Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2633409 times)

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8880 on: December 13, 2017, 03:36:34 AM »
http://www.valuewalk.com/2017/12/fannie-mae-foes-gse-reform/

Seems one potential outcome to me is bank-centric reform is passed by congress (facilitated through jumpstart extension) as referenced in the link above.   Bulls will argue that this doesn't:

1. Maximize the value of governments warrants
2. Solve for outstanding litigation

  • Regarding point 1:   Maybe we're missing the true incentive structure here?   Is it possible that maximum economic benefit for the US government is truly the #1 incentive driving trump/mnuchin decision making?   Is it possible that alternative incentives are involved?   
    • Mnuchin worked 17 years for a "TBTF" bank and likely has large incentive to increase business for the banks.   Maybe his relationships w/ Paulson and Berkowitz are only a small segment of his broader network which could benefit from housing finance reform?   
    • If re-election is the #1 incentive at play, it's possible that providing economic benefits to large banks provides reciprocity in the form of fundraising for the 2020 election?
    • If tax reform is the #1 incentive at play (has more legacy value), it's possible that conceding value to shareholders in favor of increasing likelihood of passing tax reform is a rational move.
       
  • Regarding point 2:   lol.

Just trying to provide an alternative perspective here.    I think it's increasingly obvious where Congress is directionally headed.

it's unfortunate that re-jumpstart is happening but it is what it is.

mnuchin however likely still has some power unless they get 2/3 majority to over-ride any veto on housing reform.

and with the congress having a good chance to flip in 2019, if trump/mnuchin are still around, they can tell Pelosi and Maxine waters to hold off on any legislation until early 2019 when they'd get more of what they want.

so hopefully, this is why everyone would come together in 2018 and get a bill done that is balanced and gives each side a little of what they want.  the bank lobby and republicans probably want it to get done this time. 


investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8881 on: December 13, 2017, 06:02:48 AM »
Height Securities updates on GSEs

Height Securities says the outlook for Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) improved significantly over the last week as housing finance reform was taken up by Congress.
"While a copy of the draft is not available at present, there are some additional details emerging. The GSEs will either lose their charters or the charters will be very limited. The entities will be considered guarantors and regulated by the Federal Housing Finance Authority," updates the firm.
"We expect the GSEs will continue to operate in conservatorship until they are recapitalized," adds Height.

interesting. the market is in 'show-me' mode.  FnF investors used up their 9 lives of hope a long time ago.

This is in reference to the Hensarling bill correct? Not the Corker/Warner bill that was reported to be friendly to preferred.

Hensarling said in his release he wanted the charters repealed.

the current charters probably will be repealed -- ie the implicit guarantee model is almost certainly dead.  hopefully the companies continue and thrive in a new form!

Luke 5:32

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emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8883 on: December 13, 2017, 10:54:08 AM »
4560 cleared the committee ( I think along party line, mostly).

https://youtu.be/281202J2aho?t=9284

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8884 on: December 13, 2017, 11:01:30 AM »
Do we know yet whether HR 4560 is stand-alone or will be attached to another bill? I don't know enough about the process here. I didn't think something that would be attached to other legislation would need to pass committee or be voted on separately.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8885 on: December 13, 2017, 02:06:55 PM »
Do we know yet whether HR 4560 is stand-alone or will be attached to another bill? I don't know enough about the process here. I didn't think something that would be attached to other legislation would need to pass committee or be voted on separately.

it looks like it is stand alone.  it has just been reported out of committee. still needs to be passed by house (likely) and senate (if 60 votes needed, as i think it needs, then who knows)

TonyG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8886 on: December 13, 2017, 02:31:54 PM »
at what point does treasury/mnuchin need to speak up on this(provided he's pro fannie freddie as i believe he is)? or are they just waiting for the tax votes to go through first.

DocSnowball

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8887 on: December 13, 2017, 05:15:15 PM »
Scratching my head how this bill is coherent with the RNC resolution! Inverting, we all knew about Hensarling and the historical republican position re: Anti recap and release of the GSEs, so I wonder what sequence of events and people led to the GSE shareholder friendly resolution being passed back in July - just doesn’t add up. I came close to hanging up on this investment after looking at the rider extension in this bill, then reminded myself my thesis was never based on trusting the republican legislators to get this done.

This is, as it has been since February, a thesis based on the motives of the administration with an easy 100B plus and a political win on a platter while giving Obama a black eye, and the GSEs being irreplaceable. Good luck everyone! 

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8888 on: December 13, 2017, 05:30:56 PM »
Do we know yet whether HR 4560 is stand-alone or will be attached to another bill? I don't know enough about the process here. I didn't think something that would be attached to other legislation would need to pass committee or be voted on separately.

it looks like it is stand alone.  it has just been reported out of committee. still needs to be passed by house (likely) and senate (if 60 votes needed, as i think it needs, then who knows)

If this is true I see it as great news. Any administrative reform/4th amendment would come at Trump's request, and he would hardly sign this bill into law in that case. I can't see it passing, getting vetoed, and passing again with 2/3 happening before January 1.

If this bill passes and Trump does sign it....well, at that point it's likely "abandon ship" for me.

Eye4Valu

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8889 on: December 13, 2017, 07:12:38 PM »
"The Ginnie model is bound to meet resistance, however. In an editorial published on Wednesday, Dec. 13, Mortgage Bankers Association (MBA) President David Stevens argued against the Ginnie model. MBA favors a system that would convert Fannie and Freddie into private utilities, and allow for other chartered GSE-like entities to buy and securitize mortgages. The MBA plan, however, has the same big-picture goals as does the DeMarco-Bright plan." -Scotsman Guide

So maybe David Stevens isn't the enemy?