Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 1957447 times)

orthopa

  • Sr. Member
  • ****
  • Posts: 473
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8860 on: December 07, 2017, 07:17:54 AM »
Here is another thing. https://www.nytimes.com/2017/12/03/us/politics/government-shutdown-republicans-congress-spending.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0

My thought being they aren't going to give up on the sweep unless they have to. I see a correction coming in terms of the valuation of the preferreds in the market. However, I'm 100 percent out of the FnF preferreds, so take it as you will.

Ouch, sorry Wayne.


Luke 5:32

  • Hero Member
  • *****
  • Posts: 2088
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8861 on: December 07, 2017, 07:18:20 AM »
Lorraine Woellert states the obvious... or what should be obvious.

https://twitter.com/Woellert/status/938752036656566272
 Lorraine‏Verified account @Woellert
Replying to @billrad

In any scenario involving shares, preferreds will come back first. Commons will be at the end of the line. Thatís my best understanding at the moment.
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

investorG

  • Sr. Member
  • ****
  • Posts: 405
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8862 on: December 07, 2017, 07:19:43 AM »
Looks like screenshots from a bill (pulled from Twitter so can't verify it). See attached...

hmmm. lots to think about here.  especially since we don't know what mnuchin wants.

on one hand, he thinks extending jumpstart for a year is fine since he really does want to work with congress and avoid friction with the Republicans.

on the other hand, he could recoil from this, realizing he loses leverage in negotiations in 2018, and play chicken with Congress if they resist completing the govt funding or tax reform over this. he might also want to settle lawsuits with a 4th amendment, and this could scuttle that plan.

there's not a lot of volume in the lower price preferreds which tells me that the mkt doesn't fully buy this joe light article.

Lets see what the end of the day volume is on the preferred. Put in an order for the less liquid preferred and extremely hard to come by. Who would be selling with this news at these prices?

I try to think at things from multiple angles.

what if the joe light article was simply a way to grease through the jumpstart extension, and ultimately means little?

or what if the corker plan pays back preferreds but only over many years, which reduces the NPV?

I wouldn't be writing this if conveniently the jumpstart renewal didn't appear 12 hours after the Bloomberg article.
« Last Edit: December 07, 2017, 07:22:04 AM by investorG »

Luke 5:32

  • Hero Member
  • *****
  • Posts: 2088
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8863 on: December 07, 2017, 07:24:17 AM »
I try to think at things from multiple angles.

what if the joe light article was simply a way to grease through the jumpstart extension, and ultimately means little?

That's a healthy way to look at things (from different angles).

That certainly could be the case here, but Ackman going out of his way to sing the praises of Corker and Warner is incredibly interesting and makes me lean towards the Light article having some merit.  But I'm biased given my stake in prefs.

Seems to be at least 2 bills floating around: Jumpstart extension and revised Corker/Warner that is shareholder friendly (or so it seems). 

Going to be a wild ride.
« Last Edit: December 07, 2017, 07:27:13 AM 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

cherzeca

  • Hero Member
  • *****
  • Posts: 1220
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8864 on: December 07, 2017, 07:26:28 AM »
why would treasury be cool with a plan that does not redound to common when it owns 80% of common?

no_free_lunch

  • Hero Member
  • *****
  • Posts: 1181
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8865 on: December 07, 2017, 07:29:54 AM »
We can speculate but you now have a bloomberg article stating that the preferred's are likely to be made whole or at least mostly whole.  I view this as progress.

muscleman

  • Hero Member
  • *****
  • Posts: 2722
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8866 on: December 07, 2017, 07:31:12 AM »
What's going on with the preferreds? Up 30% today. Didn't find any news

Luke 5:32

  • Hero Member
  • *****
  • Posts: 2088
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8867 on: December 07, 2017, 07:32:00 AM »
What's going on with the preferreds? Up 30% today. Didn't find any news

LOL, good one!
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

Luke 5:32

  • Hero Member
  • *****
  • Posts: 2088
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8868 on: December 07, 2017, 07:42:48 AM »
https://twitter.com/Moelis/status/938793581778800642
 Moelis & Company‏ @Moelis
9m9 minutes ago

Donít miss Chairman and CEO, Ken Moelis on @BloombergTV with @ErikSchatzker today during the 11am ET hour. Heíll be talking tax reform, M&A, and more.
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

rros

  • Sr. Member
  • ****
  • Posts: 398
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8869 on: December 07, 2017, 07:43:25 AM »
Looks like screenshots from a bill (pulled from Twitter so can't verify it). See attached...

hmmm. lots to think about here.  especially since we don't know what mnuchin wants.

on one hand, he thinks extending jumpstart for a year is fine since he really does want to work with congress and avoid friction with the Republicans.

on the other hand, he could recoil from this, realizing he loses leverage in negotiations in 2018, and play chicken with Congress if they resist completing the govt funding or tax reform over this. he might also want to settle lawsuits with a 4th amendment, and this could scuttle that plan.

there's not a lot of volume in the lower price preferreds which tells me that the mkt doesn't fully buy this joe light article.

Lets see what the end of the day volume is on the preferred. Put in an order for the less liquid preferred and extremely hard to come by. Who would be selling with this news at these prices?

I try to think at things from multiple angles.

what if the joe light article was simply a way to grease through the jumpstart extension, and ultimately means little?

or what if the corker plan pays back preferreds but only over many years, which reduces the NPV?

I wouldn't be writing this if conveniently the jumpstart renewal didn't appear 12 hours after the Bloomberg article.
Did you even read that bill that was posted? It appears as an extension of 1 year BUT it actually tries to stop paying out money for the housing trust funds while assuming dividends will stop as well. What this bill (Corker/Warner) is trying to achieve is prevent Admin to nuke the Srs. because... my view, they want to do that in the housing reform bill and this little bill is a prelude to allow recapitalization and build up of capital. The original jumpstart was two lines. It only referred to tying up Treasury's hands. Had no language on anything else. This is much more than just an extension. It is already meddling with potentially a 4th amendment that will stop dividends.

There are still funds/retail that use any rally to unload. A bit disheartening.

@ Orthopa
that wayne comment wasn't nice. And we still don't know the end to this movie.

My view why Mnuchin is implicitly okeing all this. He said any reform comes after build up of capital. The above bill appears to:

a) give congress 1 more year for reform
b) strongly suggests fixing the coming zero net worth capital as it includes language of "not paying dividends".
« Last Edit: December 07, 2017, 07:54:52 AM by rros »