Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3143775 times)

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11160 on: January 10, 2019, 11:12:35 AM »
An announcement that the NWS has been stopped seems imminent.

https://twitter.com/JoshRosner/status/1083440288415260672
@JoshRosner
OTTING in Politico Pro: "Our goal is to be able to complete the release of the GSEs but at the same time make sure that it supports the U.S. housing market."


https://twitter.com/Fanniegate101/status/1083441893340573696
@Fanniegate101
Joseph Otting has made his first on the record comments about ending $FNMA & $FMCC conservatorships & releasing them. The end of this charade is getting closer by the day. Capital is the next logical step by amending the 'net worth sweep' #FannieGate
« Last Edit: January 10, 2019, 11:36:42 AM by Luke 5:32 »
Invest for retirement?  Sure.  But investing in eternity is infinitely more important.  Don't get it twisted.  "...but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal."  Matthew 6:20


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11161 on: January 10, 2019, 12:53:43 PM »

Full text:

Otting: ‘A lot’ can get done during acting FHFA tenure

By Victoria Guida
01/10/2019 12:45 PM EDT

Joseph Otting, who took over as acting director of the Federal Housing Finance Agency this week, said today there’s a lot he can accomplish to further housing finance reform during his tenure at the agency, despite the temporary nature of his position.

Otting, who is also comptroller of the currency, will be in charge of the agency that oversees Fannie Mae and Freddie Mac until a permanent replacement is confirmed. President Donald Trump has nominated vice presidential aide and libertarian economist Mark Calabria for that position.
“There’s a clear mission that’s outlined by the Treasury and the White House, what they want to accomplish,” Otting said in an interview this morning inside the building that houses both the OCC and FHFA.

“If I can move that down the rails before Mark is confirmed, there’s a lot of things I think we can get done, and then Mark could come in and continue down the path of the mission that’s been laid out,” he added.

Otting echoed Treasury Secretary Steven Mnuchin by saying that “ending conservatorship is a priority,” and maintaining the 30-year mortgage is important.
He declined to go into detail about his views on what type of reforms might be needed to the mortgage giants, often referred to as government-sponsored enterprises.

“We have to look at the capital and liquidity requirements of the GSEs,” he said. “But by all accounts … I think the GSEs can be commended for the way they have repositioned their business models and the way they are serving the market.”

He said he was still getting his bearings in his new role, but added: “Our goal is to be able to complete the release of the GSEs but at the same time make sure that it supports the U.S. housing market.”

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11162 on: January 10, 2019, 12:56:19 PM »
How can the market spin this as negative...  8)

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11163 on: January 10, 2019, 01:01:16 PM »
An announcement that the NWS has been stopped seems imminent.

https://twitter.com/JoshRosner/status/1083440288415260672
@JoshRosner
OTTING in Politico Pro: "Our goal is to be able to complete the release of the GSEs but at the same time make sure that it supports the U.S. housing market."


https://twitter.com/Fanniegate101/status/1083441893340573696
@Fanniegate101
Joseph Otting has made his first on the record comments about ending $FNMA & $FMCC conservatorships & releasing them. The end of this charade is getting closer by the day. Capital is the next logical step by amending the 'net worth sweep' #FannieGate


Hopefully really imminent. That piece from October said new people were going to act fast. Lets see it!

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11164 on: January 10, 2019, 03:04:04 PM »
Unbelievable.  I honestly think investor fatigue is a big part of the slow market realization.  Nobody wants to look at this again

TwoCitiesCapital

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11165 on: January 10, 2019, 03:15:18 PM »
Unbelievable.  I honestly think investor fatigue is a big part of the slow market realization.  Nobody wants to look at this again

The reactions here are nuts. You'd think the preferred weren't 40+% off their recent lows based on the commentary here. Markets have responded. It's going up, but there's just been so many head-fakes in the past that it's a bit more cautious. 

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11166 on: January 10, 2019, 03:47:53 PM »
Unbelievable.  I honestly think investor fatigue is a big part of the slow market realization.  Nobody wants to look at this again

The reactions here are nuts. You'd think the preferred weren't 40+% off their recent lows based on the commentary here. Markets have responded. It's going up, but there's just been so many head-fakes in the past that it's a bit more cautious.

Prefs trading at 32% of par right now is nuts.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11167 on: January 10, 2019, 05:14:34 PM »
“There’s a clear mission that’s outlined by the Treasury and the White House, what they want to accomplish,” Otting said in an interview this morning inside the building that houses both the OCC and FHFA.

“We have to look at the capital and liquidity requirements of the GSEs,” he said. “But by all accounts … I think the GSEs can be commended for the way they have repositioned their business models and the way they are serving the market.”

He said he was still getting his bearings in his new role, but added: “Our goal is to be able to complete the release of the GSEs but at the same time make sure that it supports the U.S. housing market.”

Seems like yuge news to me. The administration has a clear plan and they trust Otting and Calabria to implement it. They also think that the GSEs are mostly okay as-is, and want the companies released by the end of 2020.

I doubt Calabria is too allergic to the administration's plans, otherwise I don't think he would have taken the job. I still think Calabria's past views are important because there are any number of yes-men Trump could have picked instead. He doesn't like the NWS, the companies need to be recapped before they can be released, and a recap can't happen while the NWS is in place. Thus the NWS's days are numbered.

Still, what's the downside thesis for the prefs from here? I'm really struggling. Seniors remain in place even after the NWS is gone? Government tries to force through an unfavorable conversion?

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11168 on: January 10, 2019, 06:07:14 PM »
“There’s a clear mission that’s outlined by the Treasury and the White House, what they want to accomplish,” Otting said in an interview this morning inside the building that houses both the OCC and FHFA.

“We have to look at the capital and liquidity requirements of the GSEs,” he said. “But by all accounts … I think the GSEs can be commended for the way they have repositioned their business models and the way they are serving the market.”

He said he was still getting his bearings in his new role, but added: “Our goal is to be able to complete the release of the GSEs but at the same time make sure that it supports the U.S. housing market.”

Seems like yuge news to me. The administration has a clear plan and they trust Otting and Calabria to implement it. They also think that the GSEs are mostly okay as-is, and want the companies released by the end of 2020.

I doubt Calabria is too allergic to the administration's plans, otherwise I don't think he would have taken the job. I still think Calabria's past views are important because there are any number of yes-men Trump could have picked instead. He doesn't like the NWS, the companies need to be recapped before they can be released, and a recap can't happen while the NWS is in place. Thus the NWS's days are numbered.

Still, what's the downside thesis for the prefs from here? I'm really struggling. Seniors remain in place even after the NWS is gone? Government tries to force through an unfavorable conversion?

the common stock value (40% of its two year high) is still depressed on a relative basis as compared to junior pref (currently at 80% of two year high), and the junior pref is still only at par/3 .  so there remains still great uncertainty and fear. 

this is less an investment than a "black mirror" episode.
« Last Edit: January 11, 2019, 07:26:02 AM by cherzeca »

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11169 on: January 10, 2019, 06:55:44 PM »
An announcement that the NWS has been stopped seems imminent.

https://twitter.com/JoshRosner/status/1083440288415260672
@JoshRosner
OTTING in Politico Pro: "Our goal is to be able to complete the release of the GSEs but at the same time make sure that it supports the U.S. housing market."


https://twitter.com/Fanniegate101/status/1083441893340573696
@Fanniegate101
Joseph Otting has made his first on the record comments about ending $FNMA & $FMCC conservatorships & releasing them. The end of this charade is getting closer by the day. Capital is the next logical step by amending the 'net worth sweep' #FannieGate


Hopefully really imminent. That piece from October said new people were going to act fast. Lets see it!
They can immediately suspend dividends and go for full earnings retention. But they cannot kill the NWS completely and do away with the Srs. That may have to be part of a complete overhaul, warrants, Srs. and perhaps conversion of Jrs.