Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3233353 times)

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11920 on: March 13, 2019, 10:57:42 PM »
I see. So let me ask you this. Do you think FnF will be recapitalized and released from conservatorship?

Yes I do, but I have been wrong over and over on fundamentals and I don't place much value on my ability to do fundamental analysis anymore. But as other members pointed out, recap and release may require congressional approval if they want to find $150 bn. The alternative is to just let these companies retain earnings. My guess is that by 3/31, Calabria will announce a plan to retain earnings, but increase senior preferred liquidation value by the same amount. Then nothing will happen for a few months. Then Collins ruling came out, and it will be either big win or big loss for investors.
Before the Lamberth ruling, there was clear technical sign of topping, though Perry ruling came out of nowhere. So there are definitely people who know or smart enough to guess out what's gonna happen, and act in advance.
« Last Edit: March 13, 2019, 11:08:40 PM by muscleman »
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muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11921 on: March 13, 2019, 11:11:33 PM »
Does anyone know any news today? FNMAS and FMCKJ both had a quick spike up of 6-7% in the middle of the day, though they both closed near the low.
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orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11922 on: March 14, 2019, 08:53:29 AM »
Its my understanding McConnell may move forward with the Senate nomination of Calabria today.

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11923 on: March 14, 2019, 10:35:48 AM »
Its my understanding McConnell may move forward with the Senate nomination of Calabria today.

Thank you! When will we know for sure?
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cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11924 on: March 14, 2019, 11:52:07 AM »
Its my understanding McConnell may move forward with the Senate nomination of Calabria today.

it's been calendared for awhile but I see no movement

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11925 on: March 14, 2019, 12:49:15 PM »
who has more political risk right now, WFC or GSEs? extra credit if you show your work

so my point here is that all banks have some political risk (which is why they spend so much on lobbying), and Wells Fargo has a huge amount of political risk....and WFC is going to chug along just fine (though its execs may get bitch slapped)

just thinking if GSEs are along this same continuum of political risk or just in a qualitatively worse position. I ask this now, assuming that the wind down the GSE movement is dead.

Ahab

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11926 on: March 14, 2019, 01:32:14 PM »
I would argue that the GSEs have far more near-term political risk as an investment than the big banks. However, assuming a recap occurs, I believe the opposite will become true. Every couple of years banks such as WFC are involved in some sort scandal or untoward activity. LIBOR rigging, banking for the cartels, and opening up accounts without consumers' knowledge are the kind of improprieties that end up on CNN, HuffPo, etc... With Fannie & Freddie by contrast, most Americans don't really know what they do or have emotionally intense opinions about them. Thus, in the long run, I envision Fannie and Freddie having less political risk than say WFC.
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cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11927 on: March 14, 2019, 01:59:41 PM »
@ahab

Fair enough. Now for the GSEs in the short term does your thinking change if you consider that for the next 5 years the fhfa Director is someone who has made clear, and letís say reiterates, that the NWS is illegal?

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11928 on: March 14, 2019, 02:28:16 PM »
Calabria not on today's closure.  :(
Is there any limitation on how many people can be in a closure? I know there are lots of judges to be confirmed. Can't they put everyone on closure today?
« Last Edit: March 14, 2019, 04:57:40 PM by muscleman »
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Ahab

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #11929 on: March 14, 2019, 02:31:11 PM »
@cherzeca
These facts certainly color my thinking and I see good reasons for optimism in the administration's approach. Although, in regards to Calabria's confirmation and the start of the recapitalization process, it's not over until the fat lady sings. I think that's why the market refuses to budge too much on the preferred share prices. We as shareholders have been hoping for years to wake up one day to a decisive change (legal or administrative) in the status of these entities. Until that day comes, risk and uncertainty will endure in hearty quantities.
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