Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 1780287 times)

Eye4Valu

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8630 on: November 14, 2017, 08:43:38 AM »
The Treasury, taxpayers and shareholders of GSEs are aligned in their interests. We're in this together in terms of reform. I don't see this as us versus them.


rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8631 on: November 14, 2017, 08:48:33 AM »
I just wish someone would hold Mnuchin's feet to the fire and ask "if taxpayer safety is such a concern, why do you keep taking the NWS payments and draining the GSEs' capital?" This is the one significant area where Mnuchin's actions are at odds with his words.

Before any interview or conference, Mnuchin might ask them to not discuss that topic.
For sure he or his team screen out questions. And for sure he rehearses answers. But as midas said, the dissonance is so large that nobody asking is laughable. How much longer can he maintain the precept, as number one or two, of taxpayer's protection once capital dwindles to zero?

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8632 on: November 14, 2017, 09:08:35 AM »
I don't really think it's news that Mnuchin said the GSE's will live.  There haven't been too many people still saying "kill the GSE's."  Some, but not many.  What matters is how shareholders are treated in any reform or fix.

How do you realistically keep the GSEs and ensure they are adequately capitalized?  (Two things explicitly said by Mnuchin at this point)

I hear ya, I'm just trying to spend my energy thinking of what strategy the gov't can conjure up that would leave shareholders high and dry.  With that said, I think prefs end up doing very well.

Couldn't agree more.  Majority of posts here have been focused on upside. 

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8633 on: November 14, 2017, 09:32:04 AM »
I doubt Mnuchin cares what press says if shareholders finally get what they deserve. The press talks negative on anything this administration does, so the admin has become immune to it (like we have become immune to fake news/spin by John Carney and Joe Light). Based on his body language, I think Mnuchin will solve this and will be a win for all. Only David Stevens thinks he can cut one hand (shareholders) and make the other hand (banks) longer and it will stick. David Stevens is a fool. He doesn't know what being rational and fair is and a win win solution is. He is one of the biggest loser in all of this who is trying a fight with rightful owners of both companies: shareholders. I can't wait for Gretchen Morgenson write something in WSJ.

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8634 on: November 14, 2017, 10:28:52 AM »
Being that mnuchin carefully answers the questions and no doubt screens them why not just answer a question regarding shareholders? The easiest answer would be they will get nothing right? FnF would still be backed by the gov, the mortgage market likely would continue as is. What would change? Shareholders would be pissed, and lawsuits now doubt would continue with vigor.

I guess my point or question is if shareholders are getting nothing(and I think whether or not they are is already known) why not just come out and say it. Get it over with and move on.  Why the wait? It will affect the share price but who cares. Is it only the warrants keeping the gov from just saying F it and restructuring them?

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8635 on: November 14, 2017, 10:53:52 AM »
Because they need us to support for reelection to the second term. So why rock the boat. We have been manipulated and looted  for last 9 years, what is another 7 years?


I guess my point or question is if shareholders are getting nothing(and I think whether or not they are is already known) why not just come out and say it.
« Last Edit: November 14, 2017, 11:03:37 AM by emily »

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8636 on: November 14, 2017, 11:07:43 AM »
Being that mnuchin carefully answers the questions and no doubt screens them why not just answer a question regarding shareholders? The easiest answer would be they will get nothing right? FnF would still be backed by the gov, the mortgage market likely would continue as is. What would change? Shareholders would be pissed, and lawsuits now doubt would continue with vigor.

I guess my point or question is if shareholders are getting nothing(and I think whether or not they are is already known) why not just come out and say it. Get it over with and move on.  Why the wait? It will affect the share price but who cares. Is it only the warrants keeping the gov from just saying F it and restructuring them?

This is a hard question to answer, but my best guess is that Mnuchin is still trying to walk the razor's edge. If he comes out in support of shareholders he will lose political capital with those in Congress (and elsewhere) who want hedge funds to not make a "windfall" profit, while if he comes out against them then the "respect shareholder rights" types won't like it.

He will naturally have to make his intentions known eventually, but if he is trying to keep Congress working towards tax reform, not to mention housing finance reform, he is better served as appearing agnostic.


I still wish that I knew more about the possible ramifications of the RNC resolution. It is hugely positive language from the ruling party, yet it has not been talked about at all by the major players, so it is hard to tell what impact (if any) it actually has. So far it has been lost in the shuffle. It does provide the administration some cover if they do reform without Congress; they could say "hey, we put up a resolution months ago! We're just following it!"

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8637 on: November 14, 2017, 11:26:40 AM »
I believe Mnuchin has a specific plan - why else would watt have backed off after a forceful comment about the airbags this summer.

I believe we will find out this plan in 1q 2018.  wisely, mnuchin -- after overstepping last nov -- likely looked at the landscape in early 2017 after the court case was lost, and decided he would get zero upside in talking positive about the GSEs until a) jumpstart expired and b) tax reform is completed (or fails).  so likely he put a gag order on himself and his team and trump for 2017.

trump loves real estate.  mnuchin, when pressed, has signaled he likes FnF.  the campaigna and staff connections are there.  I believe we'll see a completely different attitude come 2018.

however someone with a lot bigger position than me (the mkt) strongly disagrees with my view -I'd place the securities ~ 50pct above current prices as the current (not end) fair value.   

good luck everyone!

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8638 on: November 14, 2017, 11:31:31 AM »
Being that mnuchin carefully answers the questions and no doubt screens them why not just answer a question regarding shareholders? The easiest answer would be they will get nothing right? FnF would still be backed by the gov, the mortgage market likely would continue as is. What would change? Shareholders would be pissed, and lawsuits now doubt would continue with vigor.

I guess my point or question is if shareholders are getting nothing(and I think whether or not they are is already known) why not just come out and say it. Get it over with and move on.  Why the wait? It will affect the share price but who cares. Is it only the warrants keeping the gov from just saying F it and restructuring them?

This is a hard question to answer, but my best guess is that Mnuchin is still trying to walk the razor's edge. If he comes out in support of shareholders he will lose political capital with those in Congress (and elsewhere) who want hedge funds to not make a "windfall" profit, while if he comes out against them then the "respect shareholder rights" types won't like it.

He will naturally have to make his intentions known eventually, but if he is trying to keep Congress working towards tax reform, not to mention housing finance reform, he is better served as appearing agnostic.


I still wish that I knew more about the possible ramifications of the RNC resolution. It is hugely positive language from the ruling party, yet it has not been talked about at all by the major players, so it is hard to tell what impact (if any) it actually has. So far it has been lost in the shuffle. It does provide the administration some cover if they do reform without Congress; they could say "hey, we put up a resolution months ago! We're just following it!"
Being agnostic is a good way to put it. But perhaps *Treasury* supersedes any individual. Including Mnuchin and any treasurer after him. Whoever *Treasury* really is, it was adamant that shareholders would not see a penny. It would be hard to morph that same Treasury into one that upholds shareholders' rights. Maybe he just got a slap on the wrist last time stocks move on his statements. And perhaps no more statements until it is time.

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #8639 on: November 14, 2017, 01:28:00 PM »
Schumer: Injecting health care into tax bill will make Americans "outraged"

Didn't they inject GSE's into a spending bill that GSE senior preferreds can't be disposed till Jan 1, 2018 ? What you sow is what you reap.