low levels, his views that we found out today have likely been distributed to industry players in recent weeks

The bolded part isn't right. We have known that Hensarling wants to kill the GSEs and get the government completely out of housing finance for a long time. I think this is why the market had little to no reaction: it isn't news.

https://hensarling.house.gov/media-center/press-releases/hensarling-re-introduces-legislation-to-end-taxpayer-funded-bailout-of

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8844 on: December 06, 2017, 02:02:29 PM »
Hen is a loser. The FNMA market is down by a penny, I would have expected more from Chairman of House Financial Services Committee. A penny here and there , or even two, or even 3 is normal. That means no one cared what he says.

it's likely one of the reasons we're at these low levels, his views that we found out today have likely been distributed to industry players in recent weeks

The bolded part isn't right. We have known that Hensarling wants to kill the GSEs and get the government completely out of housing finance for a long time. I think this is why the market had little to no reaction: it isn't news.

https://hensarling.house.gov/media-center/press-releases/hensarling-re-introduces-legislation-to-end-taxpayer-funded-bailout-of

I don't see it the same way, after reading the text of his speech.  he admitted the Path act and no govt guarantee are not viable even though he still supports them.  this is new.   but he reiterated a wind-down of FnF which means even though he's adapted his views, this core element remains unchanged.   as discussed prior, mnuchin is the wild card.  but with such a line-in-the-sand wording, it tells me it's unlikely that gse-investor-friendly legislation passes congress in 2018.  so we're left with 3 options:  wait for 2019 (with maybe democrats in charge), something legislatively in 2018 that isn't great for us, or something purely administrative.     

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8845 on: December 06, 2017, 04:32:30 PM »
https://twitter.com/Woellert/status/938561739423145984

It's happening: Senate #GSE reform proposal preserves Fannie and Freddie (in smaller form) and builds on existing system. #housing Only on @POLITICOPro -->https://www.politicopro.com/financial-services/article/2017/12/fannie-and-freddie-would-live-on-under-senate-proposal-211101

https://twitter.com/Woellert/status/938567195898073088
Lorraine‏Verified account @Woellert
31s32 seconds ago

You heard it here first-->Some Fannie & Freddie shareholders wiped out when the government took control of the companies eventually could see their stock values return under new Corker-Warner plan. $FNMA $FMCC #mortgage http://politico.pro/2B6NSs5
« Last Edit: December 06, 2017, 04:35:42 PM by Luke 5:32 »
You are willing to give your life, if necessary, to protect a stranger... me, my bride, each one of our children. For that I thank you every single day, veterans. And I consider you a friend. "Greater love has no one than this, that someone lay down his life for his friends." John 15:13

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8846 on: December 06, 2017, 04:49:16 PM »
Does anyone have access to the politico link?

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8847 on: December 06, 2017, 04:50:17 PM »
https://twitter.com/Woellert/status/938561739423145984

It's happening: Senate #GSE reform proposal preserves Fannie and Freddie (in smaller form) and builds on existing system. #housing Only on @POLITICOPro -->https://www.politicopro.com/financial-services/article/2017/12/fannie-and-freddie-would-live-on-under-senate-proposal-211101

https://twitter.com/Woellert/status/938567195898073088
Lorraine‏Verified account @Woellert
31s32 seconds ago

You heard it here first-->Some Fannie & Freddie shareholders wiped out when the government took control of the companies eventually could see their stock values return under new Corker-Warner plan. $FNMA $FMCC #mortgage http://politico.pro/2B6NSs5

so who has politico pro sub and can copy and paste?
« Last Edit: December 06, 2017, 04:56:37 PM by cherzeca »

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8848 on: December 06, 2017, 04:52:50 PM »
i'm guessing that "some" GSE shareholders getting value means those who are preNWS shareholders.  if so this wont fly. 

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8849 on: December 06, 2017, 04:56:39 PM »
i'm guessing that "some" GSE shareholders getting value means those who are preNWS shareholders.  if so this wont fly.
Perhaps this means dilution to common will impede great appreciation while preferreds might see face? But Chris, aren't you pre-2012?