Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3714644 times)

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10600 on: October 11, 2018, 05:40:49 AM »
Mnuchin literally just renewed his push for GSE reform post midterms 2 weeks ago. He reiterated that he wants to get them out of government control (not get rid of them) and he wants to get taxpayers off the hook of the current system. He tends to comment on the GSEs every Q or so and the message has been pretty consistent.

With the recent market turmoil and rates rising as they have been I think Mnuchin maybe forced to act sooner then he may have wanted as I think/bet housing is going to start to get hit. Home prices are starting to fall already on the coasts and homes are not moving nearly as fast as they used to otherwise as prices have not come down yet. It isnt simply that linear but rates going forward to have found a bottom and prices, ie the wealth effect will take a hit. Im not calling a top in the economy or recession necessarily but valuations of every asset are going to start heading down.

For time sake I hope this is addressed before Mnuchin has to worry about a housing related crash but 6-12-18 months from now housing prices are going to start coming down. Hopefully will provide a push in the right direction.
Later this month Treasury releases its semiannual currency report. We will see if Mnuchin has changed his stance re China as currency manipulator. Not too long ago he was squarely in the moderate camp looking for an amicable solution. He now appears to be aligning himself with the more radical side at the WH. Is he being pressured to get in line with the 'war on China'? Point being, relying on Mnuchin's original view on Fannie and Freddie may have become quicksand.


rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10601 on: October 11, 2018, 05:55:51 AM »
Mnuchin literally just renewed his push for GSE reform post midterms 2 weeks ago. He reiterated that he wants to get them out of government control (not get rid of them) and he wants to get taxpayers off the hook of the current system. He tends to comment on the GSEs every Q or so and the message has been pretty consistent.

With the recent market turmoil and rates rising as they have been I think Mnuchin maybe forced to act sooner then he may have wanted as I think/bet housing is going to start to get hit. Home prices are starting to fall already on the coasts and homes are not moving nearly as fast as they used to otherwise as prices have not come down yet. It isnt simply that linear but rates going forward to have found a bottom and prices, ie the wealth effect will take a hit. Im not calling a top in the economy or recession necessarily but valuations of every asset are going to start heading down.

For time sake I hope this is addressed before Mnuchin has to worry about a housing related crash but 6-12-18 months from now housing prices are going to start coming down. Hopefully will provide a push in the right direction.
Later this month Treasury releases its semiannual currency report. We will see if Mnuchin has changed his stance re China as currency manipulator. Not too long ago he was squarely in the moderate camp looking for an amicable solution. He now appears to be aligning himself with the more radical side at the WH. Is he being pressured to get in line with the 'war on China'? Point being, relying on Mnuchin's original view on Fannie and Freddie may have become quicksand.
Perhaps... Also, housing reform, given its domestic nature, may be more insulated from pressures than areas related to world supremacy. So maybe Mnuchin has not changed his stance. But this doesn't mean he never will as he seems to be caving under Robert lighthizer and Peter Navarro's pressure. Hopefully, Trump and Mnuchin are on the same wave re Fannie/Freddie.
« Last Edit: October 11, 2018, 05:59:09 AM by rros »

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10602 on: October 11, 2018, 07:37:23 AM »
Mnuchin literally just renewed his push for GSE reform post midterms 2 weeks ago. He reiterated that he wants to get them out of government control (not get rid of them) and he wants to get taxpayers off the hook of the current system. He tends to comment on the GSEs every Q or so and the message has been pretty consistent.

With the recent market turmoil and rates rising as they have been I think Mnuchin maybe forced to act sooner then he may have wanted as I think/bet housing is going to start to get hit. Home prices are starting to fall already on the coasts and homes are not moving nearly as fast as they used to otherwise as prices have not come down yet. It isnt simply that linear but rates going forward to have found a bottom and prices, ie the wealth effect will take a hit. Im not calling a top in the economy or recession necessarily but valuations of every asset are going to start heading down.

For time sake I hope this is addressed before Mnuchin has to worry about a housing related crash but 6-12-18 months from now housing prices are going to start coming down. Hopefully will provide a push in the right direction.
Later this month Treasury releases its semiannual currency report. We will see if Mnuchin has changed his stance re China as currency manipulator. Not too long ago he was squarely in the moderate camp looking for an amicable solution. He now appears to be aligning himself with the more radical side at the WH. Is he being pressured to get in line with the 'war on China'? Point being, relying on Mnuchin's original view on Fannie and Freddie may have become quicksand.

'renewed his push' ?  more like 'dribbled out his stale rhetoric'.

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10603 on: October 11, 2018, 07:48:11 AM »
That's definitely one way of looking at it. But keep in mind the moderator simply asked him whats next on his agenda for the upcoming year and he brought up the GSEs voluntarily on his own and did his little 1 minute blurb about it. Combine last weeks interview with Phillips saying a week prior that housing reform is next up on Mnuchins docket. Who knows if we are being honest but it does seem they are sticking their neck out to reiterate housing reform is a priority when they really dont need to.


Mnuchin literally just renewed his push for GSE reform post midterms 2 weeks ago. He reiterated that he wants to get them out of government control (not get rid of them) and he wants to get taxpayers off the hook of the current system. He tends to comment on the GSEs every Q or so and the message has been pretty consistent.

With the recent market turmoil and rates rising as they have been I think Mnuchin maybe forced to act sooner then he may have wanted as I think/bet housing is going to start to get hit. Home prices are starting to fall already on the coasts and homes are not moving nearly as fast as they used to otherwise as prices have not come down yet. It isnt simply that linear but rates going forward to have found a bottom and prices, ie the wealth effect will take a hit. Im not calling a top in the economy or recession necessarily but valuations of every asset are going to start heading down.

For time sake I hope this is addressed before Mnuchin has to worry about a housing related crash but 6-12-18 months from now housing prices are going to start coming down. Hopefully will provide a push in the right direction.
Later this month Treasury releases its semiannual currency report. We will see if Mnuchin has changed his stance re China as currency manipulator. Not too long ago he was squarely in the moderate camp looking for an amicable solution. He now appears to be aligning himself with the more radical side at the WH. Is he being pressured to get in line with the 'war on China'? Point being, relying on Mnuchin's original view on Fannie and Freddie may have become quicksand.

'renewed his push' ?  more like 'dribbled out his stale rhetoric'.

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10604 on: October 11, 2018, 07:50:17 AM »
Mnuchin literally just renewed his push for GSE reform post midterms 2 weeks ago. He reiterated that he wants to get them out of government control (not get rid of them) and he wants to get taxpayers off the hook of the current system. He tends to comment on the GSEs every Q or so and the message has been pretty consistent.

With the recent market turmoil and rates rising as they have been I think Mnuchin maybe forced to act sooner then he may have wanted as I think/bet housing is going to start to get hit. Home prices are starting to fall already on the coasts and homes are not moving nearly as fast as they used to otherwise as prices have not come down yet. It isnt simply that linear but rates going forward to have found a bottom and prices, ie the wealth effect will take a hit. Im not calling a top in the economy or recession necessarily but valuations of every asset are going to start heading down.

For time sake I hope this is addressed before Mnuchin has to worry about a housing related crash but 6-12-18 months from now housing prices are going to start coming down. Hopefully will provide a push in the right direction.
Later this month Treasury releases its semiannual currency report. We will see if Mnuchin has changed his stance re China as currency manipulator. Not too long ago he was squarely in the moderate camp looking for an amicable solution. He now appears to be aligning himself with the more radical side at the WH. Is he being pressured to get in line with the 'war on China'? Point being, relying on Mnuchin's original view on Fannie and Freddie may have become quicksand.

'renewed his push' ?  more like 'dribbled out his stale rhetoric'.

Thats what I am referring to. He said get them out of government control 2 years ago now. Of everything that could be pushing him towards speeding up the process  the housing market sure wasnt one them. Will have to see if that changes. Redfins CEOs comments recently are concerning.

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10605 on: October 11, 2018, 08:38:58 AM »
Mnuchin literally just renewed his push for GSE reform post midterms 2 weeks ago. He reiterated that he wants to get them out of government control (not get rid of them) and he wants to get taxpayers off the hook of the current system. He tends to comment on the GSEs every Q or so and the message has been pretty consistent.

With the recent market turmoil and rates rising as they have been I think Mnuchin maybe forced to act sooner then he may have wanted as I think/bet housing is going to start to get hit. Home prices are starting to fall already on the coasts and homes are not moving nearly as fast as they used to otherwise as prices have not come down yet. It isnt simply that linear but rates going forward to have found a bottom and prices, ie the wealth effect will take a hit. Im not calling a top in the economy or recession necessarily but valuations of every asset are going to start heading down.

For time sake I hope this is addressed before Mnuchin has to worry about a housing related crash but 6-12-18 months from now housing prices are going to start coming down. Hopefully will provide a push in the right direction.
Later this month Treasury releases its semiannual currency report. We will see if Mnuchin has changed his stance re China as currency manipulator. Not too long ago he was squarely in the moderate camp looking for an amicable solution. He now appears to be aligning himself with the more radical side at the WH. Is he being pressured to get in line with the 'war on China'? Point being, relying on Mnuchin's original view on Fannie and Freddie may have become quicksand.

'renewed his push' ?  more like 'dribbled out his stale rhetoric'.

Thats what I am referring to. He said get them out of government control 2 years ago now. Of everything that could be pushing him towards speeding up the process  the housing market sure wasnt one them. Will have to see if that changes. Redfins CEOs comments recently are concerning.
Which begs the question... what is really in the Fed/Treasury's mind?

The Fed raised interest rates to 6% in 1929 amid a softening economy. The following year the Tariff Act of 1930 (Smoot–Hawley Tariff) was signed into law raising tariffs on over 20,000 imported goods to protect american workers (specially farmers) and Treasury under Andrew Mellon was hell bent on cleaning up rotten speculative investments. They were in a collision course. And they never saw the iceberg.

We can't ignore history with Jerome Powell at the Fed's helm and a Trump presidency. Just like Mnuchin may have become quicksand we can't rely on this administration to act rationally.

I also thought at the beginning of the year a bad market for housing would push for action. Take a look at cut, wood, nvr, len, dhi, tol, bzh, phm, shw stock after stock related to housing (materials, remodeling, real estate, etc.) have all dropped dramatically and here we are. I do not think the housing market or markets in general are of any relevance to this Administration. They have a different agenda which leaves us not knowing where we or them stand.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10606 on: October 11, 2018, 01:57:53 PM »
Judge Brown (Perry dissent)

https://twitter.com/lawrencehurley/status/1050488659097636867
Retired DC Circuit Judge Janice Rogers Brown apparently in the mix to be attorney general.....
A wise husband, a wise father, asks God for help. Don't be a prideful, self-reliant fool. "Father, lead me, 'cause I can't do this alone..." Lead Me by Sanctus Real: https://www.youtube.com/watch?v=yLr6G8Xy5uc

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10607 on: October 11, 2018, 03:52:09 PM »
How is that going to play out if she is appointed? She wrote a scathing opinion against the nws.. How in the world will she defend it?

DocSnowball

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10608 on: October 13, 2018, 03:17:42 AM »
https://www.wsj.com/articles/fannie-maes-comeback-captain-reflects-on-his-tenure-1539403201?emailToken=bc619e7a2f6b0b34cd287779374a2f5ap3TaK6/u+bg0eHMjfaBeeN8L+agktGTgWeqObmrJRmkiKfMUjMTnGrCHbX0x86N6VjmyKm5sj3ZBC9cwj9bxEwUEIPi5MV660D8ne88Fzzo%3D&reflink=article_copyURL_share


WSJ: If the Trea­sury sec­re­tary comes to you and says, “Tim, what do we do with Fan­nie and Fred­die,” what ad­vice would you give him?

Mr. May­opou­los: What I’d say is that we should sep­a­rate what kind of hous­ing fi­nance sys­tem you would want to cre­ate from the two en­ti­ties that are cur­rently Fan­nie and Fred­die. The po­lit­i­cal as­pect of just talk­ing about Fan­nie and Fred­die com­pli­cates the de­bate. One of the things that we col­lec­tively as a coun­try un­der­ap-pre­ci­ate is how suc­cess­ful our hous­ing-fi­nance sys­tem re­ally is. The sys­tem we have very ef­fi­ciently at­tracts cap­i­tal to the United States and de­ploys it in a way that is re­ally the envy of a lot of other coun­tries.

The other thing I would say to the Trea­sury sec­re­tary is that while hous­ing-fi­nance re­form is im­por­tant, the real cri­sis of hous­ing isn’t hous­ing-fi­nance re­form—it’s re­ally af­ford­able hous­ing. There’s re­ally just not enough sup­ply of de­cent, af­ford­able hous­ing avail­able to most Amer­i­cans.




Cigarbutt

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10609 on: October 13, 2018, 08:45:28 AM »
https://www.wsj.com/articles/fannie-maes-comeback-captain-reflects-on-his-tenure-1539403201?emailToken=bc619e7a2f6b0b34cd287779374a2f5ap3TaK6/u+bg0eHMjfaBeeN8L+agktGTgWeqObmrJRmkiKfMUjMTnGrCHbX0x86N6VjmyKm5sj3ZBC9cwj9bxEwUEIPi5MV660D8ne88Fzzo%3D&reflink=article_copyURL_share


WSJ: If the Trea­sury sec­re­tary comes to you and says, “Tim, what do we do with Fan­nie and Fred­die,” what ad­vice would you give him?

Mr. May­opou­los: What I’d say is that we should sep­a­rate what kind of hous­ing fi­nance sys­tem you would want to cre­ate from the two en­ti­ties that are cur­rently Fan­nie and Fred­die. The po­lit­i­cal as­pect of just talk­ing about Fan­nie and Fred­die com­pli­cates the de­bate. One of the things that we col­lec­tively as a coun­try un­der­ap-pre­ci­ate is how suc­cess­ful our hous­ing-fi­nance sys­tem re­ally is. The sys­tem we have very ef­fi­ciently at­tracts cap­i­tal to the United States and de­ploys it in a way that is re­ally the envy of a lot of other coun­tries.

The other thing I would say to the Trea­sury sec­re­tary is that while hous­ing-fi­nance re­form is im­por­tant, the real cri­sis of hous­ing isn’t hous­ing-fi­nance re­form—it’s re­ally af­ford­able hous­ing. There’s re­ally just not enough sup­ply of de­cent, af­ford­able hous­ing avail­able to most Amer­i­cans.


Hi DocSnowball,

I have followed this thread intermittently and some aspects are fascinating.
Here and now, just want to make a few comments about the bolded part above.

Context:
I've always found US public involvement in housing finance and private home ownership to be highly unusual. Opinion: This is work in progress through Congress but most of the involvement is a relic of reforms from the Great Depression and should be curtailed. The marvelling and potentially noble aspects have been mired in a growing web of moral hazard. I thought the following to be useful for historical perspective:
https://files.stlouisfed.org/files/htdocs/publications/review/94/07/Structure_Jul_Aug1994.pdf
https://www.huduser.gov/publications/pdf/us_evolution.pdf
https://www.mercatus.org/system/files/House_of_Cards_March_2012.pdf

-Comments about the bolded part of your post

The idea is to maintain cheap financing. Most of the financial backing is domestic but, since the early 2000's, a significant part of the financial backing comes from countries that show a positive current account balance and with whom trade skirmishes are forming. So, in substance, the US buys cheap goods and then recycle USD through the capital account in order to maintain cheap affordable housing. :o

Here are some numbers (not audited!) which show the percentage of the current account balance that has been "financed" through net changes in foreign holdings of agency MBS.

2004  4,3%          2009  (5,5%)      2014  3,0%
2005  11,8%        2010  (9,0%)      2015  18,2%
2006  15,1%        2011  0,1%         2016  20,7%
2007  25,9%        2012  0,8%         2017  12,8%
2008  29,8%        2013  (17,4%)

Reference:
https://www.ginniemae.gov/newsroom/publications/Documents/foreign_ownership_mbs.pdf

All I'm saying is that the unsustainable trade imbalance will/should be dealt with and that adjustments will need to be made of both side of the equations and that the outcome with agencies may have to take into account less efficient entry of foreign capital.