Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2630443 times)

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9870 on: May 18, 2018, 07:40:52 AM »
Interesting bloomberg article: https://www.bloomberg.com/news/articles/2018-05-18/fannie-mae-advocacy-ban-doesn-t-stop-lawyer-from-pushing-views

Apparently this Brian Brooks fellow, who is on Fannies general counsel, is in Mnuchin's ear telling him the facts and that GSEs should be recapped / released administratively inline with FHFA's blueprint laid out earlier in the year. He also worked with Mnuchin at OneWest Bank.

At least someone over there isn't laying over.

as i recall brooks was a senior partner at a DC law firm, so he understands the legal lay of the land...plus he was mnuchin's number 2 at onewest, not just another guy.  if true, brooks silent advocacy for what is likely a moelis blueprint pathway informs what mnuchin might be thinking...which is to go down this pathway but with a paid-for mbs guaranty (need congress) to deal with all of the incoming from FnF haters.


Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9871 on: May 19, 2018, 03:35:19 PM »
as i recall brooks was a senior partner at a DC law firm, so he understands the legal lay of the land...plus he was mnuchin's number 2 at onewest, not just another guy.  if true, brooks silent advocacy for what is likely a moelis blueprint pathway informs what mnuchin might be thinking...which is to go down this pathway but with a paid-for mbs guaranty (need congress) to deal with all of the incoming from FnF haters.

That's beautiful.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9872 on: May 19, 2018, 05:53:00 PM »
as i recall brooks was a senior partner at a DC law firm, so he understands the legal lay of the land...plus he was mnuchin's number 2 at onewest, not just another guy.  if true, brooks silent advocacy for what is likely a moelis blueprint pathway informs what mnuchin might be thinking...which is to go down this pathway but with a paid-for mbs guaranty (need congress) to deal with all of the incoming from FnF haters.

That's beautiful.

if you think about it, the principal objection to FnF by its haters is that it could arbitrage the lower cost of financing due to the implicit fed guaranty for the benefit of its shareholders and execs (raines and howard were well paid).  forget that tbtf banks benefit from fed backing of deposits and the same implicit guaranty. there is no consistency where there is hate.

so if you want to do what's right (return FnF to a strong capital position) and be politic enough to understand what you have to do to do what is right (no more unpaid for implicit guaranty, and give mbs holders better regulatory capital treatment by holding fed backed mbs), then this would be a smart way of going about things.

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9873 on: May 19, 2018, 09:32:49 PM »
Except the intrinsic value has been stolen and continues to be stolen.

 “Since Congress has been unable to put forth a viable plan since conservatorship began nearly a decade ago, we believe it is increasingly likely that the administration and FHFA will soon take the lead on housing finance reform. While the exact timing of a resolution is difficult to predict and continued stock price volatility is likely, the per-share intrinsic value of each entity continues to grow along with their core businesses.”

https://assets.pershingsquareholdings.com/media/2014/09/17123349/Pershing-Square-1Q18-Investor-Letter-PSH.pdf

Stop whining emily. You already sold so what’s the point?

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9874 on: May 20, 2018, 06:37:37 AM »
if you think about it, the principal objection to FnF by its haters is that it could arbitrage the lower cost of financing due to the implicit fed guaranty for the benefit of its shareholders and execs (raines and howard were well paid).  forget that tbtf banks benefit from fed backing of deposits and the same implicit guaranty. there is no consistency where there is hate.

so if you want to do what's right (return FnF to a strong capital position) and be politic enough to understand what you have to do to do what is right (no more unpaid for implicit guaranty, and give mbs holders better regulatory capital treatment by holding fed backed mbs), then this would be a smart way of going about things.

I greatly appreciate your comments on this board... always helpful and insightful.  Thanks!

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9875 on: May 20, 2018, 07:53:09 AM »
as i recall brooks was a senior partner at a DC law firm, so he understands the legal lay of the land...plus he was mnuchin's number 2 at onewest, not just another guy.  if true, brooks silent advocacy for what is likely a moelis blueprint pathway informs what mnuchin might be thinking...which is to go down this pathway but with a paid-for mbs guaranty (need congress) to deal with all of the incoming from FnF haters.

That's beautiful.

if you think about it, the principal objection to FnF by its haters is that it could arbitrage the lower cost of financing due to the implicit fed guaranty for the benefit of its shareholders and execs (raines and howard were well paid).  forget that tbtf banks benefit from fed backing of deposits and the same implicit guaranty. there is no consistency where there is hate.

so if you want to do what's right (return FnF to a strong capital position) and be politic enough to understand what you have to do to do what is right (no more unpaid for implicit guaranty, and give mbs holders better regulatory capital treatment by holding fed backed mbs), then this would be a smart way of going about things.

Seems odd to me that Mnuchin would explicitly call out Watt's term ending under this scenario?   The FHFA proposal contemplates both shareholder owned entities w/ capital requirements & an explicit mbs all determined via congress.   Why call Watt out as an impediment to reform?   Possible I'm just overthinking this - and it's helpful that Mnuchin has someone in FHFA who can help push Congress to do something practical "or else"

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9876 on: May 20, 2018, 08:36:39 AM »
as i recall brooks was a senior partner at a DC law firm, so he understands the legal lay of the land...plus he was mnuchin's number 2 at onewest, not just another guy.  if true, brooks silent advocacy for what is likely a moelis blueprint pathway informs what mnuchin might be thinking...which is to go down this pathway but with a paid-for mbs guaranty (need congress) to deal with all of the incoming from FnF haters.

That's beautiful.

if you think about it, the principal objection to FnF by its haters is that it could arbitrage the lower cost of financing due to the implicit fed guaranty for the benefit of its shareholders and execs (raines and howard were well paid).  forget that tbtf banks benefit from fed backing of deposits and the same implicit guaranty. there is no consistency where there is hate.

so if you want to do what's right (return FnF to a strong capital position) and be politic enough to understand what you have to do to do what is right (no more unpaid for implicit guaranty, and give mbs holders better regulatory capital treatment by holding fed backed mbs), then this would be a smart way of going about things.

Seems odd to me that Mnuchin would explicitly call out Watt's term ending under this scenario?   The FHFA proposal contemplates both shareholder owned entities w/ capital requirements & an explicit mbs all determined via congress.   Why call Watt out as an impediment to reform?   Possible I'm just overthinking this - and it's helpful that Mnuchin has someone in FHFA who can help push Congress to do something practical "or else"

i saw that interview with the money honey, and she pointed out watts term is up next year, and mnuchin confirmed that the administration could replace him.  it was all pretty matter of fact as i recall; i saw no particular animus expressed by mnuchin.  of course having the senate confirm watt's replacement next year may be easier said than done.  watt may be around as acting director for awhile

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9877 on: May 20, 2018, 09:07:38 AM »
We may be underestimating the role of Brian Brooks.

At some point, his name made the circles as one possible Under Secretary of Treasury. According to Joe Light, he has actually become an unofficial emissary spearheading a specific housing goal straight from the inside. And we already know he is a Mnuchin's man.

Even if JL/Bloomberg aim is to undermine administrative action by exposing illegal lobbying, how likely are they to succeed when the most important congress actors are hitting the exit door and the appetite for a new, more stringent Jumpstart is probably missing? If Brian Brooks has really been knocking doors for months now maybe there is some sense of urgency somewhere in the administration. As in "no need to wait for another Congress".

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9878 on: May 20, 2018, 02:24:29 PM »
We may be underestimating the role of Brian Brooks.

At some point, his name made the circles as one possible Under Secretary of Treasury. According to Joe Light, he has actually become an unofficial emissary spearheading a specific housing goal straight from the inside. And we already know he is a Mnuchin's man.

Even if JL/Bloomberg aim is to undermine administrative action by exposing illegal lobbying, how likely are they to succeed when the most important congress actors are hitting the exit door and the appetite for a new, more stringent Jumpstart is probably missing? If Brian Brooks has really been knocking doors for months now maybe there is some sense of urgency somewhere in the administration. As in "no need to wait for another Congress".

this is a vague anti-lobbying rule and likely an infringement on free speech rights, certainly of the individual if not also the institution. 

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9879 on: May 20, 2018, 03:09:10 PM »
@Snarkypuppy

Re: Watt holdings things up: I wrote this in a previous comment, but its possible Watt is anti-admin reform even though he is pro GSEs. Or as Cherzeca said, maybe Mnuchin was just stating facts.

"Watt's an interesting player in the drama. For any administrative action, you need FHFA to sign off. Although Watt has expressed pro GSEs / pro shareholder thinking (desire to rebuild capital + the FHFA blueprint on reform), he has also stated multiple times that its up to Congress to decide the future of the GSEs, not himself/FHFA. Maybe with Watt so close to the end of the term, he is the one that isn't willing to "dance" and that's why Mnuchin made his comments last week about potentially replacing him with someone else in January (who may be more willing to sign off on an administrative action). "
« Last Edit: May 20, 2018, 03:11:05 PM by allnatural »