rros Posted January 8, 2018 Share Posted January 8, 2018 common down big again. anyone with balls of steel thinking of adding? hasn't been this low in a long time Interestingly, it is starting to look like a triple bottom more than 3 years in the making. If this is the last dip it may ultimately lead to a reverse head and shoulder with a target of $7-$8. IF, if, if... Link to comment Share on other sites More sharing options...
orthopa Posted January 8, 2018 Share Posted January 8, 2018 common down big again. anyone with balls of steel thinking of adding? hasn't been this low in a long time Interestingly, it is starting to look like a triple bottom more than 3 years in the making. If this is the last dip it may ultimately lead to a reverse head and shoulder with a target of $7-$8. IF, if, if... Is that even relevant in this case? I dont think TA means a whole lot at this point. Link to comment Share on other sites More sharing options...
orthopa Posted January 8, 2018 Share Posted January 8, 2018 How many common share did Ackman have again? As easy as it is to think "smart money" has been selling out of common due to knowing something about what may happen with common shares its likely just retail selling out. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted January 8, 2018 Share Posted January 8, 2018 WSJ article didnt say much other than there is not much too say, a lot of questions with the committee bill, which hasnt been drafted and released yet. im not sure that is a negative for common. Link to comment Share on other sites More sharing options...
rros Posted January 8, 2018 Share Posted January 8, 2018 common down big again. anyone with balls of steel thinking of adding? hasn't been this low in a long time Interestingly, it is starting to look like a triple bottom more than 3 years in the making. If this is the last dip it may ultimately lead to a reverse head and shoulder with a target of $7-$8. IF, if, if... Is that even relevant in this case? I dont think TA means a whole lot at this point. Not relevant. Just curiosity. Technical traders are surely noticing it. Ackman owns a lot of common stock but virtually insignificant when it comes to total funds invested. And since he always considered this position as long term options he is probably not worried. Link to comment Share on other sites More sharing options...
Midas79 Posted January 8, 2018 Share Posted January 8, 2018 WSJ article didnt say much other than there is not much too say, a lot of questions with the committee bill, which hasnt been drafted and released yet. im not sure that is a negative for common. It could be due to the high readership of the WSJ compared to other sources that have reported on this. I agree that no (new) real news has come out that would justify the drop in commons today. Link to comment Share on other sites More sharing options...
HalfMeasure Posted January 9, 2018 Share Posted January 9, 2018 How many common share did Ackman have again? As easy as it is to think "smart money" has been selling out of common due to knowing something about what may happen with common shares its likely just retail selling out. Seems like too much of a spike in volume for that. Link to comment Share on other sites More sharing options...
rros Posted January 9, 2018 Share Posted January 9, 2018 Fools are selling merely based on a draft bill and with shareholders section left blank. Shareholders are the rightful owners, like it or not. It doesn't affect me as a preferred holder but it is plain stupidity, I mean the selling. That "blank space".. more realistically means "blank for the public". Senators don't like the rumoring. Specially, the one that makes our stocks go up. Link to comment Share on other sites More sharing options...
Midas79 Posted January 9, 2018 Share Posted January 9, 2018 Fools are selling merely based on a draft bill and with shareholders section left blank. Shareholders are the rightful owners, like it or not. It doesn't affect me as a preferred holder but it is plain stupidity, I mean the selling. That "blank space".. more realistically means "blank for the public". Senators don't like the rumoring. Specially, the one that makes our stocks go up. If the Senators drafting the bill are so anti-hedge fund (note: I did not say anti-shareholder) then the blank could very well be a positive. A bill that zeros out all shareholders would cause prices to tank and the Senators would want that to be public. It does seem that none of the anti-GSE power players ever speak out against shareholders as a group, instead (especially David Stevens) using the prospect of hedge fund "windfalls" as an excuse to not allow the GSEs to recapitalize. I have always wondered what David Stevens would say if someone directly asked him "if all hedge funds and institutional investors sold all of their Fannie and Freddie shares would you still be against a recap?" Link to comment Share on other sites More sharing options...
rros Posted January 9, 2018 Share Posted January 9, 2018 Fools are selling merely based on a draft bill and with shareholders section left blank. Shareholders are the rightful owners, like it or not. It doesn't affect me as a preferred holder but it is plain stupidity, I mean the selling. That "blank space".. more realistically means "blank for the public". Senators don't like the rumoring. Specially, the one that makes our stocks go up. If the Senators drafting the bill are so anti-hedge fund (note: I did not say anti-shareholder) then the blank could very well be a positive. A bill that zeros out all shareholders would cause prices to tank and the Senators would want that to be public. It does seem that none of the anti-GSE power players ever speak out against shareholders as a group, instead (especially David Stevens) using the prospect of hedge fund "windfalls" as an excuse to not allow the GSEs to recapitalize. I have always wondered what David Stevens would say if someone directly asked him "if all hedge funds and institutional investors sold all of their Fannie and Freddie shares would you still be against a recap?" Politicos only care about optics. Privately, both C-W probably wish they could be Ackman-like in a 90 mill Manhattan dwelling. So I agree. Silence on the shareholders dpt. is most likely good. Or better. Link to comment Share on other sites More sharing options...
investorG Posted January 10, 2018 Share Posted January 10, 2018 Blank or not blank doesn’t really matter. I am certain that a bill with name of warner and corker will not pass. They are not to put a bill through on their way out when they couldn’t do it in the last 8 years. republican retirements keep rolling in. odds sites have chances of Democratic House in 2019 nearly two in three. are 9 Democratic senators going to agree on something that appeases Jeb henserling when they could wait a year and deal with Maxine Waters? possible, I guess, if they are bribed enough. but becoming increasingly likely that another year goes by without action, imo. Link to comment Share on other sites More sharing options...
Midas79 Posted January 10, 2018 Share Posted January 10, 2018 republican retirements keep rolling in. odds sites have chances of Democratic House in 2019 nearly two in three. are 9 Democratic senators going to agree on something that appeases Jeb henserling when they could wait a year and deal with Maxine Waters? possible, I guess, if they are bribed enough. but becoming increasingly likely that another year goes by without action, imo. At this point I'm starting to think that Mnuchin is just going to sit on his hands until next January, with the only small action being a special allowance for Fannie's DTA writedown in the vein of the 4th amendment from last month (advance them enough money to keep above water, increase liquidation preference, don't call it a draw). Allowing the GSEs to recap, retiring the seniors, etc. would piss off a lot of Republicans in Congress and Trump is already having enough trouble getting them on board with his agenda. Especially in the Senate where the majority is razor thin. If the Democrats gain control of Congress then no bill will be necessary. Recap and release, with FHFA being a strong regulator not allowing the GSEs to be run like hedge funds, would likely be pleasing to the Democrats. It really would be a bipartisan solution: Mnuchin never said that the Republican half of bipartisan support had to be in Congress. Link to comment Share on other sites More sharing options...
investorG Posted January 10, 2018 Share Posted January 10, 2018 republican retirements keep rolling in. odds sites have chances of Democratic House in 2019 nearly two in three. are 9 Democratic senators going to agree on something that appeases Jeb henserling when they could wait a year and deal with Maxine Waters? possible, I guess, if they are bribed enough. but becoming increasingly likely that another year goes by without action, imo. At this point I'm starting to think that Mnuchin is just going to sit on his hands until next January, with the only small action being a special allowance for Fannie's DTA writedown in the vein of the 4th amendment from last month (advance them enough money to keep above water, increase liquidation preference, don't call it a draw). Allowing the GSEs to recap, retiring the seniors, etc. would piss off a lot of Republicans in Congress and Trump is already having enough trouble getting them on board with his agenda. Especially in the Senate where the majority is razor thin. If the Democrats gain control of Congress then no bill will be necessary. Recap and release, with FHFA being a strong regulator not allowing the GSEs to be run like hedge funds, would likely be pleasing to the Democrats. It really would be a bipartisan solution: Mnuchin never said that the Republican half of bipartisan support had to be in Congress. this is now my base case view, mostly. (I believe reform, like turning them into utilities, would need to be added to any potential recap / release in 2019). but I also expect that corker will try to get something through committee at least in 1h 2018. the bank lobby is likely pushing hard. one potential wild card in this scenario: could mnuchin, now that the original 10pct loans have been paid off, make a 4th amendment that ends sweep, retires snr preferred, and puts in it's place an explicit fee paid by the GSEs for the Tsy backstop? this fee would naturally be lower than the full sweep earnings, but the rationale would be mnuchin believes FnF are not going away, and even if Congress is taking its time on the reform, it's best to get going on some capital build as they'll need it eventually. maybe this would settle some lawsuits too? Link to comment Share on other sites More sharing options...
Midas79 Posted January 10, 2018 Share Posted January 10, 2018 On another note, Trump is trying to get the ball rolling on an infrastructure plan. This could be his next major policy goal. http://fortune.com/2018/01/10/us-infrastructure-spending/ Congress would need to find a way to fund an expensive infrastructure package and the cost could cause both Democrats and Republicans to oppose the legislation. Trump wants $1 trillion. If Merkhet's idea works out, the government could potentially put up $200B and get the private sector to pledge the other $800B. If $100B comes from exercising the warrants and selling the shares (which would require recap and release to make the shares valuable enough) then the government could get a 10x multiplier on its commitment. Telling Congress that they can get $1T worth of infrastructure for $100B is a great way to build political capital, the amount Trump would lose from pissing off Rs about the GSEs notwithstanding. In my opinion that also skews the risk/reward towards the commons. If 80% of the companies are worth $100B then the remaining 20% is worth $25B. Given the current combined market cap of around $5B that's 400% upside. FNMAS, even if you assume it later trades at a 20% premium to par due to high dividends and call protection, has 275% upside at the moment (120% of par is $30, current share price of $8, potential gain of $22, 22/8 = 2.75). Less liquid and lower dividend series have similar upsides: something like FNMAK at 95% of par has an upside of 239%. Link to comment Share on other sites More sharing options...
investorG Posted January 10, 2018 Share Posted January 10, 2018 On another note, Trump is trying to get the ball rolling on an infrastructure plan. This could be his next major policy goal. http://fortune.com/2018/01/10/us-infrastructure-spending/ Congress would need to find a way to fund an expensive infrastructure package and the cost could cause both Democrats and Republicans to oppose the legislation. Trump wants $1 trillion. If Merkhet's idea works out, the government could potentially put up $200B and get the private sector to pledge the other $800B. If $100B comes from exercising the warrants and selling the shares (which would require recap and release to make the shares valuable enough) then the government could get a 10x multiplier on its commitment. Telling Congress that they can get $1T worth of infrastructure for $100B is a great way to build political capital, the amount Trump would lose from pissing off Rs about the GSEs notwithstanding. In my opinion that also skews the risk/reward towards the commons. If 80% of the companies are worth $100B then the remaining 20% is worth $25B. Given the current combined market cap of around $5B that's 400% upside. FNMAS, even if you assume it later trades at a 20% premium to par due to high dividends and call protection, has 275% upside at the moment (120% of par is $30, current share price of $8, potential gain of $22, 22/8 = 2.75). Less liquid and lower dividend series have similar upsides: something like FNMAK at 95% of par has an upside of 239%. they just had a summit on infrastructure, it likely would have leaked by now if the intention was to use the warrants. also, it's probably not good public policy to let monetizing warrants drive the bus on the future of housing finance rather than letting any warrant recovery value be a nice secondary benefit of whatever they ultimately decide, if it does lead to any value. i wish i am wrong but I doubt it. Link to comment Share on other sites More sharing options...
SnarkyPuppy Posted January 10, 2018 Share Posted January 10, 2018 Question for those who feel that shareholders will be treated favorably in exchange for dropping lawsuits- Is there a realistic scenario whereby all future litigation risk is removed from the government? Even in a recap/release whereby warrants are exercised- would there not be a new set of lawsuits raised against the government regarding the legality of the warrants? You can't say this is an unlikely outcome while simultaneously thinking that the legal route (the spefific legal route challenging HERA constitutionality) is viable. Link to comment Share on other sites More sharing options...
investorG Posted January 11, 2018 Share Posted January 11, 2018 Question for those who feel that shareholders will be treated favorably in exchange for dropping lawsuits- Is there a realistic scenario whereby all future litigation risk is removed from the government? Even in a recap/release whereby warrants are exercised- would there not be a new set of lawsuits raised against the government regarding the legality of the warrants? You can't say this is an unlikely outcome while simultaneously thinking that the legal route (the spefific legal route challenging HERA constitutionality) is viable. throwing the hera constitutional challenge is probably just a tactic to make them realize how egregious the NWS was. if a judge is ever sympathetic to shareholders and justice, then it's more likely they reverse the sweep than throw out hera. I don't think they could remove all future litigation risk but they could remove lots of it with a 4th amendment, imo. Link to comment Share on other sites More sharing options...
Midas79 Posted January 11, 2018 Share Posted January 11, 2018 Question for those who feel that shareholders will be treated favorably in exchange for dropping lawsuits- Is there a realistic scenario whereby all future litigation risk is removed from the government? Even in a recap/release whereby warrants are exercised- would there not be a new set of lawsuits raised against the government regarding the legality of the warrants? You can't say this is an unlikely outcome while simultaneously thinking that the legal route (the spefific legal route challenging HERA constitutionality) is viable. I have seen this part brought up in several places. At this point I don't see why the warrants are illegal or on what grounds a lawsuit would be brought if they were exercised. Certainly anyone who bought shares after the conservatorship already knew about the existence (and thus possible future exercise) of the warrants. Link to comment Share on other sites More sharing options...
orthopa Posted January 11, 2018 Share Posted January 11, 2018 Question for those who feel that shareholders will be treated favorably in exchange for dropping lawsuits- Is there a realistic scenario whereby all future litigation risk is removed from the government? Even in a recap/release whereby warrants are exercised- would there not be a new set of lawsuits raised against the government regarding the legality of the warrants? You can't say this is an unlikely outcome while simultaneously thinking that the legal route (the spefific legal route challenging HERA constitutionality) is viable. I have seen this part brought up in several places. At this point I don't see why the warrants are illegal or on what grounds a lawsuit would be brought if they were exercised. Certainly anyone who bought shares after the conservatorship already knew about the existence (and thus possible future exercise) of the warrants. I dont think the warrants were illegal and I think to contest the legality of the bailout you have to put yourself in the time and place of what was going on . It will be a high bar to hurdle that it was completely illegal when you had BAC, WFC, C, GS, GE, Dupont, GM, etc etc needing a bailout from the gov or WEB. Every day there was talk of a huge financial institution possible going belly up needing gov support. Gov got warrants for nearly all of those bailouts too. The Net Worth sweep a different story, different time, different place. I believe this is also why Berk isn't contesting the original bailout. Way to difficult to say it was illegal at that time. Im trying to think but cant think of a mechanism that could preclude any more lawsuits in a newco or recapitalized company. If the gov exercises the warrants that means common still exists. I'm sure there is something that you holding common past a certain date or after restructuring would preclude you from suing. Such as accepting shares in the new company or cash selling the shares in the open market as a payout after gov exercises warrants. Who wouldn't accept either, or sell out of shares early with full notice and carry on a lawsuit? That doesn't of course mean you love the return you would get though. I think treating pfd favorably is a whole different world then common treated favorably. Prf getting treated favorably would mean par and maybe a div. Common treated fairly would mean you just don't get completely wiped out. Gov could treat common fairly and newco could dilute the shit out of common holders for years and earnings could blow if new competition is substantial. Link to comment Share on other sites More sharing options...
Luke 532 Posted January 13, 2018 Share Posted January 13, 2018 For those that may have been concerned... from Peter A. Chapman: Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares. Order attached13-465-0396.pdf Link to comment Share on other sites More sharing options...
doughishere Posted January 13, 2018 Share Posted January 13, 2018 A copy of Judge Sweeney's scheduling order entered this afternoon is attached to this e-mail message. Judge Sweeney directs that (a) amended complaints be filed by Feb. 22; (b) motions to dismiss be filed by June 22; © responses be filed by Sept. 20; and (d) the government's reply be filed by Dec. 19. Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares. Link to comment Share on other sites More sharing options...
Luke 532 Posted January 13, 2018 Share Posted January 13, 2018 Why does a bloomberg journalist keep focus on stock price and volume on a daily basis? I can now see the general perception on social media that he writes to manipulate stock. Very disturbing. "High volume in some thinly traded Fannie and Freddie preferred shares today" I've found it useful throughout my career to spend zero mental energy on the stuff that doesn't matter. This falls in that category. Emily, as a college student I know you're early in your investing career, so I would like to suggest you focus your energies on what is important and nothing more. Ironically, somebody on a message board posting something that doesn't matter to me shouldn't result in me spending time to respond to it, but in this case my response might be beneficial to you. Link to comment Share on other sites More sharing options...
investorG Posted January 13, 2018 Share Posted January 13, 2018 A copy of Judge Sweeney's scheduling order entered this afternoon is attached to this e-mail message. Judge Sweeney directs that (a) amended complaints be filed by Feb. 22; (b) motions to dismiss be filed by June 22; © responses be filed by Sept. 20; and (d) the government's reply be filed by Dec. 19. Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares. question: a big if, but if they move on something legislatively or administratively in 2018, is it viable that the govt wouldn't have to settle lawsuits such as the one above in conjunction with such a move? or theoretically the govt could just act with a legal overhang? Link to comment Share on other sites More sharing options...
Guest cherzeca Posted January 13, 2018 Share Posted January 13, 2018 A copy of Judge Sweeney's scheduling order entered this afternoon is attached to this e-mail message. Judge Sweeney directs that (a) amended complaints be filed by Feb. 22; (b) motions to dismiss be filed by June 22; © responses be filed by Sept. 20; and (d) the government's reply be filed by Dec. 19. Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares. question: a big if, but if they move on something legislatively or administratively in 2018, is it viable that the govt wouldn't have to settle lawsuits such as the one above in conjunction with such a move? or theoretically the govt could just act with a legal overhang? i would answer this way: 1) mnuchin is a banker who is used to seeing hair (litigation risk) on transactions...and what you do when you are an experienced banker is remove the hair as/when you do the deal; 2) congress folks are less experienced with large transactions and will not have a clue as to the need to eliminate the hair when they want to do the deal...in fact, congress isnt even aware that GSE reform is a deal, not just a bill. Link to comment Share on other sites More sharing options...
Luke 532 Posted January 13, 2018 Share Posted January 13, 2018 Thursday, January 18, 2018 12:00 PM - 1:30 PM EST Craig Phillips will discuss the state of financial regulation and housing reform in the Trump Administration. He will give the Administration’s views on the best path forward. http://www.whfdc.org/index.php?option=com_jevents&task=icalrepeat.detail&evid=42&Itemid=115&year=2018&month=01&day=18&title=financial-regulation-and-housing-reform-in-the-trump-administration-a-public-policy-luncheon-with-craig-phillips-counselor-to-the-secretary-us-department-of-the-treasury&uid=ac32398b1890bc28d64a3c2c708b76e8 Link to comment Share on other sites More sharing options...
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