Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 4015586 times)

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12900 on: July 11, 2019, 06:50:24 AM »
while none of us moderates this thread, I would suggest that we should calm down.  MM has explained his method and while I for one dont really understand it, what I do understand is that he feels comfortable using it, and it works for him psychologically.

I for one use this thread to think through my ideas, which I do better when I write than just sit with a gin in my hand, and look for feedback to my ideas.  another valuable resource is your picking up on events and reporting that I miss. most of the news I read on this thread is new to me when I read it.

some feedback I disagree with, of course, and some I dont understand. and then there is Emily. but I dont think MM needs to defend TA on this thread.  as for his poker example, it is hard enough with the GSEs to understand what kind of hand you are playing from time to time, so let's all proceed with the humility that this investing situation requires of us

Thank you Chris. I guess it is wise to stop defending TA then. After all, people on this thread find it hard to understand. Let's use this thread to focus on the GSE events and fundamental analysis.
I wouldn't be able to do well either without watching people posting those event here. For example, I didn't know Bill Maloni is the whack job. I didn't know he was spreading rumors about the 5th court ruling coming on that Friday afternoon. Those are the type of events that turned me from very bullish to bearish.
I am muslceman. I have more muscle than brain!


investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12901 on: July 11, 2019, 06:51:11 AM »
The Hamish hume letter regarding conversion is surprising to me.   maybe he wants them to turn back on dividends and certain preferred classes could possibly trade > par?   or is he mainly concerned about new lawsuits from common holders slowing down the whole process if they get diluted too much?   
« Last Edit: July 11, 2019, 06:52:42 AM by investorG »

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12902 on: July 11, 2019, 06:56:12 AM »
That is just a summary. Here is the actual document.

the meat of Collins is in the APA claim IMO.  it's cleaner and more direct.   In addition, Calabria's change is an attempt to protect his job for a full term which makes sense.   

the pending Collins verdict is huge.  a loss, and we're at the mercy of the govt, price targets and goals will likely be cut for both preferred and common.   a win, and we have a real seat in negotiations.    guessing here, but that's likely why things are stalled, everyone is waiting for this.   I'm nervous for the outcome.   

Good luck, everyone.

If Trump is the law and order guy, so should his workforce like Calabria. His attempt to defend the constitutionality of FHFA could have side effects in the long run.
1. Let's say we lose Collins, and Calabria magically makes preferred whole. Later when he steps down, a Dem appointed FHFA director could have so much power that he could do another 3rd amendment. What could you do then?
2. If the above concern is real, then the current IPO would be even harder, because shareholders would ask that same question. They won't do it unless they feel protected.
3. The fact that Calabria needs to defend his job implies that this recap process may take way longer than what we thought, which is bearish for us.
I am muslceman. I have more muscle than brain!

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12903 on: July 11, 2019, 06:58:26 AM »
That is just a summary. Here is the actual document.

the meat of Collins is in the APA claim IMO.  it's cleaner and more direct.   In addition, Calabria's change is an attempt to protect his job for a full term which makes sense.   

the pending Collins verdict is huge.  a loss, and we're at the mercy of the govt, price targets and goals will likely be cut for both preferred and common.   a win, and we have a real seat in negotiations.    guessing here, but that's likely why things are stalled, everyone is waiting for this.   I'm nervous for the outcome.   

Good luck, everyone.

+1

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12904 on: July 11, 2019, 07:05:05 AM »
Fair, my comments were unnecessary and didn't add value.  Apologies.   This thread has been extremely beneficial to me. 

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12905 on: July 11, 2019, 07:05:13 AM »
The Hamish hume letter regarding conversion is surprising to me.   maybe he wants them to turn back on dividends and certain preferred classes could possibly trade > par?   or is he mainly concerned about new lawsuits from common holders slowing down the whole process if they get diluted too much?

conversion will require coercion, and Hume is against coercion.  why coercion? because treasury will want to eliminate the junior prefs and to do this it needs at least 2/3rds of each class to agree to convert into common.  this is a high threshold which is why I believe the conversion rate that will be on offer will be acceptable, but treasury won't want the remaining non-converters to have hold-up/nuisance value, so in connection with the conversion each holder will consent to amend the junior pref on the way into common that will trash the pref...which will force the remaining minority to convert as well.

now can treasury use this exit consent coercion to try to impose a harsh conversion rate?  sure, and this is what I think hume is concerned about.  but this is where big junior holders need to stand firm and in effect protect us little guys.

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12906 on: July 11, 2019, 07:08:30 AM »
That is just a summary. Here is the actual document.

the meat of Collins is in the APA claim IMO.  it's cleaner and more direct.   In addition, Calabria's change is an attempt to protect his job for a full term which makes sense.   

the pending Collins verdict is huge.  a loss, and we're at the mercy of the govt, price targets and goals will likely be cut for both preferred and common.   a win, and we have a real seat in negotiations.    guessing here, but that's likely why things are stalled, everyone is waiting for this.   I'm nervous for the outcome.   

Good luck, everyone.

This makes sense from Calabria's perspective but I think the negative way of looking at this is from a signaling perspective.  This seems to be a clear signal that Otting and Calabria (and through possible extension, Mnuchin) were not necessarily as coordinated as I initially thought. 

Part of why I've been ignored the noise of some of Calabria's comments is the simple thesis that these extremely calculated men in high visibility positions are not publicly commenting an a restructuring with massive execution risk without clear coordination and strategy behind the scenes. 

The amateurish about face on the constitutionality claim seems to contradict this thesis. 

The bullish way of looking at the change is simply to try to buy time on the release of the Tsy plan and Sr Pref amendment.  But if that's the case, it necessarily implies that the plan is inconsistent with a positive remedy from the en banc ruling...
« Last Edit: July 11, 2019, 07:10:28 AM by SnarkyPuppy »

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12907 on: July 11, 2019, 07:36:30 AM »
as a lawyer I find Calabria's move to be stupid and embarrassing.  but I also agree with IG that taking the position his office is constitutionally structured may help him/the agency/the recap down the road.  I also dont think he did this without treasury's concurrence, and treasury must have had its reasons for thinking this was a good idea.

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12908 on: July 11, 2019, 10:29:25 AM »
as a lawyer I find Calabria's move to be stupid and embarrassing.  but I also agree with IG that taking the position his office is constitutionally structured may help him/the agency/the recap down the road.  I also dont think he did this without treasury's concurrence, and treasury must have had its reasons for thinking this was a good idea.

Why the action by Otting then?  Under this theory, he either acted on his own or the plan has changed

DRValue

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12909 on: July 11, 2019, 12:03:10 PM »
:o :o
SnarkyPuppy, DRValue, you guys are just making fun of me right?

I'm only joking, but i did find it funny.   :D
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