Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 4975875 times)

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15950 on: September 19, 2020, 05:45:55 AM »
A lot of home owners are unable to pay their mortgage now. Also increasing number of renters unable to pay rent. I wonder how this may affect FnF since they guarantee the mortgages?

This is why the FnF has issued the forbearence guidedance, new proposed fee, etc. Has been dicussed in detail here in this thread over the last couple of months.


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15951 on: September 19, 2020, 06:57:50 AM »
what happens if SCOTUS decides Collins with 8 justices and they split 4-4?

https://twitter.com/RuleofLawGuy1/status/1307316780302557184?s=20

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15952 on: September 19, 2020, 08:46:00 AM »
what happens if SCOTUS decides Collins with 8 justices and they split 4-4?

https://twitter.com/RuleofLawGuy1/status/1307316780302557184?s=20

Thanks cherzeca.

The logic would then follow that if RBG was a vote against Ps then any trump nominee should be a vote for. Senate would essentially be voting in someone who would on paper go against the own administration/Treasury/Mnuchin in this case.

Double the reason to try to move to a settlement. Maybe/hopefully this was the plan anway and none of this matters although its quite ironic.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15953 on: September 19, 2020, 10:57:10 AM »
what happens if SCOTUS decides Collins with 8 justices and they split 4-4?

https://twitter.com/RuleofLawGuy1/status/1307316780302557184?s=20

This is beautiful.
"Way maker, miracle worker, promise keeper..."  God is a promise keeper. You can rest in the hope and assurance that He is true to His word.  But it is also a warning that He will keep His promises to those that choose a life of unrepentant sin. https://www.youtube.com/watch?v=XCpbeVFgs4E

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15954 on: September 22, 2020, 10:36:17 AM »
https://www.fhfa.gov/AboutUs/Reports/ReportDocuments/FHFA_StrategicPlan_9222020.pdf

Not a lot of meat for shareholders but pretty clear cut FHFA is going to end the conservatorship. Attention is paid to the fact 2021 is the start of the framework for ending the conservatorship. Unlikely a consent decree is enacted before the end of 2020 but even so still time before inauguration and if/when Calabria forced to leave.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15955 on: September 24, 2020, 07:32:34 AM »
https://twitter.com/ACGAnalytics/status/1309135699900276740

https://files.acg-analytics.com/wl/?id=shIIixOKejR2zEc8DlZsZiDRgmhHAutt

80%+ chance PSPA by inauguration day (if Trump loses)*

95% chance of SCOTUS unwinding NWS (obviously, if no settlement prior to their decision)

This equates to a 1% chance that neither happen: (1 - 0.95) x (1 - 0.20) = 0.01.  Or, in other words, a 99% chance we either (A) win SCOTUS or (B) PSPA by inauguration.

*Note: the 80% PSPA chance was from a few months ago during a call ACG opened to public, but they confirmed this week when I asked that % still valid.

In other words, my take-away, pricing of junior prefs represent a severe discount in the market that doesn't represent what is actually happening behind the scenes.
« Last Edit: September 24, 2020, 07:39:01 AM by Luke 5:32 »
"Way maker, miracle worker, promise keeper..."  God is a promise keeper. You can rest in the hope and assurance that He is true to His word.  But it is also a warning that He will keep His promises to those that choose a life of unrepentant sin. https://www.youtube.com/watch?v=XCpbeVFgs4E

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15956 on: September 24, 2020, 01:00:38 PM »
Sometimes the simple explanation is the best explanation. 

At this point in the history of these companies, who the hell else would be buying these shares? 

-You either have purchased or passed on the story by now. 
-There are no natural incremental buyers who care. 
-Combine this with Mike Green's thesis on passive flows taking from discretionary managers & the fact that these trade OTC and are excluded from ETFs/indexes.
-Add in perceived legal risk / election risk / timing risk / political risk.

The discount seems understandable if you aren't one of the few psychopaths who have followed this for years.   

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15957 on: September 24, 2020, 05:31:50 PM »
The discount seems understandable if you aren't one of the few psychopaths who have followed this for years.

LOL, I agree.  I made a similar point to somebody earlier today.  I understand why they trade where they do, but those prices don't represent the actual risk/reward in the trade.  Big difference.
"Way maker, miracle worker, promise keeper..."  God is a promise keeper. You can rest in the hope and assurance that He is true to His word.  But it is also a warning that He will keep His promises to those that choose a life of unrepentant sin. https://www.youtube.com/watch?v=XCpbeVFgs4E

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15958 on: September 24, 2020, 05:54:12 PM »
The discount seems understandable if you aren't one of the few psychopaths who have followed this for years.

LOL, I agree.  I made a similar point to somebody earlier today.  I understand why they trade where they do, but those prices don't represent the actual risk/reward in the trade.  Big difference.

GSEs are in a lot of "too hard" piles.  that creates opportunity/risk

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #15959 on: September 25, 2020, 05:04:41 AM »
https://twitter.com/ACGAnalytics/status/1309135699900276740

https://files.acg-analytics.com/wl/?id=shIIixOKejR2zEc8DlZsZiDRgmhHAutt

80%+ chance PSPA by inauguration day (if Trump loses)*

95% chance of SCOTUS unwinding NWS (obviously, if no settlement prior to their decision)

This equates to a 1% chance that neither happen: (1 - 0.95) x (1 - 0.20) = 0.01.  Or, in other words, a 99% chance we either (A) win SCOTUS or (B) PSPA by inauguration.

*Note: the 80% PSPA chance was from a few months ago during a call ACG opened to public, but they confirmed this week when I asked that % still valid.

In other words, my take-away, pricing of junior prefs represent a severe discount in the market that doesn't represent what is actually happening behind the scenes.

Open question for the floor. Why isnt there a 100% chance the PSPA isnt done by inauguration day? If Trump is out, Mnuchin is out and Im not so sure I want a Biden appointed Treasury Secretary or underling negotiating with Calabria. Secondly if Trump loses what do either Calabria as an independent regular or lame duck Mnuchin have to lose negotiating the PSPA in the weeks after the election.

I cant think of a more common sense assumption regarding the PSPA if Trump loses and why that chance isnt 100%. Unless they want to dump the chance of a SC loss on a new administration.