Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2630372 times)

Luke 5:32

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blackcoffee

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10181 on: July 11, 2018, 09:23:04 AM »
The current admin has majority in both congress and senate. I am sure many members of other party would also vote in favor of recap and release. IF they can't do it now. it can't get better after mid terms. Can it?

GSE reform starts with a recapitalization plan
https://www.scotsmanguide.com/News/2018/07/GSE-reform-starts-with-a-recapitalization-plan/

the purported reason they're waiting isn't to get a better set up - it is to maintain power for the ensuing 2 years and then use it.

blackcoffee

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10182 on: July 11, 2018, 09:29:48 AM »
What do you mean by " it is to maintain power for the ensuing 2 years and then use it" ??

The current admin has majority in both congress and senate. I am sure many members of other party would also vote in favor of recap and release. IF they can't do it now. it can't get better after mid terms. Can it?

GSE reform starts with a recapitalization plan
https://www.scotsmanguide.com/News/2018/07/GSE-reform-starts-with-a-recapitalization-plan/

the purported reason they're waiting isn't to get a better set up - it is to maintain power for the ensuing 2 years and then use it.

if the enact reform prior to the midterms, they'll ruffle lots of feathers... so waiting post mid-terms allows them runway.

Spekulatius

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10183 on: July 11, 2018, 09:36:46 AM »
What do you mean by " it is to maintain power for the ensuing 2 years and then use it" ??

The current admin has majority in both congress and senate. I am sure many members of other party would also vote in favor of recap and release. IF they can't do it now. it can't get better after mid terms. Can it?

GSE reform starts with a recapitalization plan
https://www.scotsmanguide.com/News/2018/07/GSE-reform-starts-with-a-recapitalization-plan/

the purported reason they're waiting isn't to get a better set up - it is to maintain power for the ensuing 2 years and then use it.

if the enact reform prior to the midterms, they'll ruffle lots of feathers... so waiting post mid-terms allows them runway.

Or in other words -the investment thesis here is „Hope springs eternal“
To be a realist, one has to believe in miracles.

blackcoffee

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10184 on: July 11, 2018, 12:14:27 PM »
What do you mean by " it is to maintain power for the ensuing 2 years and then use it" ??

The current admin has majority in both congress and senate. I am sure many members of other party would also vote in favor of recap and release. IF they can't do it now. it can't get better after mid terms. Can it?

GSE reform starts with a recapitalization plan
https://www.scotsmanguide.com/News/2018/07/GSE-reform-starts-with-a-recapitalization-plan/

the purported reason they're waiting isn't to get a better set up - it is to maintain power for the ensuing 2 years and then use it.

if the enact reform prior to the midterms, they'll ruffle lots of feathers... so waiting post mid-terms allows them runway.

Or in other words -the investment thesis here is „Hope springs eternal“

umm - it's a highly politically charged trade and you have to understand how the timing in DC works? It may not make an ounce of difference but emily was asking why they would wait. Well I gave one reason that may be why. It doesn't really have much to do with hope.


DRValue

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10185 on: July 13, 2018, 07:50:08 AM »
Any idea why the pref shares are down today?
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muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10186 on: July 13, 2018, 08:58:18 AM »
Market does not believe him anymore after the same talk over 2 years. What would change in next congress? Congress hasn’t done anything for last 10 years. The current admin at least not fight in court cases and release all the documents. At the very least, that is in their control. Not to mention they have control of both houses already.

www.c-span.org/video/?c4739821/david-trott-gses

My wild guess is that after the unexpected losses of a senator seat in Alamaba and a PA house seat, Trump decided to postpone housing reform until next year, to avoid headline risks that puts the mid term in danger. There are still lots of things Trump wants to do, such as the border wall, so if Republicans can stay in majority for two more years, he has a better chance to get his wishes fulfilled.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10187 on: July 13, 2018, 12:28:52 PM »
Any idea why the pref shares are down today?

No clue. I have noticed that the dividend/price correlation has been weakning over the last few months. FNMAT in particular has gotten very weak compared to the rest of the prefs. Either a large position is being slowly unloaded, or a slice of the market is believing more in the possibility of a redemption or conversion that doesn't take stated dividend rates into account.

The FMCC/FNMA gap has opened back up after getting close to closing completely yesterday, but the strength gap between the Freddie and Fannie prefs remains small, the weakness of FNMAT notwithstanding.

My model doesn't include FNMAS or FMCKJ due to their liquidity premiums.

DRValue

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10188 on: July 15, 2018, 12:57:53 AM »
Sunday morning gse conspiracy theory time.

The CSP is not in shareholders interest as it does not benefit the companies but instead opens them up to competition.

Directors of the gses would not be fulfilling their fiduciary duty to shareholders by implementing the csp.

So they have implemented the csp under the cover of conservatorship. Once it's implemented and in use it won't be able to be removed.

The gses will be released after the csp goes live in June 2019.


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investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10189 on: July 16, 2018, 08:15:18 AM »
hello everyone, I hope you're having a nice summer outside of the disappointing FnF share price action.

the clips from last week's hearing made it sound like mnuchin knows what he wants to try to do, preferably through the next congress but also with a less comprehensive backup administrative plan in mind.   

If possible to get through Congress, he likely supports most or all of Mulvaney's proposal from a few weeks back.  If it's administrative, he likely wont get a government guarantee and perhaps would focus on FnF explicitly paying the Tsy for a backstop (committment fee).   Either way, they need capital and the sooner the better.

i'd expect him to become less reserved about his intentions after either the elections or the new year.