Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2374945 times)

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9410 on: February 14, 2018, 12:57:37 PM »
From Twitter.  Maybe Tim and other knowledgeable people can expand on this, if accurate.  I didn't click through to the link so no comment.

https://twitter.com/KarenPetrou/status/963871258164301826
 
Quote
@KarenPetrou
 2m2 minutes ago
More
Hidden in Fannie 4Q: new ROE standards that turn GSEs into utilities http://bit.ly/2BZrjG8

Was just about to post this myself :-)  Petrou was described by the American Banker in 2012 as the “sharpest mind analyzing banking policy today -- maybe ever.”  Wonder if there's any truth behind her hinting that GSEs will be utilities.

I don't know how I missed it, but Karen Petrou wrote this fantastic piece about the Corker bill two weeks ago:

http://www.fedfin.com/blog/2604-karen-petrou-on-how-to-love-a-mortgage-monopoly

I would certainly believe American Banker's quote is accurate. She cuts straight through all the BS and shows that the only viable endgames are utilities (without competitors) or government-owned corporations. I hope she has the ear of some of the power players involved.

Does anyone here have access to today's article? I had been wondering if there were any significant changes in Fannie's filing and it sounds like this is one such.


emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9411 on: February 14, 2018, 01:45:19 PM »
Tim Howard says that 10K discusses opposite of utility.

https://howardonmortgagefinance.com/2018/02/05/waiting-for-mr-corker/#comments

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9412 on: February 14, 2018, 02:27:28 PM »
From Twitter.  Maybe Tim and other knowledgeable people can expand on this, if accurate.  I didn't click through to the link so no comment.

https://twitter.com/KarenPetrou/status/963871258164301826
 
Quote
@KarenPetrou
 2m2 minutes ago
More
Hidden in Fannie 4Q: new ROE standards that turn GSEs into utilities http://bit.ly/2BZrjG8

Was just about to post this myself :-)  Petrou was described by the American Banker in 2012 as the “sharpest mind analyzing banking policy today -- maybe ever.”  Wonder if there's any truth behind her hinting that GSEs will be utilities.

Petrou to me on Twitter...
This is key section. A required ROE makes a regulated company a utility – think power companies.  Even biggest banks pick their own ROEs despite all the rules mandating higher capital, limited activities, etc... (1/2)

W/an ROE requirement, GSEs cannot discount to compete and must maximize profit under FHFA controls to dividend back to Treasury. (2/2)

Howard says...
Ms. Petrou most likely is referring to a discussion in the 10K about FHFA’s “Conservatorship Capital Framework,” which are new capital standards the company said FHFA directed it to implement in 2017 that include “specific requirements relating to risk on our book of business and modeled returns on our new acquisitions.”

In two places in the 2017 10K Fannie says, “In December 2017 and February 2018, FHFA, in its capacity as conservator, provided guidance relating to our guaranty fee pricing for new single-family acquisitions. FHFA’s guidance requires that we meet a specified minimum return on equity target based on the conservator capital framework. We must implement this target in the first quarter of 2018.” Then, when discussing guaranty fees on page 79, it adds this sentence: “We may be required to increase guaranty fees charged on some loans in order to meet this requirement.”
That’s not “utility regulation,” though. Utility regulation implies a maximum return on equity, which keeps guaranty fees down. Here FHFA is insisting on a minimum return on (notional) equity, which Fannie says may push some 2018 guaranty fees up.
« Last Edit: February 14, 2018, 02:32:27 PM by 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 #9413 on: February 15, 2018, 01:21:43 PM »
Tim Howard clarifies
"I have no disagreement with Josh on this; the problem here is that my response was not well worded. I was referring to the powers FHFA would have as regulator, if and when Fannie and Freddie were released from conservatorship. As conservator, it clearly does have the power to regulate the companies’ returns, and–if you believe that the decision of the majority of the judges on the DC Court of Appeals in the Perry Capital case will be upheld–also to require that Fannie and Freddie finance a project to send people to Mars."

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9414 on: February 16, 2018, 10:27:01 AM »
You buy a home. You make your payments. Then the bank asks that you fork all your money but can keep few bucks for meals. You say you have paid all the principal back and more than 10% interest rates to date and have been a good citizen, paid your taxes and helped many. They say, it doesn’t matter, go to court and lose as courts judges are in our pocket by fake propganda through fake news. Then the bank orders to donate the few bucks that were for meals to charitable contributions via trust funds and that you can survive on food stamps guaranteed by treasury.  Not just in Venezuela but also in America.

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9415 on: February 16, 2018, 10:44:29 AM »
So where is Watt's dereliction of duty?

All of them are total clowns. All.

Eye4Valu

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9416 on: February 16, 2018, 12:41:23 PM »
So where is Watt's dereliction of duty?

All of them are total clowns. All.

All except for Corker and Hensarling. Just kidding!

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9417 on: February 19, 2018, 08:09:30 AM »
What would change look like?

We have had terrible luck since 8/17/2012, except for one tiny bone from the court of appeals. The rest, all adverse events.

It's time for change. Meaning, we move on. Will this change come as a final negative outcome -last nail in the coffin- or will it take the form of doors getting wide open?

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9418 on: February 19, 2018, 11:29:04 AM »
The Court will release an order list at 9:30 a.m. on Tuesday, February 20.

https://www.supremecourt.gov/orders/ordersofthecourt/17

Not sure if it even matters as most experts are saying we will be denied.

Is this relevant to us?

http://www.scotusblog.com/2016/11/argument-analysis-justices-dubious-about-federal-jurisdiction-for-suits-involving-fannie-mae/
« Last Edit: February 19, 2018, 03:30:12 PM by emily »

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9419 on: February 20, 2018, 06:34:33 AM »
Supreme Court denied hearing.  ::)
Does this mean Perry case is officially dead, and the only legal pathway forward is the Sweeney case?
« Last Edit: February 20, 2018, 06:49:20 AM by muscleman »