Luke 532 Posted November 7, 2019 Share Posted November 7, 2019 Freddie Mac retains McKinsey & Company to consult on capital management https://business.financialpost.com/pmn/business-pmn/freddie-mac-retains-mckinsey-company-to-consult-on-capital-management Link to comment Share on other sites More sharing options...
orthopa Posted November 7, 2019 Share Posted November 7, 2019 Freddie Mac retains McKinsey & Company to consult on capital management https://business.financialpost.com/pmn/business-pmn/freddie-mac-retains-mckinsey-company-to-consult-on-capital-management 4 month engagement so plan/suggestion should be done by April. Not sure when this hits the market but seem like a majority of our fate price wise will be known then. Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted November 7, 2019 Share Posted November 7, 2019 Another alternative (idea stolen from a twitter thread) - SPS reduced by JPS litigation remedy bringing SPS down to $70bn - $70bn SPS converted to common + warrants exercised - UST new common stake sold to the market in a secondary Two questions - does bullet point 2 not work because it would bring UST ownership >80% temporarily? - under this method could current common shareholders receive the ability to do a rights offering allowing ability to not be diluted by the governments shares? Link to comment Share on other sites More sharing options...
Sunrider Posted November 7, 2019 Share Posted November 7, 2019 Freddie Mac retains McKinsey & Company to consult on capital management https://business.financialpost.com/pmn/business-pmn/freddie-mac-retains-mckinsey-company-to-consult-on-capital-management 4 month engagement so plan/suggestion should be done by April. Not sure when this hits the market but seem like a majority of our fate price wise will be known then. Oh boy, nearly the last company one might want to pick for this sort of work ... unless of course it's just to stamp the name on pre-determined output ... Link to comment Share on other sites More sharing options...
allnatural Posted November 7, 2019 Share Posted November 7, 2019 I never understood the notion that the government would try to monetize a portion of their senior pfds. If i'm their financial advisory i am telling them you can either: a) retire the seniors in full and maximize the warrants via monetization. this would be most market / shareholder friendly and path of least resistance + builds some good will. or b) you can attempt to monetize some of the seniors by converting them to common, but that would add dilution, and lower the value of your warrants ultimately... so net net you are probably receiving the same $ proceeds.. and as a bonus there will be a lot of angry shareholders if you go down this path that may frustrate the efforts. bottom line a monetizing a portion of snr pfds lowers ur warrant value. you are taking from 1 pocket and putting in another and is a path of more resistance for no reason. Another alternative (idea stolen from a twitter thread) - SPS reduced by JPS litigation remedy bringing SPS down to $70bn - $70bn SPS converted to common + warrants exercised - UST new common stake sold to the market in a secondary Two questions - does bullet point 2 not work because it would bring UST ownership >80% temporarily? - under this method could current common shareholders receive the ability to do a rights offering allowing ability to not be diluted by the governments shares? Link to comment Share on other sites More sharing options...
Guest cherzeca Posted November 7, 2019 Share Posted November 7, 2019 it may just me but this McKinsey hire is bupkis. capital management not capital structuring or capital raising. nothing to see here Link to comment Share on other sites More sharing options...
orthopa Posted November 8, 2019 Share Posted November 8, 2019 it may just me but this McKinsey hire is bupkis. capital management not capital structuring or capital raising. nothing to see here I think your right. Not related to recapping it seems. False alarm. FHFA has said they will get their adviser first. Link to comment Share on other sites More sharing options...
Luke 532 Posted November 8, 2019 Share Posted November 8, 2019 Can't add attachments for some reason but Lamberth had this to say, according to Peter A. Chapman... Judge Lamberth released his opinion this afternoon and entered an order saying Treasury must produce the documents Fairholm's requested (or produce a privilege log identifying the documents it won't produce and the reasons why). Link to comment Share on other sites More sharing options...
Luke 532 Posted November 8, 2019 Share Posted November 8, 2019 Can't add attachments for some reason but Lamberth had this to say, according to Peter A. Chapman... Judge Lamberth released his opinion this afternoon and entered an order saying Treasury must produce the documents Fairholm's requested (or produce a privilege log identifying the documents it won't produce and the reasons why). "To be frank, Treasury's Memorandum of Points and Authorities in Opposition to Plaintiffs' Motion to Compel Third-Party Discovery leaves the Court with more questions than answers." "Treasury also has the resources to complete the requested production, and the Court will not entertain the preposterous notion that an agency as large as Treasury lacks the manpower to complete this request." Link to comment Share on other sites More sharing options...
DRValue Posted November 8, 2019 Share Posted November 8, 2019 Why doesn't lamberth give a required by date and what is a 'timely' period? Link to comment Share on other sites More sharing options...
james22 Posted November 11, 2019 Share Posted November 11, 2019 He argues that the government wants total control over the recapitalization and release of the GSEs and over their operations “for now and the future.” He also said that the courts will be the ones to provide “meaningful gains” for shareholders in the fight against the net worth sweep. Bove also believes that some assumptions many shareholders are making are just wrong. For example, he doesn't expect that the government will ever concede that the senior preferred shares and their dividends have been paid. He noted that during the Senate hearings, it became clear that the Treasury secretary believes the U.S. government is a creditor of Fannie Mae and Freddie Mac even though there is no outstanding debt. In Bove's view, it looks like Secretary Steven Mnuchin sees the senior preferred shares owned by the government as debt rather than preferred equity. He also believes the government will "take a hefty fee for providing any guarantees to Fannie Mae and Freddie Mac." https://www.valuewalk.com/2019/11/fannie-mae-freddie-mac-senior-preferred-stock/ Link to comment Share on other sites More sharing options...
investorG Posted November 12, 2019 Share Posted November 12, 2019 The securities prices remain entrenched in their five month (so far) long bear market. I wonder what muscleman is currently seeing in the charts, he's had the hot hand of late. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted November 12, 2019 Share Posted November 12, 2019 some thoughts: 1. I used to disagree with bove. now I dont even understand him. 2. so trump is removed from office. that gives us pence, who is a fan of calabria. no sweat until 1/2021. but...trump won't be removed from office and 5 will get you 10 that impeachment boomerangs on Ds and he is reelected....especially when HRC is nominated on tenth vote in D convention. 3. mortgage interest rates and unemployment are very low....perfect for GSEs...provides runway until the capital raises are done in 18 months. 4. notice all of the recent talk about winding GSEs down? me neither. 5. treasury APA cert petition completely undercut by calabria public admissions that conservator has a duty/mandate to rehabilitate. Link to comment Share on other sites More sharing options...
rros Posted November 13, 2019 Share Posted November 13, 2019 Is the Alex J. Pollock that has just resigned from CME Board to accept a new role at the US Treasury the same as our little old friend? Link to comment Share on other sites More sharing options...
Luke 532 Posted November 13, 2019 Share Posted November 13, 2019 Good to watch regarding Pollock from September 14, 2019: https://www.c-span.org/video/?464204-3/washington-journal-alex-discusses-potential-fannie-mae-freddie-mac-overhaul And this from October 25, 2019: https://www.realclearmarkets.com/articles/2019/10/25/eliminating_fannie__freddies_competitive_advantages_by_administrative_action_103956.html 10% moment from early 2018: https://www.rstreet.org/2018/03/06/fannie-has-reached-the-10-moment-after-all/ Link to comment Share on other sites More sharing options...
Guest cherzeca Posted November 13, 2019 Share Posted November 13, 2019 financial data and analysis position at treasury. good for pollock. dont see that he will have time or remit to talk more about GSEs Link to comment Share on other sites More sharing options...
rros Posted November 13, 2019 Share Posted November 13, 2019 financial data and analysis position at treasury. good for pollock. dont see that he will have time or remit to talk more about GSEs Keep your friends close and your enemies closer lol. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted November 13, 2019 Share Posted November 13, 2019 financial data and analysis position at treasury. good for pollock. dont see that he will have time or remit to talk more about GSEs Keep your friends close and your enemies closer lol. yup. fhfa is driving the train. lets see who they select as financial advisor. Link to comment Share on other sites More sharing options...
Luke 532 Posted November 13, 2019 Share Posted November 13, 2019 Calabria moments ago. Sounds like consent decree is all but a given at this point... "There will be a level of capital where we think it sufficient to let them out of conservatorship but are not adequately capitalized. During that they will operate under a consent decree." - @FHFA @MarkCalabria #mortgagesummit Link to comment Share on other sites More sharing options...
Guest cherzeca Posted November 13, 2019 Share Posted November 13, 2019 Calabria moments ago. Sounds like consent decree is all but a given at this point... "There will be a level of capital where we think it sufficient to let them out of conservatorship but are not adequately capitalized. During that they will operate under a consent decree." - @FHFA @MarkCalabria #mortgagesummit some smart guy wrote the attached Link to comment Share on other sites More sharing options...
Luke 532 Posted November 13, 2019 Share Posted November 13, 2019 Calabria moments ago. Sounds like consent decree is all but a given at this point... "There will be a level of capital where we think it sufficient to let them out of conservatorship but are not adequately capitalized. During that they will operate under a consent decree." - @FHFA @MarkCalabria #mortgagesummit some smart guy wrote the attached That rolg is a smart guy. I see a lot of similarities between you and him. :) Link to comment Share on other sites More sharing options...
muscleman Posted November 13, 2019 Share Posted November 13, 2019 The securities prices remain entrenched in their five month (so far) long bear market. I wonder what muscleman is currently seeing in the charts, he's had the hot hand of late. Well, I had a hot hand earlier this year (3 trades, 40%, 2%, 35% separately) until a recent trade that cost me a 5% loss, with another round of taunting from people here, and it turned out to be the temporary top. I believe this: No one can make 100% profitable trades, but the moment a hot hand suddenly turned into a cold hand, instead of being upset and cursing, it is important to stay calm and pay attention to what Mr. Market is trying to tell me. We got an amazing court win, and Calabria stating clearly that we are gonna do this, but all we got is a false break out at 14 for FNMAS and then the daily chart had 90% of the days as down days. That's a very bad sign and enough for me to leave this alone and look at other opportunities. With that said, I still believe in the fundamentals, and I think what Mr. Market is telling me is likely that the events for FNMAS will be postponed and a major bull market is starting, so it is time to sell this and actively hunt in other spaces. The alternative is that Mr. market means this FNMAS investment thesis couldn't work, but I think it is more likely to be the prior case. Link to comment Share on other sites More sharing options...
buffetteer1984 Posted November 13, 2019 Share Posted November 13, 2019 Like clockwork, when FNMAS is going down, MM post about his abilities... Link to comment Share on other sites More sharing options...
Guest cherzeca Posted November 13, 2019 Share Posted November 13, 2019 "...I think what Mr. Market is telling me is likely that the events for FNMAS will be postponed and a major bull market is starting..." this is what I dont understand about your thinking, MM. to my mind, the greatest risk that would postpone events for GSEs is the market turning bearish, which would prevent them from raising capital. if you think there is a bull market starting (I would have said "continuing") then you would be inclined to conclude that the GSEs are able to do their capital raise. now I realize today that there is a lot of selling because the market is afraid that trump will be removed and pence will piss on the GSEs or some such, but just using your own thought process, I would have thought you would be now bullish on GSEs. Link to comment Share on other sites More sharing options...
Midas79 Posted November 13, 2019 Share Posted November 13, 2019 I think the selloff is happening because Calabria opened the door to release with consent decree happening after the inauguration. That means at a roughly 50% chance that it never happens; the Dems seem to be okay with the status quo. I mean really, 2022 or 2023? Wtf. I'm rather tempted to just sell a large chunk and wait, but unfortunately I don't have any other compelling investment ideas at all. It's this or cash for me. Link to comment Share on other sites More sharing options...
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