Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2381801 times)

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9170 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
"Lead me with strong hands, stand up when I can't. Don't leave me hungry for love chasing dreams, what about us? Show me you're willing to fight, that I'm still the love of your life." Listen: https://www.youtube.com/watch?v=yLr6G8Xy5uc


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9171 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 #9172 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 #9173 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 #9174 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?

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9175 on: January 18, 2018, 11:53:16 AM »
I think you have to contextualize it from the perspective that (I think) he was addressing the governance structure, not necessarily the economics.

The market seems to agree with you. I would love to have more context behind those quotes though.

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9176 on: January 18, 2018, 12:02:17 PM »
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.

imo mnuchin will likely go through the motions in 2018. 

odds favor nothing will get done, the divide with the House R's is probably too deep. and the deadline is 7 months away.  phillips just bought time.

in 2019, maxine waters enters the scene replacing hensearling, if the D's win the house as predicted. i'd guess watt gets renominated to see this through.  and in the senate, it's likely either crapo (or someone else if he takes the finance committee chairmanship post-hatch) OR sherrod brown.  in this base case scenario, things become easier for mnuchin.

in addition, housing reform can stimulate the economy.  we just had taxes.  trump's possibly running for re-election in 34 months.  they might want any economic benefit to come later in his first term.

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9177 on: January 18, 2018, 01:40:31 PM »
"Treasury's Craig Phillips also told a group today that Fannie Mae and Freddie Mac will require a draw from Treasury as a result of tax reform which reduced the value of deferred tax assets. This is despite a deal with FHFA to allow each to retain $3 billion in capital"

Doesn't make any sense.  Only conclusive is they are saying one thing and doing another.

constructive

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9178 on: January 18, 2018, 02:19:23 PM »
"Treasury's Craig Phillips also told a group today that Fannie Mae and Freddie Mac will require a draw from Treasury as a result of tax reform which reduced the value of deferred tax assets. This is despite a deal with FHFA to allow each to retain $3 billion in capital"

Doesn't make any sense.  Only conclusive is they are saying one thing and doing another.

Their writedowns are going to be much bigger than $3B, roughly $12.4B and $5.9B.

https://www.housingwire.com/articles/41727-republican-tax-plan-will-trigger-another-fannie-freddie-bailout

waynepolsonAtoZ

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9179 on: January 18, 2018, 02:23:32 PM »
"imo mnuchin will likely go through the motions in 2018."

I like your scenario. I tend to view Mnuchin as a bad guy for FnF, but one never knows for sure.