Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Maybe your local zoning board will rezone the adjoining lots next to your house for a 5 story Section 8 housing project, just ask them! I know people that will finance it and build it, that would be a big win for you wouldn't it? HeeeHeee!
Builders have applied for housing permits for approximately 1 million units and they will likely respond to the increase in the prices of housing by building more. It won't be overnight but it will gradually help. Also a big supply increase will be incentives for local zoning boards to increase density, a fan favorite of your favorite party. It takes time, but equilibrium will be reached.
The twins have locked in their profits from all this new business and will continue to do so.
I still think you should hedge at least 10% of your junior with common so you will have two horses in the race going forward...
I just think it's a case of the earlier plaintiff court cases finding for da gubmint has put this issue off the radar screen of most reporters, who are especially ill equipped to understand Conservatorship law, Severability Analysis, and just how badly da gubmint has acted here. They are just falling back on their old narrative of the evil hedge fund guys and I think will not be writing very informed journalism when trying to digest the upcoming SCOTUS decision...
Just alot of things happening at once in the US Housing Market, triggering demand increases and supply decreases! They will eventually come back to equilibrium...
I guess when the US Government expropriates large US Privately Owned Corporations, it is not newsworthy for the Wall Street Journal, Fox Business News, The New York Times, Washington Post, et. al,.....Sad.
Looks like fmcc book of business grew 2x as fast in 2020 and so far in 2021 as fnma (20% v 10%) but fnma has approximately $1T more in MBS. MC may be trying to get them out first. Tick tock...
https://www.law.com/nationallawjournal/2021/06/01/trump-administration-alumnus-hashim-mooppan-returns-to-jones-day/?slreturn=20210501205114
https://fedsoc.org/contributors/hashim-mooppan
https://fedsoc.org/events/when-the-government-changes-sides-in-ongoing-litigation
https://www.jonesday.com/en/news/2021/06/hashim-mooppan-returns-to-jones-day-as-partner-in-issues--appeals-practice-in-washington
That is exactly how it normally works. Thursday is the conference Monday decision.
I mean they will probably have at least 1 ready (they want a Summer Vacation too). The low hanging fruit cases are the ones that are unanimous or nearly so.
I think Collins may be later because it has to legally mesh with the Severability Analysis in the ACA case (aka OBAMACARE), California v Texas...
Thursday after their conference if they have any of the approximately 2 dozen cases ready with a finalized opinion.
The reason WHY the SCOTUS is likely NOT going to invalidate the entire ACA and hold it Unconstitutional, is BECAUSE they have a legal doctrine known as "Severability Analysis". Just like in Seila Law and probably Collins, the SCOTUS will simply excise or remove the Constitutionally offensive provision if the rest of the statute can stand up on its own two feet afterwards.
The SCOTUS will literally take out a blue pencil, scratch out the offending language and pretend like nothing happened (aka the Scalpel approach).
I say for Collins, they need to get out the BULLDOZER and just stop this abusive and coercive Nationalization of two private corporations AND this may finally send an important message to the US CONGRESS TO STOP PLAYING AROUND WITH NOVEL 4TH BRANCH OF GOVERNMENT STRUCTURES THAT COULD IMPINGE UPON THE CITIZENS LIBERTIES - HERE A "TEMPORARY CONSERVATORSHIP" THAT THE GOVERNMENT HAS TWISTED AND TURNED INTO A NEVER ENDING EXPROPRIATION VIA HERA.
But will the SCOTUS finally "grow a pair" and send a strong message to the 1st Branch of gubmint, probably not BUT you never know do you?
Great find! Least their be a shadow of a doubt by any of the 9 Justices that somehow the government is going to do WHAT HERA INSTRUCTED THE GOVERNMENT TO DO IN 2008!
Check out this alleged scandal over 100 years ago by a law clerk at the SCOTUS (Money and human beings are sometimes a bad combination): "On December 16, 1919, Ashton Fox Embry, law clerk to Supreme Court Justice Joseph
McKenna, abruptly resigned from the position he had held for almost nine years. His explana-
tion? His fledgling bakery business required his undivided attention. Newspapers that morning
hinted at a different reason: Embry resigned because he had conspired with at least three indi-
viduals to use inside knowledge of upcoming U.S. Supreme Court decisions to profit on Wall
Street. 2 A grand jury returned an indictment against Embry and his associates a few months
later, and Embry's argument that he had committed no crime ultimately reached the Supreme
Court, the very institution he was accused of betraying.
Despite the sensational headlines and fierce legal battle arising from his indictment, the
United States Attorney quietly dismissed Embry's case in 1929, almost ten years after the story
had broken. Few Court scholars have ever heard of Embry, and the memory of Embry, much
like the case against him, has disappeared with time. 3 This article unravels the "Supreme Court
Leak Case" by reconstructing what happened almost eighty years ago."
https://heinonline.org/HOL/LandingPage?handle=hein.journals/illlr95&div=12&id=&page=
"A bank is a place that will lend you money if you can prove that you don't need it."
Bob Hope
Both the irony and tragedy of the 12.5+ year "temporary conservatorship", is that had the government chosen to follow HERA, the gses could have been much more adept at tackling the 3.8 million home shortage that has built up over the last decade.
The very people that BO attests to help he has hurt the most, sad!
Isn't it amazing that these eviction and foreclosure moratoriums were originally legislatively passed with ZERO DOLLARS TO PAY FOR THEM!!!! Oh yeah, the evil banksters/evil landlords can pay for it....
I bet if you asked the average American, "Do you know what Fannie Mae is?", they would say, "Isn't that a chocolate company!"....
MO MONEY, MO MONEY, MO MONEY, from todays DC rag (WP): ""We're really excited," policy analyst Eliana Golding said, referring to the proposal to add a record-breaking $400 million over two years to the Housing Production Trust Fund. The fund helps finance construction and preservation of low- and middle-cost housing. More than $100 million in additional ARP money is going to other affordable housing programs.
"The federal funds have been a complete game-changer on this," Golding said.
Admittedly, some caution is required. The council must approve the budget, although it appears to support key elements of the housing plan. Golding said that even Bowser's robust proposal doesn't add enough money to end homelessness or sufficiently repair public housing.
It also doesn't match the scale of housing needs, which have soared in affluent metropolitan regions like ours.
For instance, Bowser said the extra money in the trust fund would help developers build an additional 2,700 subsidized housing units over the next two or three years. But the National Low Income Housing Coalition says the city needs an additional 23,370 affordable rental homes just for its lowest-income families, or those earning $38,940 or less for a four-member household.
"Every dollar helps in terms of trying to meet needs, [but] there's still a need for more," said David Bowers, vice president of Enterprise Community Partners, a nonprofit organization focused on affordable housing. "That message hasn't changed.""
That's right Nats1, a watched pot never boils! The SCOTUS does alot of heavy lifting, trying to resolve some of the more difficult conflicts faced in our American society. In addition to California v Texas, the Fulton v Pennsylvania case, answers a question involving the intersection of religious freedom and gay rights to adopt a child. They did a case a couple years back about a baker in Colorado who said, "Hell no, I'm not going to make a wedding cake for homosexuals, it goes against my religious beliefs which are protected by the US Constitution.". I forgot what the court ruled, but I think it was limited to only that Colorado baker. Here's another one that was heard before ours: https://www.cnbc.com/2021/05/31/supreme-court-decision-in-major-lgbt-rights-case-seen-as-bellwether.html
I think we will get our ruling before the 4th of July, in the meantime seems to me the risk to reward ratio is compelling! We'll see what happens!
This whole drama has been spectacularly slanted by Governmental Bad Actors. After 6 years of an extremely reluctant government to turn over the required smoking gun documents in discovery or even acknowledge culpability for their bad acts, it's time for the courts to intervene, let's see what happens.
The ACA case was front and center in Justice ACB'S 2 day confirmation hearing (which makes the Phil Donohue show look tame). The ACA case, California v Texas, deals with the US Constitution and "Severability Analysis" so too does Collins.
I think Nats1 pointed out a Legal Scholar article on why these big political cases are usually decided toward the end of the term.
That said the USSCT can do whatever it wants...
The SCOTUS should be able to ascertain that the 4th Amendment is just more governmental shenanigans to perpetuate the nationalization of these 2 private corporations. They have the power to eviscerate the ability of the government to continue down the path of nationalization and I think this will be a major catalyst to that end.
That's right, typically the SCOTUS will issue a ruling stating the resolution of the questions presented with remand to the lower courts for a finding consistent with their ruling. So here, the SCOTUS could rule that the nws was an ultra vires act of a federal agency director under HERA and pursuant to the Administrative Procedures Act is void. They could also rule that the head of the FHFA is removable at will and punt on the remedy portion of the Severability Analysis since the Collins Plaintiffs will have received the remedy they seek from the court. It would be nice if the SCOTUS further clarified the Anti-injunction and Succession Clause aspects of HERA for Collins and all of the other Litigation making its way up the federal circuits to possibly come knocking on the SCOTUS door again.
Nice one! I'm sure he knows exactly where we are coming from!
Is MC foreshadowing the return of the stolen loot by FHFA and the UST after plundering the gses all these years?
I think under HERA you only had a 60 day time frame from the September 06, 2008 placement of the gses into Conservatorship to actually challenge the validity of the Conservatorship in the courts (aka the Statute of Limitations). Although I think the Washington Mutual case may be the only remaining viable case that has challenged the Conservatorship itself.
You mean you didn't believe Lockhart when he said, "Nothing to see here folks, the "Conservatorship" is temporary, we are going to right the ship and everything will be back to normal", in his news release? How can you tell when a politician is lying? When he is moving his lips...
https://www.whitehouse.gov/omb/analytical-perspectives/
Or
https://www.whitehouse.gov/omb/
Don't you think we should wait for the SCOTUS to rule before we guesstimate the future shareholder values?
I think fnma or fmcc may have estimated the value of the warrants in their 2020 Annual Report, I believe...
SO PRESCIENT! Nice reread, he's been telling it like it is for so long now, let's see if the SCOTUS has anything to say, now that the cards are on the table and everyone sees what is going on here!
The "may" argument, that FHFA can enter into the nws because it may benefit the FHFA was considered and rejected by the 5th Circuit EnBanc Panel ruling (as well as by some other judges elsewhere in the federal judiciary). Namely, Congress doesn't hide elephants in mouse holes: "To define FHFA’s statutory authority, we “follow the cardinal rule that
a statute is to be read as a whole, since the meaning of statutory language,
plain or not, depends on context.”125 Emphasis on isolated provisions at the
expense of other, more applicable ones is “hyperliteral and contrary to common
sense.”126 As Learned Hand explained, “[w]ords are not pebbles in alien
juxtaposition; they have only a communal existence.”127 Our analysis proceeds
in three parts: HERA’s plain meaning, its past judicial interpretations
(including FIRREA precedent), and insight from common-law conservatorship."
And this: "The best-interests clause is also consistent with this reading. That
clause, within the incidental-powers provision, authorizes FHFA to “take any
action authorized by this section, which the Agency determines is in the best
interests of the regulated entity or the Agency.”164 Permitting the conservator
to act in its own interest may appear to depart from the traditional view of a
conservator as fiduciary. But the best-interests clause modifies FHFA’s
authority “as conservator or receiver,”165 and it only affects actions that are
otherwise “authorized by this section.”166 So FHFA may pursue its own
interests only within the conservator’s enumerated powers. It may not, for
example, wind down a GSE and jettison receivership protections all in its own
best interests. That would not be “authorized by this section.” Instead, this clause is a modest addition to traditional conservatorship powers. It may
permit related-party transactions that would otherwise be inconsistent with
fiduciary duties.167"
And this: "Neither HERA’s general
powers, implied powers, nor right to act in FHFA’s own best interest is the
kind of “contrary direction” that quells common-law conservatorship.185 A
conservatorship of Fannie Mae or Freddie Mac (here, both) sways an entire
industry. Given the potential effect on markets, firms, and consumers, partial
suggestions are not enough to show that HERA inverted traditional
conservatorship.186 “Conservator” is an old role’s anchor, not a new role’s
banner.187"
So while it is possible that the SCOTUS will say that HERA created a super regulator that can Nationalize private corporations if it "may" be in the FHFA'S interest, it would be creating new precedent that is in conflict with FIRREA, which is what MC and the SBC copied and pasted to use as boilerplate for HERA.
Found this in FY2022 FEDERAL BUDGET ANALYTICAL PERSPECTIVES: "The PSPAs also generally require that Fannie Mae and
Freddie Mac pay quarterly dividends to Treasury, though
the terms governing the amount of those dividends have
changed several times pursuant to agreements between
Treasury and Fannie Mae and Freddie Mac. The most re-
cent changes, announced on January 14, 2021, permit the
GSEs to suspend dividend payments until they achieve
minimum capital levels established by FHFA through
a regulatory framework published in 2020. The Budget
projects those levels will not be reached during the Budget
window and accordingly reflects no dividends through
2031. Through December 31, 2020, the GSEs have paid a
total of $301.0 billion in dividend payments to Treasury
on the senior preferred stock.
The Temporary Payroll Tax Cut Continuation Act of
2011 (Public Law 112–78) required that Fannie Mae and
Freddie Mac increase their annual credit guarantee fees
on single-family mortgage acquisitions between 2012 and
2021 by an average of at least 0.10 percentage point. A
mortgage acquired during this time period will be subject
to the fee while the loan remains outstanding. The Budget
does not assume the fee will apply to loans acquired af-
ter the October 1, 2021 sunset date, but does assume the
fees will apply for the life of the loans acquired prior to
the sunset. The Budget estimates these fees, which are
remitted directly to the Treasury and are not included in
the PSPA amounts, will result in deficit reduction of $25.2
billion from 2022 through 2031.
In addition, effective January 1, 2015 FHFA directed
Fannie Mae and Freddie Mac to set aside 0.042 percent-
age points for each dollar of the unpaid principal balance
of new business purchases (including but not limited to
mortgages purchased for securitization) in each year to
fund several Federal affordable housing programs created
by Housing and Economic Recovery act of 2008, including
the Housing Trust Fund and the Capital Magnet Fund.
The 2022 Budget projects these assessments will gener-
ate $4.4 billion for the affordable housing funds from 2022
through 2031. In addition, though not funded by these as-
sessments, the Budget reflects proposals in the American
Jobs Plan to provide $45 billion for the Housing Trust
Fund and $12 billion for the Capital Magnet Fund over
the Budget window.
Future of the Housing Finance System
Fannie Mae and Freddie Mac are in their twelfth year
of conservatorship, and Congress has not yet enacted leg-
islation to define the GSEs’ long-term role in the housing
finance system. The Administration is committed to housing finance policy that expands fair and equitable access
to homeownership and affordable rental opportunities,
protects taxpayers, and promotes financial stability. The
Administration has a key role in shaping, and a key inter-
est in the outcome of, housing finance reform, and stands
ready to work with Congress in support of these goals
Here's JB'S FY2022, I couldn't find much on Fannie Mae, maybe Nats1 or someone else knows where to look, AT LEAST THE NWS FUNDS SHOULDN'T BE IN THERE: https://www.whitehouse.gov/omb/
"On September 6, 2008, FHFA placed Fannie Mae under Federal
conservatorship in response to the GSEs' declining capital adequacy and
to support the safety and soundness of the GSEs. On the following day,
the U.S. Department of the Treasury entered into a Senior Preferred Stock
Purchase Agreement (PSPA) with Fannie Mae to make investments of up
to $100 billion in senior preferred stock as required to maintain positive
equity. In May 2009, Treasury increased the funding commitments for the
PSPA to $200 billion and in December 2009, Treasury modified the funding
commitments in the PSPA to the greater of $200 billion or $200 billion
plus cumulative net worth deficits experienced during 2010–2012, less any
surplus remaining as of December 31, 2012. Based on the financial results
reported by Fannie Mae as of December 31, 2012, and under the terms of
the PSPA, the cumulative funding commitment cap for Fannie Mae was
set at $233.7 billion. As of March 31, 2021, Fannie Mae had received
$119.8 billion under the PSPA, and had made a total of $181.4 billion in
dividend payments to Treasury on the senior preferred stock. The Budget
continues to reflect the GSEs as non-budgetary entities, though their status
will continue to be reviewed. All of the current Federal assistance being
provided to Fannie Mae, including the PSPA, is shown on-budget. For
additional discussion of Fannie Mae, please see the Analytical Perspectives
volume of the Budget documents."
MC after all is currently one of the most powerful people in gubmint, ACCOUNTABLE TO NO ONE! But that could change as early as Tuesday! Any idea why Kudlow was towing the Financial Establishment party line of keeping the gse status quo of perpetual conservatorship? I think the chances of SM and CP and Kudlow discussing gse reform on his 1 hour program on Fox Biz is next to zero!
I think the Japanese Economy experienced DEFLATION for over 10 YEARS! True when you raise employees salaries it is almost impossible for you to lower them, the problem is THAT BUSINESS CAN'T RAISE PRICES OF THE GOODS OR SERVICES THEY OFFER WITHOUT LOSING SALES! The Federal Reserve DESPERATELY wants to avoid Deflation, Vietnam, Mexico, China, et. al offer CHEAP LABOR (and less regulations) for manufacturing for the 10% to 20% of GDP that goes to buying Goods in this country, and technology tends to lower input costs of goods and services sold.
Listen to Jerome, "We want inflation to run on AVERAGE around 2%", "We expect temporary inflation above 2% during reopening"
Even the housing inflation is unlikely to last, my point is that the Coronavirus Pandemic has ARTIFICIALLY CAUSED PRICES TO SPIKE and we will resume to lower run rates of CPI and PPI numbers possibly as early as the fall as kids go back to school, parents get back to work, and pre pandemic life returns (unless there is a resurgence in Cov19).
https://eyeonhousing.org/2021/05/domestic-sawmill-output-not-keeping-up-with-construction/?_ga=2.111734532.1829333686.1621983635-161492590.1619705315
https://eyeonhousing.org/2021/05/record-numbers-of-builders-report-material-shortages/
WSJ: The soaring lumber costs that have slowed construction of single-family homes are starting to pinch apartment-building developers too.
While many multifamily buildings are made of steel, glass and concrete, wood is also a major component, especially in low- and mid-rise buildings. Wood is also used extensively for floors, cabinets and other fixtures.
As a result, multifamily developers like Greystar Real Estate Partners LLC and Trammell Crow Residential indicated they are experiencing the same sticker shock that is hitting home builders. Even many homeowners are feeling it when they visit their local hardware stores to buy lumber. Prices are near record territory and more than three times what they were at this time last year, according to industry executives.
The cost of softwood lumber, which is often used for framing, is now at a record, up over 83% from this time last year, according to CoStar Advisory Services. Overall, lumber and wood prices are also at record levels, up 34% from one year ago, CoStar said.
Material costs included in new multifamily construction are up 25% to 30% over the past year, according to CoStar. That increase—not just in prices for lumber but for other commodities like fuel, copper and steel—was the largest since at least 1988, CoStar said.
These rising costs threaten to cool down one of the hottest construction sectors since the start of the pandemic. Multifamily construction hit a record level in 2020, thanks to strong rent growth, according to CoStar. For example, suburban rents were up 4% in the first quarter of 2021, CoStar said.
Developers in the middle of projects are worried that if the high material costs persist, they could run out of the money they set aside in budgets to protect against cost overruns. Some are accelerating plans.
"There's actually an incentive for multifamily developers to build quicker than they might because the cost of wood has gone up so much," said Alexander Goldfarb, an analyst with Piper Sandler & Co.
The rising cost of lumber and other commodities could eventually put a damper on new development. "Unless multifamily pricing also jumps enormously, another 12 months of cost growth would heavily impact construction," said Andrew Rybczynski, a CoStar analyst.
Labor costs and rents continue to be the most closely watched factors by multifamily investors assessing the health of the sector. But investors are also keeping an eye on the price of lumber and other materials.
If rents stay constant, said Alexander Snyder, an assistant portfolio manager with real estate owner CenterSquare Investment Management LLC, increased costs are going to weigh on apartment-development returns.
The good news for developers and construction companies is that increased lumber costs are having less of an impact on high-rise development, which has shifted in recent years to new techniques that use less wood. Partition walls that were once wood-framed are now framed with steel studs.
Overall, the U.S. construction business has cooled, thanks to a sharp decline in demand for many commercial property types like office buildings, malls and downtown apartment buildings. As a result, subcontractors are cutting their prices to get more business with any commercial projects that are proceeding, which helps offset the higher cost of lumber prices.
Twelve to 18 months ago, subcontractor margins were about 20% on some projects because the workload was so heavy, said David Askie, director of cost planning at Lendlease. Today margins are more in the 5% range, he said.
"They want the work," Mr. Askie said.
No I agree, there is no valid reason for the government to continue the 12.5+ year temporary conservatorship, and SM OF ALL PEOPLE SHOULD HAVE KNOWN THAT AND ADVISED DJT ACCORDINGLY! But DJT ALWAYS takes up all the oxygen in the room and should have instructed SM to give Mel Watt a phone call and end this Nationalization. But he never did, WHY?
Had SM told DJT, I called Mel and he's good to go with ending the Nationalization, I think DJT would have thought politically his critics would have a field day with it (what do you think Pochantas would say?) and DJT for whatever reason never saw this as an important front burner issue until he was forced to replace Watt.
Someone didn't have the fortitude to get it done in the DJT Administration and we may never know internally what exactly was the reasoning, BUT I do know that 9 people with black robes might have something to say...