FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[investorG]

the Mba cohort is pushing for legislative reform to occur before recapitalization.   

does this view hold water?  or is it better to get going on the recap in December as a catalyst / spark for legislative reform (my view)?

in theory, the potential for action would open after the congress recesses for the year in December.

mnuchin appears conservative on the matter to date.  but the moelis / paulson / schwarzman group is quite close to trump.

Mnuchin is on record saying any serious talk of reform requires companies to have capital first. But this was in the early days, before radio silence.

ok, thanks.  Mnuchin has accomplished very little in the first two years (most give tax reform credit to Brady, cohn, mcconnell, trump, etc.) and so hopefully his pencil is sharpened for this. obviously he's a smart man and few know more than him on this matter. 

there's also a chance they need to try to keep the housing market in decent shape, rather than bank-pleasing tinkering, to offset headwinds elsewhere.

[cherzeca]

Chris, can you expand please? Not positive that the WSJ officially confirms the admin route? I could not read it.

whenever I read an article that admin reform=reducing GSEs' footprint (using that euphemism), I hear the MBA whispering.  any sound article on administrative reform would address capital, the senior preferred, monetizing (or not) treasury's warrants.

[orthopa]

I know this could have been said before but it looks like we are getting closer and closer to action. I think its pretty clear admin action will be what gets the ball rolling and I bet its the new FHFA director that does it soon after he/she is announced. As I said before I think the admin likes to float ideas to see reaction and there really has been no big push back other then MBA and but their stance has soften significantly. That being said prices have moved very little so I am adding some more preferred today.

Anyone have any prognostication on conversion. I know Luke asked this before and Im not looking for an prediction on exact conversion ratio but how it may be proceed. My thought it that is has to based off of par and as cherzeca says par is the goal and IMO non negotiable since the push behind Moelis are big preferred owners. Maybe a conversion based on eps taking into account warrants monetizing but that takes years.  And then you have to take into account dividend as if par is expected dividend come into play due to/with that.

Just trying to handicapped possibly moving to some common as market once known will price it instantly. Probably not worth wasting time on with too many unknown at this point.

[rros]

But one can also say Mnuchin has accomplished more than any of those fine gents. He masterfully dodged the Trump bullet and kept his seat at Treasury. A different take: he has shown extreme loyalty. Which may mean it is Trump who really matters now.

[cherzeca]

you may recall that Paulson was Trump's transition advisor on housing finance.  either that was a head fake or Trump has incorporated Paulson's view, after his own fashion. 

getting a deal done with democrats will earn trump kudos.  any administrative deal that makes sense will likely get maxine waters support...getting a deal done doesn't have to be a passed bill.  so trump may see that timing is right for admin movement.

[orthopa]

I tried to find it back in this thread but it has become so long. Where do we stand now in Sweeney's court? Haven't heard much out of that court in a while.

[allnatural]

I tried to find it back in this thread but it has become so long. Where do we stand now in Sweeney's court? Haven't heard much out of that court in a while.

Briefing will be completed in January I believe. Assuming there is oral arguments, Sweeney should decide by summer 2019.

[allnatural]

Did you miss when the same judge who originally ruled against shareholders reversed his ruling and ruled in favor of shareholders by throwing out the governments motion to dismiss? This was the same claim that was REMANDED back to the lower court in the same Feb 2017 ruling you reference.

I tried to find it back in this thread but it has become so long. Where do we stand now in Sweeney's court? Haven't heard much out of that court in a while.

Honest question - after the ruling from Feb 2017 - do we really expect the courts to do the right thing in this case ever? I've personally lost a lot of faith that there is a path to justice in the justice system.

[rros]

C'mn people... my 11 year-old boy will inherit this claim and will continue to try to make as miserable as possible anyone who sits at the FHFA and Treasury. And he could do it for many more decades without me. Don't let them off the hook!

[Midas79]

Any thoughts on the Fifth Circuit having granted an en banc hearing in the Collins case?

http://www.glenbradford.com/wp-content/uploads/2018/11/17-20364-00514719656.pdf

I wonder how much of the oral argument will focus on plaintiffs arguing that the NWS should be overturned versus defendants arguing that the FHFA is constitutionally structured. At least the plaintiffs get another chance to pound on the points made in Willett's dissent.

The constitutionality part seems mostly moot to us shareholders because Trump will have appointed a new FHFA director by the time the oral arguments even happen.