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

[merkhet]

I honestly don't know why #fanniegate continues to poke Corker.

 

It's not like they're going to get him to withdraw the letter he sent to FHFA. It's doubtful that they're going to be able to get him replaced (either now or even 2018), and all it does it piss off Senators & Congressmen on both sides of the aisle. (Setting aside whether their notions of being "above" these kind of attacks to their reputation are antiquated or not.)

 

It smacks of a pissing contest between large institutional managers & political power players.

 

And worse, it is counterproductive!

[investorG]

I honestly don't know why #fanniegate continues to poke Corker.

 

It's not like they're going to get him to withdraw the letter he sent to FHFA. It's doubtful that they're going to be able to get him replaced (either now or even 2018), and all it does it piss off Senators & Congressmen on both sides of the aisle. (Setting aside whether their notions of being "above" these kind of attacks to their reputation are antiquated or not.)

 

It smacks of a pissing contest between large institutional managers & political power players.

 

And worse, it is counterproductive!

 

it could absolutely affect his 2018 re-election prospects from a primary challenge or less likely the general.  and it would be helpful to the admin reform efforts if he dropped his aggressively antagonistic stance. 

 

the courts for many years have inexplicably proven incapable of delivering justice, so what do you expect these passionate advocates to do -- simply play nice and sit on relevant info when the other team is aggressively dirty?

 

 

[investorG]

I'm afraid I disagree. There was more than enough evidence for Miller and Ginsberg to see that something was not right. There is no mechanism to now overturn this decision based on new evidence. It seems that any rational person could see the government arhuement as lacking in substance. 

 

We are unfortunately down the rabbit hole here.  So more logic. More sense.  More evidence.  It's not going to change this.  And I'm afraid I never thought I would see something like this coming from the US court system.  But it's taught

Me an important lesson about investing in these situations.  I'm not the only one I would guess. And god  help  the financial institution that starts to look a little wobbly next.  It will vanish immediately

 

judge selection for the other regional appeals court case seems crucial --- millett and brown both gave the relevant respective judgments, it comes down to the 3 individuals who will read the case, read the dc circuit rulings, and decide which to support. 

[merkhet]

I honestly don't know why #fanniegate continues to poke Corker.

 

It's not like they're going to get him to withdraw the letter he sent to FHFA. It's doubtful that they're going to be able to get him replaced (either now or even 2018), and all it does it piss off Senators & Congressmen on both sides of the aisle. (Setting aside whether their notions of being "above" these kind of attacks to their reputation are antiquated or not.)

 

It smacks of a pissing contest between large institutional managers & political power players.

 

And worse, it is counterproductive!

 

it could absolutely affect his 2018 re-election prospects from a primary challenge or less likely the general.  and it would be helpful to the admin reform efforts if he dropped his aggressively antagonistic stance. 

 

the courts for many years have inexplicably proven incapable of delivering justice, so what do you expect these passionate advocates to do -- simply play nice and sit on relevant info when the other team is aggressively dirty?

 

I expect them to be smart enough to play a better game. As of right now, both sides of the aisle are pissed off at "the hedge fund guys who think they can just come in and swing their dicks around." (paraphrased)

 

Think about it this way. They played really hard against Corker and, rumor has it, they were able to keep him from getting Secretary of State. Okay, cool. Has this caused him to "drop[] his aggressively antagonistic stance?" No? Perhaps the beatings should continue until morale improves then.

[Desert_Rat]

What kept from the state dept is his questionable trading tactics, and I agree with G about why he's treated like the tool he is. For apparently obvious reasons he won't lay off, why should FnF shareholders?

 

[orthopa]

For those that thought the courts were the best way  to resolution in this investment I guess I just don't understand why a case on appeal that was already dismissed held so much weight? Not  to mention why the whims of judges are any different then the whims of mnuchin?

 

Who Do you guys/girls trust more mnuchin or the legal system?

 

For those looking for a legal resolution as cherzeca has pointed out there are still other avenues.

 

My money is on Mnuchin and what he may have/have not telegraphed already.

[orthopa]

Mnuchin has said we have to get FnF  out of govt control and ownership and several times mentioned ending the conservatorship.  Those who are feeling much less bullish what does this mean to you? I have posted this before and don't mean to be repetitive but who owns FnF if the govt doesn't?  What about what Mnuchin has said do you see detrimental to shareholders, how do we get zero?

[deadspace]

We have seen many plans and white papers describing multiple ways that mortgage reform could occur. some of these showed no concern for shareholders with even a scenario where the government would essentially just rename the entities and take over their function with shareholders receiving a shell

 

These companies need a lot of capital.  Even if you are the owner you need to factor in an extreme amount of dilution.  And the warrants are steuctured in such a way that government and the common are not on an equal plane. There are a lot of ways to interpret Mnuchins comments. The devil is in the dilution details and the eventual fee that the new companies will need to pay for their right to use the government guarantee and how much the profits are caped if we go to a utility model

[Desert_Rat]

Mnuchin has said we have to get FnF  out of govt control and ownership and several times mentioned ending the conservatorship.  Those who are feeling much less bullish what does this mean to you? I have posted this before and don't mean to be repetitive but who owns FnF if the govt doesn't?  What about what Mnuchin has said do you see detrimental to shareholders, how do we get zero?

 

Honestly, what it means to me is the impossible. The only way to get FnF out of govt control while still using that govt as a means to cheap capital (for cheap mortgages), is to shut down FHFA and sign into law regulations that stipulate politicians like Clinton and Frank can't affect FnF's loaning guidelines. Either is about as likely to happen as an equally cheap funding source coming down the pike.

 

But one big difference between Mnuchin and #crookedcorker is the former no doubt recognizes that the govt will always have to be sugar daddy, otherwise a disruption in housing will ensue, while the latter is a tool for TBTF banks and won't support that solution.

 

In the end FnF will become exactly what they once were except for a few dinky regulations, kinda like today but with respected shareholders.

[muscleman]

This has dropped so much, both preferreds and common. What is left to look forward to? Any ray of hope here? Why are preferreds dropping so much? close to 40% drop since their highs after election.

 

I recommend reading (or re-reading) Chapter 8 of The Intelligent Investor.

 

Do you think Benjamin Graham would have even invested in a company where government's hands are fully in the cookie jar? Where do you see this going? Mnuchin hasn't done anything and it appears that  the bank lobby and fake news is victorious in all of this. I don't know why Berkowitz, Ackman and Paulson aren't doing more. The more time slips, the less this could be resolved in my opinion. Courts are highly political as we know and the appeals court decision is a black mark on justice system as it was completely political.

 

Buffet once had a special situation play where the US government took control over a piece of land that the company owns and declared it as national park. It was also a lawsuit bet and he won in the end. Can't remember where I saw that and what that stock was. Probably in the Buffet annual letters?

 

 

 

[investorG]

And the warrants are steuctured in such a way that government and the common are not on an equal plane.

 

before any fresh capital would be raised, much less 50bn+, it is highly likely the warrants language would need explicit change to set firm terms on amount and exercise price.

[orthopa]

Mnuchin has said we have to get FnF  out of govt control and ownership and several times mentioned ending the conservatorship.  Those who are feeling much less bullish what does this mean to you? I have posted this before and don't mean to be repetitive but who owns FnF if the govt doesn't?  What about what Mnuchin has said do you see detrimental to shareholders, how do we get zero?

[muscleman]

Mnuchin has said we have to get FnF  out of govt control and ownership and several times mentioned ending the conservatorship.  Those who are feeling much less bullish what does this mean to you? I have posted this before and don't mean to be repetitive but who owns FnF if the govt doesn't?  What about what Mnuchin has said do you see detrimental to shareholders, how do we get zero?

 

I think it is more of an emotional overrun at this point. Anything has bright and dark side. When share prices go down, people look at the dark side more. When share prices go up, people look at the bright side more.

 

I personally had the same feelings and almost wanted to sell a few weeks ago. Then I reminded myself to go back to the analytical framework and forget about emotions.

 

[doughishere]

maybe y'all should all start a fannie and freddie therapy support group? You know for the emotional suffering.  /s

[Desert_Rat]

Or have 2 support groups, one for emotional suffering and one for being a humble winner. Held on the same night, same time in rooms across the hall from each other. That way people aren't inconvenienced for their particular mindset that day.

 

[DocSnowball]

This is for sure the education of a lifetime!

[muscleman]

maybe y'all should all start a fannie and freddie therapy support group? You know for the emotional suffering.  /s

 

LOL..... I've seen traders doing that after wiping out their leveraged commodity/option accounts.

 

I've yet to see traders doing that when their position still have a floating profit. If you are not comfortable, take the small profit and call it the day. I do agree that the unrealized gain have diminished by a lot after the Perry Appeal ruling, but the lesson I learned over the years is taking small profits can be detrimental. (You can't go broke taking profits? No!)

 

[rros]

maybe y'all should all start a fannie and freddie therapy support group? You know for the emotional suffering.  /s

 

LOL..... I've seen traders doing that after wiping out their leveraged commodity/option accounts.

 

I've yet to see traders doing that when their position still have a floating profit. If you are not comfortable, take the small profit and call it the day. I do agree that the unrealized gain have diminished by a lot after the Perry Appeal ruling, but the lesson I learned over the years is taking small profits can be detrimental. (You can't go broke taking profits? No!)

Trade or invest to your sleeping point. If you can't, it's time to look for greener pastures. There is always a bull market somewhere.

[Luke 532]

Article from UVA Law Professor Sai Prakash...

Ruling On CFPB Could Upend Controversial Net Worth Sweep

https://www.law360.com/articles/913454/ruling-on-cfpb-could-upend-controversial-net-worth-sweep

[muscleman]

maybe y'all should all start a fannie and freddie therapy support group? You know for the emotional suffering.  /s

 

LOL..... I've seen traders doing that after wiping out their leveraged commodity/option accounts.

 

I've yet to see traders doing that when their position still have a floating profit. If you are not comfortable, take the small profit and call it the day. I do agree that the unrealized gain have diminished by a lot after the Perry Appeal ruling, but the lesson I learned over the years is taking small profits can be detrimental. (You can't go broke taking profits? No!)

Trade or invest to your sleeping point. If you can't, it's time to look for greener pastures. There is always a bull market somewhere.

 

 

That's 100% true. The problem is that people's sleeping point tend to move. People always find it easier to sleep in a bull market than a bear market or a pull back during a bull market.

It is important to keep the sleeping point stable and invest below that sleeping point.  :) But this is far easier said than done.

 

 

[hardincap]

ft:

Steven Mnuchin said the target to get tax reforms through Congress and on President Donald Trump’s desk before August was “highly aggressive to not realistic at this point”. 

 

“It started as [an] aggressive timeline,” the former Goldman Sachs banker said in an interview with the Financial Times. “It is fair to say it is probably delayed a bit because of the healthcare.” 

 

 

[Luke 532]

ft:

Steven Mnuchin said the target to get tax reforms through Congress and on President Donald Trump’s desk before August was “highly aggressive to not realistic at this point”.

 

“It started as [an] aggressive timeline,” the former Goldman Sachs banker said in an interview with the Financial Times. “It is fair to say it is probably delayed a bit because of the healthcare.”

 

link... https://www.ft.com/content/2e48c5bc-238c-11e7-8691-d5f7e0cd0a16

[investorG]

ft:

Steven Mnuchin said the target to get tax reforms through Congress and on President Donald Trump’s desk before August was “highly aggressive to not realistic at this point”.

 

“It started as [an] aggressive timeline,” the former Goldman Sachs banker said in an interview with the Financial Times. “It is fair to say it is probably delayed a bit because of the healthcare.”

 

link... https://www.ft.com/content/2e48c5bc-238c-11e7-8691-d5f7e0cd0a16

 

He acts like he and his team of 100 treasury workers are developing medicines rather than plugging some numbers in a spreadsheet that will have enormous amounts of guesstimates due to economic growth impact assumptions.  at best he is simply stalling to see if healthcare reform can pass first to make his job easier. 

 

 

[doughishere]

investorG, here have a cup of coffee and a cookie and why dont you share with us your gse related feelings first? /s

[investorG]

investorG, here have a cup of coffee and a cookie and why dont you share with us your gse related feelings first? /s

 

if we're being objective, at this point it's fair to say he's off to an underwhelming start.  he violated his ethics agreement plugging lego batman, over-promised on legislation timing, and continues to fight aggressively against the GSEs in court (see today's treasury filing in the Delaware case).  I am not seeing leadership or strength at this point.  on the plus side, it's still early.  like to hear opposing views if you have one, thank you.