Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2490477 times)

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9390 on: February 12, 2018, 11:48:38 AM »
$5,065,000,000 draw (payment to GSE's) anticipated by Treasury.

See "Payment to GSEs pursuant to PSPAs" on page 932 of this document: https://www.whitehouse.gov/wp-content/uploads/2018/02/tre-fy2019.pdf

Hmmm... (hat tip to Peter Chapman for finding this interesting entry)

Proceeds, GSE Equity Related Transactions...
2017 actual: $25.349B
2018 estimated: $6.147B
2019 estimated: $18.297B

Proceeds, GSE Equity Related Transactions: Legislative proposal, not subject to PAYGO...
2019 estimated: $439M

Page 962: https://www.whitehouse.gov/wp-content/uploads/2018/02/tre-fy2019.pdf
Doesn't beat around the bush, gets right down to the business of Christ laying down His life and conquering death for you, me, and everybody else that accepts Him. "Oh death, where is your sting? Oh Hell, where is your victory?" Listen: https://www.youtube.com/watch?v=7bJzhkWVANc


Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9391 on: February 12, 2018, 12:13:41 PM »
Proceeds, GSE Equity Related Transactions: Legislative proposal, not subject to PAYGO...
2019 estimated: $439M

Page 962: https://www.whitehouse.gov/wp-content/uploads/2018/02/tre-fy2019.pdf

$439M = Increase in g-fees?
Doesn't beat around the bush, gets right down to the business of Christ laying down His life and conquering death for you, me, and everybody else that accepts Him. "Oh death, where is your sting? Oh Hell, where is your victory?" Listen: https://www.youtube.com/watch?v=7bJzhkWVANc

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9392 on: February 12, 2018, 01:15:24 PM »
https://www.treasury.gov/about/budget-performance/strategic-plan/Documents/2018-2022_Treasury_Strategic_Plan_web.pdf

Page 16 and 17 discusses Fannie/Freddie.
I lit a cigar and filled up a glass of scotch figuring I would need a few hours to read the "discussion". It took only one puff.

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9393 on: February 12, 2018, 01:17:46 PM »
Treasury has treated us, is treating us and will treat us as nobodies. Forever. No matter who is at the helm. Maybe it's the lawsuits. Or the lawsuits may have taken the hatred to new heights.

Eye4Valu

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9394 on: February 12, 2018, 02:08:57 PM »
As usual, Tim Howard does the best job summing it up:

"There are two issues here. The first is that until Fannie and Freddie are removed from conservatorship (or liquidated), or until the net worth sweep is declared illegal or cancelled, the budget document will show continued receipts from the sweep for the full ten years of the projection. There is nothing of any policy significance here; itís just budgeting convention. As for the ten basis point increase in guaranty fees, unless there is some discussion about this elsewhere in the document (which I havenít read, and donít intend to), I would think that given the large amounts of red ink produced over the forecast horizon by the tax reform package and recent spending agreement, the budgeteers are looking for any credible assumptions they can make that will produce more revenue; every $25.7 billion they can put into their projections makes the projected deficit smaller."

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9395 on: February 13, 2018, 05:49:03 AM »
As usual, Tim Howard does the best job summing it up:

"There are two issues here. The first is that until Fannie and Freddie are removed from conservatorship (or liquidated), or until the net worth sweep is declared illegal or cancelled, the budget document will show continued receipts from the sweep for the full ten years of the projection. There is nothing of any policy significance here; itís just budgeting convention. As for the ten basis point increase in guaranty fees, unless there is some discussion about this elsewhere in the document (which I havenít read, and donít intend to), I would think that given the large amounts of red ink produced over the forecast horizon by the tax reform package and recent spending agreement, the budgeteers are looking for any credible assumptions they can make that will produce more revenue; every $25.7 billion they can put into their projections makes the projected deficit smaller."

I believe Phillips made clear he wanted to level the playing field.  raising the g-fees is a way to accomplish this.  other potential benefits of throwing this in there are a) it ramps up the estimated 10year revenues to Treasury to close to 200bn (from ~ 140bn last year), which raises the opportunity cost of shutting them down without warrant value (if they do indeed want them out of conservatorship)  and  b) it possibly creates more economic room for a healthy fee paid to the govt for an explicit guarantee.

 

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9396 on: February 13, 2018, 10:01:39 AM »
@investorG

agree.  but what i find interesting is that while mnuchin has said over last year that he wants treasury to work with congress on a bipartisan basis, i have gleaned zero participation of treasury in that process to date.  neither mnuchin nor phillips have said anything about their involvement with senate banking committee staff.  watt has gotten involved but only from the outside sending in his fhfa perspectives letter.  i just think this cooperation stance is eyewash, and what treasruy is really doing is just giving congress some time and rope.

Eye4Valu

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9397 on: February 13, 2018, 10:30:44 AM »
@investorG

agree.  but what i find interesting is that while mnuchin has said over last year that he wants treasury to work with congress on a bipartisan basis, i have gleaned zero participation of treasury in that process to date.  neither mnuchin nor phillips have said anything about their involvement with senate banking committee staff.  watt has gotten involved but only from the outside sending in his fhfa perspectives letter.  i just think this cooperation stance is eyewash, and what treasruy is really doing is just giving congress some time and rope.

My guess would be because Mnuchin has a different plan in mind than the congressman, otherwise you would hear more support for their congressional proposals. Mnuchin does have more experience and knowledge in this department. Will be interesting to see what his thoughts are when he finally reveals them.

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9398 on: February 13, 2018, 01:13:56 PM »
Anybody thinks that today's price weakness is related to the news that Corker may be running for re-election?

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9399 on: February 13, 2018, 05:18:00 PM »
Anybody thinks that today's price weakness is related to the news that Corker may be running for re-election?

I doubt rumors of Corker seeking re-election would move the needle much. He hasn't been able to get any legislation through yet, and Phillips said that the conservatorships will end during this presidential term.