Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2738651 times)

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9160 on: January 18, 2018, 10:50:57 AM »
FHFA:  Capital buffer is necessary
Treasury:  We expect our dividend
Action:   Coordinated and agreed upon capital buffer

FHFA:  Millstein plan
Treasury:  Nothing we are allergic to
Action:   ?

I think the odds are EXTREMELY low that FHFA acted in a silo here, despite clear coordination on other related actions.  They are politicians and they are very carefully doing what politicians do - crafting the optics of what is happening behind closed doors
« Last Edit: January 18, 2018, 10:53:50 AM by SnarkyPuppy »


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9161 on: January 18, 2018, 10:57:24 AM »
i think the market is confused, and i cant say i am surprised. 

you have three principal actors, watt, mnuchin and corker/warner, and only watt has really tipped his hand in any specific way.  CW2.0 is still being written, but to the extent it promotes competition, watt is clear that he is against that and wants FnF all alone (at least initially) as national full market participants such as they are now but subject to utility regulation (which would seem positive for shareholders).  phillips just wasted everyone's time by saying nothing, which leads me to believe that mnuchin is too busy still with other things to get any treasury plan signed off.

but yes, i would have thought the market would be more positive to the last 24 hours events

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9162 on: January 18, 2018, 10:57:39 AM »
I think the odds are EXTREMELY low that FHFA acted in a silo here, despite clear coordination on other related actions.

+1

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9163 on: January 18, 2018, 11:14:12 AM »
FHFA:  Capital buffer is necessary
Treasury:  We expect our dividend
Action:   Coordinated and agreed upon capital buffer

FHFA:  Millstein plan
Treasury:  Nothing we are allergic to
Action:   ?

I think the odds are EXTREMELY low that FHFA acted in a silo here, despite clear coordination on other related actions.  They are politicians and they are very carefully doing what politicians do - crafting the optics of what is happening behind closed doors

I think the politics of who says what, when, and in what order is important. FHFA having this plan and Treasury saying "yeah sure, why not" is much better optically than vice versa.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9164 on: January 18, 2018, 11:20:04 AM »
Seems to me like the timeline is getting extended (discouraging), but the likelihood of a favorable outcome is increasing (encouraging).

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9165 on: January 18, 2018, 11:25:17 AM »
Huh???

https://twitter.com/joelight/status/954070600502403072
 Joe Light‏Verified account @joelight
Phillips: "There actually aren't shareholders so there's no longer a fiduciary relationship between stakeholders in the traditional way. We sort of see ourselves as the stakeholder at the Treasury" but not represented by the board and employees because of the shares' nature

Calabria said yesterday...
“We do want to see our state-owned enterprises move towards liberalization.”
https://www.marketwatch.com/amp/story/guid/3F8481DA-FBCD-11E7-8AB6-ABAEF652B326?__twitter_impression=true

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9166 on: January 18, 2018, 11:34:38 AM »
FHFA:  Capital buffer is necessary
Treasury:  We expect our dividend
Action:   Coordinated and agreed upon capital buffer

FHFA:  Millstein plan
Treasury:  Nothing we are allergic to
Action:   ?

I think the odds are EXTREMELY low that FHFA acted in a silo here, despite clear coordination on other related actions.  They are politicians and they are very carefully doing what politicians do - crafting the optics of what is happening behind closed doors

I think the politics of who says what, when, and in what order is important. FHFA having this plan and Treasury saying "yeah sure, why not" is much better optically than vice versa.

i agree with this.

i am also reminded of goldman sach's ex ceo, rubin, who was a big optionality guy, and mnuchin worked under him then.  rubin argued that you make a decision late in game after keeping all options open, because your ability to make a "correct" decision increases over time as more information is developed and more participants have shown their cards first.  it seems to me that treasury (mnuchin) is following this conceptual pathway.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9167 on: January 18, 2018, 11:46:02 AM »
Huh???

https://twitter.com/joelight/status/954070600502403072
 Joe Light‏Verified account @joelight
Phillips: "There actually aren't shareholders so there's no longer a fiduciary relationship between stakeholders in the traditional way. We sort of see ourselves as the stakeholder at the Treasury" but not represented by the board and employees because of the shares' nature

wtf?  :o

Watt said that the SMEs should be shareholder-owned companies. Does Phillips (and Mnuchin) think that current shareholders have no rights at all and will just be washed away? Or just that current shareholders are that only in name because they have no voting rights or ability to participate in company earnings?

Common shares took a small hit just now but not nearly to the extent I would have expected. This news seems to drastically increase the uncertainty behind both commons and juniors, though it is much harder to wipe out (or heavily dilute) the juniors.

Joe Light also tweeted this:
https://twitter.com/joelight/status/954066284362240000

Quote
[Phillips] said Mnuchin is committed to ending the conservatorships during this administration

So if Congress gets nothing done at all Mnuchin will eventually act, but it could take up to 3 more years.

HalfMeasure

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9168 on: January 18, 2018, 11:49:50 AM »
Huh???

https://twitter.com/joelight/status/954070600502403072
 Joe Light‏Verified account @joelight
Phillips: "There actually aren't shareholders so there's no longer a fiduciary relationship between stakeholders in the traditional way. We sort of see ourselves as the stakeholder at the Treasury" but not represented by the board and employees because of the shares' nature

wtf?  :o

Watt said that the SMEs should be shareholder-owned companies. Does Phillips (and Mnuchin) think that current shareholders have no rights at all and will just be washed away? Or just that current shareholders are that only in name because they have no voting rights or ability to participate in company earnings?

Common shares took a small hit just now but not nearly to the extent I would have expected. This news seems to drastically increase the uncertainty behind both commons and juniors, though it is much harder to wipe out (or heavily dilute) the juniors.

Joe Light also tweeted this:
https://twitter.com/joelight/status/954066284362240000

Quote
[Phillips] said Mnuchin is committed to ending the conservatorships during this administration

So if Congress gets nothing done at all Mnuchin will eventually act, but it could take up to 3 more years.

I think you have to contextualize it from the perspective that (I think) he was addressing the governance structure, not necessarily the economics.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9169 on: January 18, 2018, 11:50:44 AM »
"Watt's views appear to broadly coincide with the package being developed by Chairman Mike Crapo, R-Ind., and Sherrod Brown, D-Ohio."

https://www.americanbanker.com/news/fhfa-breaks-silence-on-housing-finance-reform

ok, i confess ignorance.  i was aware of a CW2.0 in the works, as reported by bloomberg, but i wasnt aware that there was a crapo/brown in the works.  anyone know about this?