Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2718746 times)

locutusoftexas

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9550 on: March 16, 2018, 04:52:44 PM »
Mark Zandi, March 16th, 2018: The longer the GSEs remain in conservatorship, the harder it will be to get them out. That they will likely soon be scored by the CBO as providing a negative subsidy and thus providing revenues to the Treasury for other government needs will make it doubly hard politically to change the status quo. This is unfortunate, as the GSEs in conservatorship will not be able to keep up with the changing demographic and technological needs of the nationís underserved mortgage borrower.
https://www.urban.org/debates/revisiting-housing-finance-why-federal-role

The government likes free money and the GSEs are like perpetual money machines. Unfortunately the Second Law of Thermodynamics tells us that, just like perpetual motion machines, this is impossible. Ultimately there will be a steep price to pay if the government maintains the status quo for the GSEs. A simpler example of "money for nothing" is that of AIG selling credit default swaps without the reserves to pay when the mortgage-backed securities defaulted. This was a major factor precipitating the financial crisis of 2008-9. AIG thought that the chance of default was infinitesimal, which was counter to both statistics and the Second Law. The main question is, "What are the potential negative consequences of the government continuing the NWS and robbing the GSEs and their shareholders?"


investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9551 on: March 17, 2018, 06:11:24 AM »
I'm fairly surprised there was no modest bounce from the kudlow news over the past two weeks given his past social media comments + being plugged into a position that theoretically has actionable power on the matter.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9552 on: March 17, 2018, 07:54:09 AM »
I'm fairly surprised there was no modest bounce from the kudlow news over the past two weeks given his past social media comments + being plugged into a position that theoretically has actionable power on the matter.

i am watching congress dysfunction over the dodd frank amendment bill.  bipartisanship agt to mostly to help small banks is fragile and may not survive a reconciliation process.  if congress cant pass this modest bill then forget about housing finance

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9553 on: March 17, 2018, 09:39:59 AM »
I'm fairly surprised there was no modest bounce from the kudlow news over the past two weeks given his past social media comments + being plugged into a position that theoretically has actionable power on the matter.

i am watching congress dysfunction over the dodd frank amendment bill.  bipartisanship agt to mostly to help small banks is fragile and may not survive a reconciliation process.  if congress cant pass this modest bill then forget about housing finance

regarding the dodd frank bill, imo it will get done.  there were 67 votes in the senate, not 60, creating a little wiggle room.  hensarling is likely posturing, he'll throw in a few large bank goodies and perhaps lose a few D senators and call it a day.

on the kudlow news, not even a little bounce? my best guess is that potential institutional buyers are aware that ackman / berk / perry are selling and they think they'll get better prices in the near future.





investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9554 on: March 17, 2018, 03:08:53 PM »
You mean to say you know that Berkowitz and Ackman are selling? How?
I know this was debated here. But it does sort of make sense that government may only settle with shareholders who owned before NWS and with those who still own them. In pre NWS holder case, it is easily proven of harm. Those who bought after, knew NWS existed. So I am not happy as I am after NWS buyer. But the point here is if Berkowitz and Ackman are selling their pre NWS shares and will buy later, I doubt they will be compensated for post NWS shares.

I'm fairly surprised there was no modest bounce from the kudlow news over the past two weeks given his past social media comments + being plugged into a position that theoretically has actionable power on the matter.

i am watching congress dysfunction over the dodd frank amendment bill.  bipartisanship agt to mostly to help small banks is fragile and may not survive a reconciliation process.  if congress cant pass this modest bill then forget about housing finance

regarding the dodd frank bill, imo it will get done.  there were 67 votes in the senate, not 60, creating a little wiggle room.  hensarling is likely posturing, he'll throw in a few large bank goodies and perhaps lose a few D senators and call it a day.

on the kudlow news, not even a little bounce? my best guess is that potential institutional buyers are aware that ackman / berk / perry are selling and they think they'll get better prices in the near future.

as stated in the post, it's a guess.   my main suspicion is ackman selling, dragging down the whole complex (as investors rotate between the two).   he has punted other legacy dead end positions recently and fired staff; he's likely under investor pressure to tighten his ship.  when corker's plan was either released (perceived as not good for common) or failed, and phillips made his downbeat comments several weeks ago - combined with our terrible court record - he perhaps lost any visible catalyst to justify near term success. 

i could be way off.  but if i'm right, things will stay stuck, at best, until a huge clean up block trade happens in the common shares.

locutusoftexas

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9555 on: March 17, 2018, 03:33:57 PM »
Fairholme Fund holds only preferred shares -- not the common.

DocSnowball

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9556 on: March 17, 2018, 04:29:54 PM »
Do we know which hedge fund or mutual fund owns pre NWS preferred shares? Would appreciate the reply and how I can verify that. Have been considering buying more pre NWS preferreds this quarter. TIA

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9557 on: March 17, 2018, 05:26:56 PM »
Going back to discussion on pre NWS buyers: it looks like a settlement is smart strategy with pre NWS buyers: it satisfies Berkowitz, Perry, Ackman, Paulson and Icahn. If so, they won't sell. What do you think?

You mean to say you know that Berkowitz and Ackman are selling? How?
I know this was debated here. But it does sort of make sense that government may only settle with shareholders who owned before NWS and with those who still own them. In pre NWS holder case, it is easily proven of harm. Those who bought after, knew NWS existed. So I am not happy as I am after NWS buyer. But the point here is if Berkowitz and Ackman are selling their pre NWS shares and will buy later, I doubt they will be compensated for post NWS shares.

I'm fairly surprised there was no modest bounce from the kudlow news over the past two weeks given his past social media comments + being plugged into a position that theoretically has actionable power on the matter.

i am watching congress dysfunction over the dodd frank amendment bill.  bipartisanship agt to mostly to help small banks is fragile and may not survive a reconciliation process.  if congress cant pass this modest bill then forget about housing finance

regarding the dodd frank bill, imo it will get done.  there were 67 votes in the senate, not 60, creating a little wiggle room.  hensarling is likely posturing, he'll throw in a few large bank goodies and perhaps lose a few D senators and call it a day.

on the kudlow news, not even a little bounce? my best guess is that potential institutional buyers are aware that ackman / berk / perry are selling and they think they'll get better prices in the near future.

as stated in the post, it's a guess.   my main suspicion is ackman selling, dragging down the whole complex (as investors rotate between the two).   he has punted other legacy dead end positions recently and fired staff; he's likely under investor pressure to tighten his ship.  when corker's plan was either released (perceived as not good for common) or failed, and phillips made his downbeat comments several weeks ago - combined with our terrible court record - he perhaps lost any visible catalyst to justify near term success. 

i could be way off.  but if i'm right, things will stay stuck, at best, until a huge clean up block trade happens in the common shares.
From all listed, only Perry owns pre nws. Paulson does not care. He is not litigating and he is relying on a restructuring. Ackman and Berkowitz bought after. From lawsuits, Washington federal (did I get the name right) owns pre or maybe even pre conservator ship and is part of Berko's lawsuit. And some of us here. But Berkowitz made clear his legal fight includes pre/post so how can post be discarded?
« Last Edit: March 17, 2018, 05:30:52 PM by rros »

DocSnowball

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9558 on: March 17, 2018, 05:43:44 PM »
Thank you rros.

blackcoffee

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9559 on: March 19, 2018, 07:23:39 AM »
Buying now would not work if this scenario is real. You already know of NWS, so buying pre NWS shares ? How would you buy them? privately? I thought I saw Berkley Insurance name somewhere and they still owe a chunk and bought in 2005. There is some relationship between Berkeley and Fairlhome where Fairlhome may have bought from Berkley. I looked up on Google and it is all beyond my level to understanding.

"Berkley Insurance Company has continuously owned Fannie preferred shares since January 2005 and Freddie preferred shares since December 2009, and it had a reasonable expectation when it acquired its shares that a new class of securities in the Companies (or an amendment to an existing class of securities) would not wipe out its shares"





Do we know which hedge fund or mutual fund owns pre NWS preferred shares? Would appreciate the reply and how I can verify that. Have been considering buying more pre NWS preferreds this quarter. TIA

So I'm not a legal expert, and I know courts have made time based rulings in the past, but do they know they're not supposed to muck up the ownership structure like that? It's not supposed to matter when someone purchased the stock, all the rights transfer at all times. That's a pretty fundamental underpinning of the stock market, at least that's the general assumption in the broader market place. When they start down that path, it gets extremely complex very quickly.