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

[rros]

I have never considered that angle but I now see the greater value of -perhaps- a small compensation. Provided we ever win.

[rros]

And while we wait... a mind game for members.

 

The phrase in question...

 

FHFA may

be appointed A)conservator or B)receiver for the purpose of C)reorganizing, D)rehabilitating, or E)winding up the affairs of a regulated entity.

 

The two possible agents are A and B.

The 3 possible actions are C, D and E.

 

Courts have upheld this relationship to be true:

 

A) can do E)

 

Based on the use of the word "or" allowing for overlapping of functions.

 

But to maintain the above relationship as true, all of the following relationships must also be true:

 

1. A) can do C)

2. A) can do D)

3. A) can do E) (government/courts position)

4. B) can do C)

5. B) can do D)

6. B) can do E)

 

Since a Receiver can only liquidate -as explicitely stated in the special powers section-, relationship 5 is an impossibility.

 

For the word "or" to be interpreted as allowing overlapping all elements of the sentence must be able to combine no matter where they are placed in the sentence, indistinctly. It is not grammatically possible for the word "or" to connect A)E) as true, while -being in the same sentence- connect B)D) as not true.

 

Because of this, it is not possible for the word "or" to mean overlapping of functions.

 

Note: *specific powers* § 4617(b)(2)(E), (F) enumerates powers reserved to the FHFA as receiver—which include liquidating the GSE and organizing a “successor enterprise” to operate the GSE.

[Guest cherzeca]

And while we wait... a mind game for members.

 

The phrase in question...

 

FHFA may

be appointed A)conservator or B)receiver for the purpose of C)reorganizing, D)rehabilitating, or E)winding up the affairs of a regulated entity.

 

The two possible agents are A and B.

The 3 possible actions are C, D and E.

 

Courts have upheld this relationship to be true:

 

A) can do E)

 

Based on the use of the word "or" allowing for overlapping of functions.

 

But to maintain the above relationship as true, all of the following relationships must also be true:

 

1. A) can do C)

2. A) can do D)

3. A) can do E) (government/courts position)

4. B) can do C)

5. B) can do D)

6. B) can do E)

 

Since a Receiver can only liquidate -as explicitely stated in the special powers section-, relationship 5 is an impossibility.

 

For the word "or" to be interpreted as allowing overlapping all elements of the sentence must be able to combine no matter where they are placed in the sentence, indistinctly. It is not grammatically possible for the word "or" to connect A)E) as true, while -being in the same sentence- connect B)D) as not true.

 

Because of this, it is not possible for the word "or" to mean overlapping of functions.

 

an example where a pure textualist reading is wrong.  Cs don't wind up.  why you need a reading of the context, purpose and structure of the statute to understand a sloppily written provision

[rros]

And while we wait... a mind game for members.

 

The phrase in question...

 

FHFA may

be appointed A)conservator or B)receiver for the purpose of C)reorganizing, D)rehabilitating, or E)winding up the affairs of a regulated entity.

 

The two possible agents are A and B.

The 3 possible actions are C, D and E.

 

Courts have upheld this relationship to be true:

 

A) can do E)

 

Based on the use of the word "or" allowing for overlapping of functions.

 

But to maintain the above relationship as true, all of the following relationships must also be true:

 

1. A) can do C)

2. A) can do D)

3. A) can do E) (government/courts position)

4. B) can do C)

5. B) can do D)

6. B) can do E)

 

Since a Receiver can only liquidate -as explicitely stated in the special powers section-, relationship 5 is an impossibility.

 

For the word "or" to be interpreted as allowing overlapping all elements of the sentence must be able to combine no matter where they are placed in the sentence, indistinctly. It is not grammatically possible for the word "or" to connect A)E) as true, while -being in the same sentence- connect B)D) as not true.

 

Because of this, it is not possible for the word "or" to mean overlapping of functions.

 

an example where a pure textualist reading is wrong.  Cs don't wind up.  why you need a reading of the context, purpose and structure of the statute to understand a sloppily written provision

Exactly! Willet got that right.

[Midas79]

an example where a pure textualist reading is wrong.  Cs don't wind up.  why you need a reading of the context, purpose and structure of the statute to understand a sloppily written provision

 

It makes me wonder what brilliant Treasury staffer read that statute and said "wait, we could make a case that a four-corners reading allows a conservator to do anything!"

[allnatural]

Correct me if i'm wrong, but I think the surprising part of the DC circuits ruling is that defendants never even brought up or thought about the whole "may" shenanigans prior to the ruling. The judges pulled it out of their *** to justify the sweep. They had a set conclusion and they were willing to do anything to back into that conclusion, enter "may".

 

an example where a pure textualist reading is wrong.  Cs don't wind up.  why you need a reading of the context, purpose and structure of the statute to understand a sloppily written provision

 

It makes me wonder what brilliant Treasury staffer read that statute and said "wait, we could make a case that a four-corners reading allows a conservator to do anything!"

[Luke 532]

Mayopoulos stepping down...

https://www.cnbc.com/2018/07/23/fannie-mae-ceo-timothy-mayopoulos-to-step-down-by-years-end.html

[rros]

an example where a pure textualist reading is wrong.  Cs don't wind up.  why you need a reading of the context, purpose and structure of the statute to understand a sloppily written provision

 

It makes me wonder what brilliant Treasury staffer read that statute and said "wait, we could make a case that a four-corners reading allows a conservator to do anything!"

Those names -and meetings- can be found in the depositions from Berkowitz' lawsuit. No smoking gun. But...

[Midas79]

Mayopoulos stepping down...

https://www.cnbc.com/2018/07/23/fannie-mae-ceo-timothy-mayopoulos-to-step-down-by-years-end.html

 

He was right, the companies stayed in conservatorship throughout his tenure.

 

I still find it silly that HERA capped the compensation packages for the CEOs but didn't bother with the rest of upper management.

[allnatural]

 

Hopefully her views haven't changed much. Not that I believe anything will actually get done legislatively in a material sense, but doesnt hurt to have another ally here.

[muscleman]

 

Hopefully her views haven't changed much. Not that I believe anything will actually get done legislatively in a material sense, but doesnt hurt to have another ally here.

 

 

Investing is not based on hope. It is based on facts. Democrats implemented NWS, and you are now hoping they get back Congress and reverse NWS?

In addition, i think chances are slim that democrats get control of Congress this November. Their biggest donor Soros just said he is not a Democrat. That means he is giving up and now trying to fund liberal Republicans.

[Guest cherzeca]

if a NWS case ever gets to scotus, we can all hope kavanaugh has been confirmed: 

[rros]

if a NWS case ever gets to scotus, we can all hope kavanaugh has been confirmed: 

Thank you for the link!

[rros]

Bank lobby to place their stooges is in full force. Demarco, Hen , Mr. Bright who wrote HERA.

 

https://www.americanbanker.com/news/idea-of-running-fhfa-is-intriguing-jeb-hensarling-says

AB also published a list of potential successors beyond Hensarling:

 

Marzol, the senior adviser to Department of Housing and Urban Development Secretary Ben Carson, is Mills’ top pick for FHFA director.

 

“I think he is someone who would be viewed favorably on Capitol Hill and from the housing finance industry,” Mills said.

 

Before joining HUD, Marzol spent several years at Essent Guaranty and Essent Group, serving as director, executive vice president, executive vice chairman and vice chairman of enterprise risk.

 

Marzol also held several positions at Fannie Mae from 1996 to 2006, including executive vice president of finance and credit, senior vice president of corporate strategy and competitive analysis and interim chief risk officer.

 

Mills said Marzol likely would support reducing the GSEs’ influence on the mortgage market, but not immediately releasing them from conservatorship. His approach could differ from policymakers who have backed cutting off the government’s influence in housing finance, such as House Financial Services Committee Chairman Jeb Hensarling, who has also been mentioned as a potential FHFA pick.

 

"I think an Adolfo or someone who the industry is comfortable with would chart a very different path than a Chairman Hensarling,” Mills said.

Essent is owned by Paulson. Not Hank. Our Paulson.

 

Bright had nothing to do with HERA. Calabria, instead, yes. And Calabria -who sided with shareholders- is also another FHFA candidate.

[BeerBBQ]

https://www.politico.com/story/2018/07/27/federal-housing-chief-sexual-harassment-investigation-714779

 

[Guest cherzeca]

there is the court path and the legislative/administrative path.

 

with appeal of bhatti (actual) and collins (expected), and saxton, Fairholme and hindes/jacobs coming down the pike, I still have faith in the courts...patience is a virtue

 

I think there will still be no legislative path if the Rs retain both houses, and sure as hell no legislative path if one or more house goes D.

 

so it is up to the administration, apart from the courts.  and notwithstanding all of the machinations and rumors put out by lobbyists, I say trump is a deal doer and there is a deal to be done with f/f.

[Guest cherzeca]

https://www.politico.com/story/2018/07/27/federal-housing-chief-sexual-harassment-investigation-714779

 

watt:  "...I am confident that the investigation currently in progress will confirm that I have not done anything contrary to law."

 

but didn't the contract change the law?

[rros]

https://www.politico.com/story/2018/07/27/federal-housing-chief-sexual-harassment-investigation-714779

 

watt:  "...I am confident that the investigation currently in progress will confirm that I have not done anything contrary to law."

 

but didn't the contract change the law?

"I was just acting as a Receiver to receive a kiss", Mel said as his justification for his improper action. (jmu > just made up)

 

Dance it alone, Mel!

[Midas79]

https://www.politico.com/story/2018/07/27/federal-housing-chief-sexual-harassment-investigation-714779

 

Watt is really pushing the limits of that 4617(f) clause...

:P

[rros]

https://www.politico.com/story/2018/07/27/federal-housing-chief-sexual-harassment-investigation-714779

 

Watt is really pushing the limits of that 4617(f) clause...

:P

 

ON THE POWERS OF THE AGENCY

Section 1.2

Special (super)Powers

 

1.2.1

"A Conservator or Receiver may not engage in acts of sexual abuse".

 

Watt's reading: I may not. But I can!

[TwoCitiesCapital]

https://www.politico.com/story/2018/07/27/federal-housing-chief-sexual-harassment-investigation-714779

 

Watt is really pushing the limits of that 4617(f) clause...

:P

 

ON THE POWERS OF THE AGENCY

Section 1.2

Special (super)Powers

 

1.2.1

"A Conservator or Receiver may not engage in acts of sexual abuse".

 

Watt's reading: I may not. But I can!

 

Couldn't have happened to a nicer guy....

 

Lol

[Luke 532]

Calling Judge Kavanaugh

The Fifth Circuit tees up a major separation of powers case.

https://www.wsj.com/articles/calling-judge-kavanaugh-1532895994

[rros]

Camden Fine:

 

“In effect, they seized private property for government benefit (and severely crippled hundreds of community banks in the process). By seizing all the profits of the two GSEs, they assured that the government coffers would be handsomely fed and that the GSEs would never emerge from conservatorship unless the Congress dealt with the problem, which it has been loath to do.”

 

“In my view, statutes have been ignored or outright violated. Is the duty and obligation of the conservator, the FHFA, to keep those entities under conservatorship in perpetuity?”

 

https://www.americanbanker.com/opinion/where-gse-reform-went-wrong

Easy to speak up now that he is not with ICBA anymore. So, useless.

[Luke 532]

Some vaguely interesting language in Freddie's 10-Q.  In my reading, there wasn't discussion of post-conservatorship or exiting conservatorship in previous 10-Q's.  I could be wrong.

 

On page 59 (page 61 of 216 in PDF format)...

These returns may not be indicative of the returns that would be generated if we were to exit conservatorship, especially as the terms and timing of any such exit are not currently known and will depend upon future actions by the U.S. government. Our belief, should we leave conservatorship, is that returns at that time would most likely be below the levels calculated above, assuming the same portfolio of risk assets, as we expect that we would hold capital post-conservatorship above the minimum required regulatory capital. It is also likely the we would be required to pay fees for federal government support, thereby reducing our total comprehensive income.

Freddie_10-Q_2018_Q2.pdf

[DRValue]

Some vaguely interesting language in Freddie's 10-Q.  In my reading, there wasn't discussion of post-conservatorship or exiting conservatorship in previous 10-Q's.  I could be wrong.

 

On page 59 (page 61 of 216 in PDF format)...

These returns may not be indicative of the returns that would be generated if we were to exit conservatorship, especially as the terms and timing of any such exit are not currently known and will depend upon future actions by the U.S. government. Our belief, should we leave conservatorship, is that returns at that time would most likely be below the levels calculated above, assuming the same portfolio of risk assets, as we expect that we would hold capital post-conservatorship above the minimum required regulatory capital. It is also likely the we would be required to pay fees for federal government support, thereby reducing our total comprehensive income.

 

Agree. They're telling us the way the wind is blowing. I've been buying weekly for a month and I'm not stopping.