Jump to content

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


twacowfca

Recommended Posts

*REPORT CALLS FOR U.S. ENTITY TO OVERSEE FULLY PRIVATE GSES 13:10:16

*GSE PRIVATIZATION WOULD ENABLE COMPETITORS, WHITE HOUSE SAYS 13:10:18

*REPORT URGES EXPLICIT MBS GUARANTEE FOR GSES AND COMPETITORS 13:10:20

*WHITE HOUSE REORGANIZATION PLAN WOULD REMOVE GSES' U.S. CHARTER

 

13:10:22 *FANNIE-FREDDIE FULL PRIVATIZATION URGED IN WHITE HOUSE REPORT 13:10:24 FMCC,FNMA

Removing charters, shrinking size, full privatization and conversion to monoline insurers reminds me of the original Jim Millstein's plan.
Link to comment
Share on other sites

  • Replies 16.7k
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Posted Images

In the past, this piece of news would have sent the Jrs. skyrocketing close to full value. Given current reaction we run the risk that upon full recapitalization we go back to pennies on the dollar.

Link to comment
Share on other sites

*REPORT CALLS FOR U.S. ENTITY TO OVERSEE FULLY PRIVATE GSES 13:10:16

*GSE PRIVATIZATION WOULD ENABLE COMPETITORS, WHITE HOUSE SAYS 13:10:18

*REPORT URGES EXPLICIT MBS GUARANTEE FOR GSES AND COMPETITORS 13:10:20

*WHITE HOUSE REORGANIZATION PLAN WOULD REMOVE GSES' U.S. CHARTER

 

13:10:22 *FANNIE-FREDDIE FULL PRIVATIZATION URGED IN WHITE HOUSE REPORT 13:10:24 FMCC,FNMA

Removing charters, shrinking size, full privatization and conversion to monoline insurers reminds me of the original Jim Millstein's plan.

 

Don't forget Berkowitz's plan from way back as well...

Link to comment
Share on other sites

In the past, this piece of news would have sent the Jrs. skyrocketing close to full value. Given current reaction we run the risk that upon full recapitalization we go back to pennies on the dollar.

 

Take advantage of the inefficiency. 

Link to comment
Share on other sites

In the past, this piece of news would have sent the Jrs. skyrocketing close to full value. Given current reaction we run the risk that upon full recapitalization we go back to pennies on the dollar.

 

Agreed.

 

Where were you when you realised you should've been short all along?

Link to comment
Share on other sites

*REPORT CALLS FOR U.S. ENTITY TO OVERSEE FULLY PRIVATE GSES 13:10:16

*GSE PRIVATIZATION WOULD ENABLE COMPETITORS, WHITE HOUSE SAYS 13:10:18

*REPORT URGES EXPLICIT MBS GUARANTEE FOR GSES AND COMPETITORS 13:10:20

*WHITE HOUSE REORGANIZATION PLAN WOULD REMOVE GSES' U.S. CHARTER

 

13:10:22 *FANNIE-FREDDIE FULL PRIVATIZATION URGED IN WHITE HOUSE REPORT 13:10:24 FMCC,FNMA

Removing charters, shrinking size, full privatization and conversion to monoline insurers reminds me of the original Jim Millstein's plan.

 

Don't forget Berkowitz's plan from way back as well...

You are right. Was that his 50 bill purchase price plan backed by investors?
Link to comment
Share on other sites

Guest cherzeca

*REPORT CALLS FOR U.S. ENTITY TO OVERSEE FULLY PRIVATE GSES 13:10:16

*GSE PRIVATIZATION WOULD ENABLE COMPETITORS, WHITE HOUSE SAYS 13:10:18

*REPORT URGES EXPLICIT MBS GUARANTEE FOR GSES AND COMPETITORS 13:10:20

*WHITE HOUSE REORGANIZATION PLAN WOULD REMOVE GSES' U.S. CHARTER

 

13:10:22 *FANNIE-FREDDIE FULL PRIVATIZATION URGED IN WHITE HOUSE REPORT 13:10:24 FMCC,FNMA

Removing charters, shrinking size, full privatization and conversion to monoline insurers reminds me of the original Jim Millstein's plan.

 

Don't forget Berkowitz's plan from way back as well...

You are right. Was that his 50 bill purchase price plan backed by investors?

 

why think of Berkowitz's plan more so than Noelia's blueprint? is there anything in this release that augers for one over the other?

Link to comment
Share on other sites

Don't forget Berkowitz's plan from way back as well...

You are right. Was that his 50 bill purchase price plan backed by investors?

 

Yup, that's the one.

 

why think of Berkowitz's plan more so than Noelia's blueprint? is there anything in this release that augers for one over the other?

 

Not really. I just meant that Berkowitz's plan accounts for multiple competitors, which seems to fit in with the report.

Link to comment
Share on other sites

*REPORT CALLS FOR U.S. ENTITY TO OVERSEE FULLY PRIVATE GSES 13:10:16

*GSE PRIVATIZATION WOULD ENABLE COMPETITORS, WHITE HOUSE SAYS 13:10:18

*REPORT URGES EXPLICIT MBS GUARANTEE FOR GSES AND COMPETITORS 13:10:20

*WHITE HOUSE REORGANIZATION PLAN WOULD REMOVE GSES' U.S. CHARTER

 

13:10:22 *FANNIE-FREDDIE FULL PRIVATIZATION URGED IN WHITE HOUSE REPORT 13:10:24 FMCC,FNMA

Removing charters, shrinking size, full privatization and conversion to monoline insurers reminds me of the original Jim Millstein's plan.

 

Don't forget Berkowitz's plan from way back as well...

You are right. Was that his 50 bill purchase price plan backed by investors?

 

why think of Berkowitz's plan more so than Noelia's blueprint? is there anything in this release that augers for one over the other?

Does Moelis also shrink them in size and provides for competition? I can't remember now... But more competition and smaller sizes are both in line with J. Powell's speech of a few years ago. I believe Berkowitz/Millstein's idea was of them becoming reinsurers. I seem to have forgotten the essence of Moelis but it sounded reviving them with a few changes (paid-for gov guarantee and a double layer of capital).
Link to comment
Share on other sites

Guest cherzeca

Don't forget Berkowitz's plan from way back as well...

You are right. Was that his 50 bill purchase price plan backed by investors?

 

Yup, that's the one.

 

why think of Berkowitz's plan more so than Noelia's blueprint? is there anything in this release that augers for one over the other?

 

Not really. I just meant that Berkowitz's plan accounts for multiple competitors, which seems to fit in with the report.

 

fnma common ends down.  I don't get it.

 

take a look at monolines.  basically only one company (AGO) writing new business.  financial guaranty business is hard to start afresh.  I understand that a fed backstop helps but it sounds limited and last resort.  when I read this proposal, I don't read death to common equity.  prominent is notion that FnF need to exit conservatorship and rebuild capital.  you would think from common action today that someone thinks this is a breakup proposal

 

Link to comment
Share on other sites

So this sounds like Mnuchin has now his hands free to strike a deal with FHFA -all perhaps, as Watt is the Utility maverick- paving the road for a more complete recapitalization? Maybe even doing away with the nws and imposing the infamous commitment fee for the credit line? Then, sit on their hands till there is a new Congress and push for legislation that is inline with the WH's view?

 

??

 

?

 

I am full of questions today. ?

Link to comment
Share on other sites

you would think from common action today that someone thinks this is a breakup proposal

Just like us, everybody seems undecided of what this means. I am hoping Berkowitz wasn't the one selling fnmas today. Perhaps Mulvaney shows up somewhere (cnbc, bloomberg) with clarifications?

Link to comment
Share on other sites

https://www.americanbanker.com/news/white-house-pushes-surprise-fannie-freddie-reform-plan-but-is-it-workable

 

"We do not believe that the OMB proposal enjoys much support within government. It is interesting that it came out without direct expressions of support of Treasury or HUD, both of which are major players within this White House on housing policy," Seiberg said in a research note."

 

man im confused

Link to comment
Share on other sites

Guest cherzeca

https://www.americanbanker.com/news/white-house-pushes-surprise-fannie-freddie-reform-plan-but-is-it-workable

 

"We do not believe that the OMB proposal enjoys much support within government. It is interesting that it came out without direct expressions of support of Treasury or HUD, both of which are major players within this White House on housing policy," Seiberg said in a research note."

 

man im confused

 

consider the source:  American banker

 

I still believe that at long effing last a court decision will move this along, but I am pleased to see this proposal.  it is sane and very much post corker/hensarling

Link to comment
Share on other sites

I still believe that at long effing last a court decision will move this along, but I am pleased to see this proposal.

 

And the court ruling today on CFPB being unconstitutional may indirectly be just what we needed.  If CFPB and FHFA are so similar, which they are, and if FHFA is deemed unconstitutional then wouldn't it stand to reason that the entire conservatorship is nullified... in other words, goodbye warrants, goodbye senior prefs, etc.  Would make sense to dot the i's and cross the t's now on a final solution while the gov't still has control.

Link to comment
Share on other sites

Guest cherzeca

I still believe that at long effing last a court decision will move this along, but I am pleased to see this proposal.

 

And the court ruling today on CFPB being unconstitutional may indirectly be just what we needed.  If CFPB and FHFA are so similar, which they are, and if FHFA is deemed unconstitutional then wouldn't it stand to reason that the entire conservatorship is nullified... in other words, goodbye warrants, goodbye senior prefs, etc.  Would make sense to dot the i's and cross the t's now on a final solution while the gov't still has control.

 

this court reaffirmed judge kavanaugh's reasoning.  at some point Scotus will hear this claim. I hope judge schlitz grows a pair in bhatti when he sees this

Link to comment
Share on other sites

I am not sure T. Howard is right on this one. Mnuchin hand-selected Jerome Powell who made it known in a housing reform speech his belief of breaking up the duopoly and need for privatization. How likely is it that Mnuchin would have picked the head of the Federal Reserve had he disagreed with these two points? The OMB is the largest office within the executive branch and is overseen by the WH chief of staff John Kelly. Although there may be some disagreements within the executive, the OMB plan has to have strong backing. Specially from Trump himself. It is possible that he will get involved -even if behind the scenes- to move this plan forward through Congress, a new Congress perhaps, and form a strong coalition. It is ridiculous to think that because Treasury/Trump aren't mentioned in any form in the plan they are against it.

 

My view is that this will move forward as it very likely has the backing of large investors too. And that T. Howard and others hate it. The coming competition and the breaking up of the duopoly. ICBA could also be in the camp of TH. And Watt, who proposed a utility and -now it is clear- is not in sync with the Administration. It makes sense Mnuchin will prefer waiting until there is a new head of the FHFA who will be on *their* agenda. TH would only like one thing: restitution of the companies as they were as a protected duopoly.

Link to comment
Share on other sites

Market seems to be tiring of the speculation and really wants only a final decision at this point. Can we call agree on the fact the FnF are not going away and coming out of conservatorship? No more reason to speculate. Basically at this point I just want to know what I get for holding my preferred shares going on 4 years now.

 

In the bloomberg article that came out Stevens was very supportive of the plan. Maybe that endorsement and revoking the charters are what is scaring some people still?

 

Still of course no mention of what will happen to the shareholders.

Link to comment
Share on other sites

Still of course no mention of what will happen to the shareholders.

 

They are giving a major hint, possibly.  Mentioning that they are private companies repeatedly is encouraging.

 

Explicitly stating that they are privately-owned, and then completely wiping out shareholders (instead of just massive dilution to common), would seem to set the White House up for lawsuits that could come back to hurt them.  I think they are smarter than that. 

 

It reads to me that they are making a concerted effort to mention that they are privately-owned companies.

 

"However, this system is challenged by the operation of two privately-owned Government sponsored-enterprises (GSEs), Fannie Mae and Freddie Mac..." (page 75)

 

"Competition to the duopolistic role played by the two privately-owned GSEs

would be an essential element..." (page 75)

 

"In order to propose changes in the Federal Government’s role in housing finance, this proposal outlines policies related to the privately-owned GSEs and ending their conservatorship." (page 75)

 

"Under the current system, Fannie Mae and Freddie Mac, two privately-owned GSEs, buy and guarantee..." (page 76)

Link to comment
Share on other sites

Guest cherzeca

tbtf banks could always in theory form a third mbs guarantor. they probably should have while FnF have been in conservatorship. why do they think the limited federal backstop and eliminating the FnF federal charter will be so helpful? what they really wanted was a corker/mba liquidation/breakup of FnF so that they could sop up the pieces, and this proposal makes it clear (as if the corker plan not getting even presented in committee didn't) that this will not happen

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now



×
×
  • Create New...