My optimism is starting to wain with speed of things. All it took was to remember the captial rule was supposed to be published for comment by the end of 2019 and here we are ~1 year since Calabria made that comment.
Calabria actually did address this in the hearing. He said the rule was supposed to be out in March and was delayed by the pandemic. In a late February interview he said that the rule would be released "in the coming weeks, months" so while he did cover his bases there, it does sound like he was ready to release it earlier.
To be fair, that is still 3 months after the end of 2019, and the delays are certainly frustrating. At this point, you either trust the administration to get things done in the lame duck period or you don't. And if you don't, it probably isn't worth holding. I think the shares will take a moderate to large short-term dip if Biden wins, but will have a similar-sized rally if Trump wins, so I'm just going to hold through the election.
Edit: this doesn't take into account the lopsidedness of Biden and Trump's respective chances of winning, but if there's anything I learned from the 2016 presidential election it's that I have become very hesitant to ever give a major-party presidential candidate a less than 45% chance of winning no matter what the polls say.
I should clarify that my optimism decreasing is more so in the speed of things happening, not so much the end game. I think at the end of this jr preferred gets par and I’m stubborn enough to hold till the end. Maybe its the 7 years of waiting since I started accumulating a position wearing on me.
Its hard to figure out if Calabria is pandering to these ignorant bought for politician with their questions or really means what he says. That’s exactly why a timeline some have discussed with unilateral (non election determined) action by the end of the year is becoming more doubtful. Calabria said he would begin discussions with Mnuchin about the NWS in May of 2019. There was the Sept 2019 amendment but the Treasurys liquidation preference was increased along with capital retention. That being said Calabria and Mnuchin have been discussing an amendment for 16 months! Sheesh.
In prepared speeches we have been told the time to build capital is now probably 6 times. We have been told the time to act is now 3-4 times. A bright spot was the firm capital rule comment period timeline. Maybe its just from being bludgeoned into submission by disappointment and missed guidelines for a year and a half (4 years including mnuchins comments day after election) but I don’t see a reason to be optimistic yet timeline wise. If Trump wins and the case is argued in front of the SC is there not an expectation that this will not come down to the days before a ruling if at all for a settlement? If we remember the en banc decision conveniently came the day after the treasury plan after being delayed for months. Maybe its coincidence and of no significance or maybe there is a lot of higher level stuff going on that "they" will take down to the wire that us peons are not privy too.
That being said when this is all said and done count me out on the next heavily government involved investment. The discount that the preferred may have traded with at any point in time due to government involvement, delay, court etc etc FWIW is/was highly appropriate and warranted.
