"...black swan event..."

Grey, maybe. Should not have come as a surprise to anyone thinking strategically, surely?

"these twits on the telly really upset me, as i cannot reply."

Never stops me ;)

" they did not seem to think it so bad when tsy screwed me out of my close to million bucks, and i had no recourse.

gimmie my money you thieves. "

Yeesh. I'd be pissed off and irritable too. Are you bitter? Try not to be bitter.

That's debatable ;)

No, I don't think so, which was my point.

It seems as though the bill language has been altered, however. An earlier version said this: "Existing obligations of Fannie and Freddie will be placed with the Treasury after the certification date, and the Treasury will continue to collect timely payment of principal and interest as well as the g-fees of the two organizations." (from here: ASF page; you'll want the section by section analysis)

The current version (here) isn't so explicit but also isn't as clear (at least to me).

"I think one can assume that if the support or have positive support for the CW bill, that would include the component that they will be replaced and wound down."

Disagree, unless you're willing to concede that "wound down" means moving them from 90% market share to something a little more reasonable/normal.

The fact that the debate is open and a proposal (silly though it may be) is on the table is positive. It forces people to reveal their alliances, and fosters solid discussion on realistic plans. I don't consider CW to be among that last group, and believe that many others see it for what it is- a straw man.

OK, I give up on this one.

Attention everyone: There is no media spin backed by deep-pocketed vested interests.

In fact, there are no vested interests at all- politicians are solely motivated by an altruistic love of society at large.

Please desist in these meaningless conversations and go back to watching 'Dallas' reruns and checking out KimK's huge tracts of land.

In all seriousness, *none* of the quotes you cited included *any* meaningful attributes unique to the CW bill. My take away is that even the players whose interests are aligned with ours (mine) are happy that the debate of what's going to be done has finally begun in earnest. *None* of them say replacing FnF with the stupidly-named MGIC (are they serious?!) is a good idea.

Do you really think Treasury is going to add 5T to Uncle Sugar's balance sheet?

Regarding the crickets, there's not enough special interest appeal to the Capuano bill to get any airtime. My feeling is that logic, a rock, and a hard place will eventually guide the Powers that Be into accepting something that looks more like Capuano than CW.

Appreciate your input, but I don't think that you can get from A (these quotes) to B (your original statement) via this route.

Demarco:
1) "...there appears to be consensus among policymakers that we need to get private capital back into the market." (like, duh. FnF have 90% market share atm?)

2) "...there does seem to be relatively broad agreement that the Fannie Mae and Freddie Mac model of the past posed systemic risk and ultimately failed." (Emphasis added.)

Joe:
"The [Capuano] bill is so out of line with the consensus in Washington I am sure many there find it laughable."

My opinions are as follows:
1. We can't know what consensus is, since there isn't one. If there were, then this would be easy and the solution would have been on the table years ago.

2. DeMarco can cite consensus all he wants in the manner above. I suspect there may be no small amount of derision behind his remarks; he knows damn well that FnF did not cause the Downturn and also that plenty of idiots do believe that.

3. We're being told daily what consensus is. This is orchestrated spin, plain and simple. Re-read my first point.

Probably some people are laughing at Capuano. I'd wager their understanding of the situation is significantly inferior to my own for a variety of reasons mostly residing with them and not with any advanced understanding on my part. The basic facts are that FnF played little to no role in The Downturn and were political targets of opportunity. Since then, they've gone about their business so successfully that they worked up to near-monopolistic market share dominance. How the he ll are a bunch of politicians who can't even balance a budget going to replace complicated and crucial entities which have embedded themselves in our very financial fabric over decades without completely disrupting the system? Answer: They ain't. Their choices are major disruption or an altered version of the status quo; I know which way I'm betting.

The Capuano bill is the perfect solution; let them laugh.

He speaks strategically; what is the strategy?

"...the consensus in Washington..."

I think we need to be careful of assuming we know what the consensus in Washington is. Certainly the media have been telling us that killing FnF is consensus, but generally those statements are devoid of supporting facts other than the list of the CW sponsors.

Typical self-serving politicians will move with the prevailing wind direction; paid media is trying to make weather IMO.

Who poked the Debil?!

C'mon LD- spill! What's got you so worked up this am?

Corker's motivations...

This came across the google group:

Who's buying Bob Corker?

Highlights:
Number one interest funding: Securities and Investment: $1.1M
Runner up: Real estate: $0.7M
Third Place: Banks and credit: $0.65M

Top 10 organizations funding:
#2: JPMChase. #9: GoldmanSachs.

You can find that information in any one of 258 news stories that came out after Fanny filed their delayed 10Q.

That's only news if you've been living under a rock; FNMA's DTA payment has been known since the Q1 10Q came out, and it took only the most elementary logic to determine that FMCC would be in a similar situation soon.

“The government bullied and coerced...."

That's a beautifully succinct statement of the facts right there...

"POST FNMA WON'T BE LIQUIDATED...."

I'd recommend against following that advice and also against accepting the related analysis. While the outcome HillaryHa is predicting may eventually come to pass, it won't be for the reasons she cites.

The analysis is simply too narrow; the GSEs effectively serve at the will of Congress, and if Congress gets it in their head to wind them down, that's what will happen.

As it was from the beginning, this is hero or zero. This iswhy the prefs are a safer (and more expensive) option- the junior preferred shares are higher in the capital structure and consequently more likely to be paid out in the event of receivership.

Haw... I 'liked' every single one of those comments!

Great post, Rosen. Safety is in the eye of the beholder, no?

Agree- money may not buy happiness, but it will reduce worry which is nearly as good!

"....anytime they want."

Not true, at least not in all cases. FMCKJ for example can only be called in December of 2012, 2017, 2022, etc...

As with all of the prefs, not reading the prospectus can compromise your investment.

The only specific in that article was that Treasury gets the debt; that makes me think that this is a rehash of old information. Bloomberb is a tool of the powerful and I still think Treasury taking the debt is unlikely.

Head fake.

dividend rate

They're all different; you have to read the prospectii.

FMCKJ is a floater with a ~7.75% floor.

Wait a second... what's wrong with Joe's analysis from a factual perspective?

I think it's likely he's right- in the event of a lawsuit speculative shareholders (defined in this context as those who bought after such a warning [and including myself!]) could be excluded.

Not saying this is what will happen, but it sure as h e l l could.

Either way, the fact that Nader is drawing public attention to the situation is good. One way or the other, it will be driven to resolution.

Even if we're going to get killed, I'd rather have that happen within one year vs. dragging on for 10.

Are you a trader, or an investor here?

The traders are getting killed. I think of myself as an investor (hero or zero, baby!) and this swings are just noise.

The dollar volume is low, so the shares are easier to manipulate.

Golly, what do you know?

Details undisclosed...

Citi probably got a good deal for being the first to cross the picket line. Those details were kept from the firms who remain undecided.

Yeah, it could play out just like that. It's certainly a clean solution.

A guy on the googleboard noted that a substantial benefit of the Citi settlement (and those sure to come) is that you can't really argue FnF were at the root of catastrophe when Federal judges are awarding them billions in compensation.

I own both, but dislike bombast.

Yes, we heard you say that last time. Thank you for continuing to show us.

How is it that they are the same again?

Thanks for article!

You can't argue his facts... Positive spin from there makes me feel a little dirty, though.

Who's funding Nader? :)

Unfortunately, I'm dubious anything real can be drawn from the statement that the Administration will release a plan soon. Haven't we heard that for some time now?

"the article from TheStreet said..."

Can you post a link? I looked but couldn't find it.

"Old notes..."

Well done.

Not quite the only reason.

If for some reason your crystal ball isn't correctly tuned and you can't with certainty say that FnF will be returned to shareholders then perhaps you may enjoy the superior position in the capital structure of the company offered by the prefs.

Who is "They" in this context and how are they to know how far the preferred or common can run.

In the event that something unsavory happens, the prefs should be in a better position. I'm not anti common, but posters who come on here and claim that common is better than preferred and offer no factual basis for their analysis are suspect.

Especially if they type in all caps; who doesn't realize by now that's juvenile or rude?

Agree; Corker's proposal is crazy.

No one is going to go for that, and surely he must realize this?

False flag.

This is great!

"The new proposal is expected to build on a suggestion first outlined by DeMarco earlier this month, which called for the creation of a specially-chartered financial institution that would pool capital from shareholders and guarantee principal and interest payments to mortgage-backed securities holders. The model is similar to Fannie and Freddie's pre-conservatorship model, but would likely swap an implicit guarantee for an explicit one or set up government insurance structures to address certain challenges.

The concept, known as the issuer-guarantor model, could also be supplemented with a structured securities-based model advocated by the Bipartisan Policy Center, according to Karen Shaw Petrou, a managing partner at Federal Financial Analytics.

Ed Mills, a financial policy analyst at FBR Capital Markets and former Hill aide, said there are a lot of lawmakers who are very supportive of DeMarco's approach, which also comes at a time when there is growing consensus on both sides of the need for housing finance reform.

"I would expect if there is something introduced, it would track very similarly to what Ed DeMarco is putting into place," said Mills. "All are coalescing around some of the similar ideas of preserving the government's role, preserving the government's guarantee, but transferring a lot of the credit risk from the entity that is providing that guarantee to a form of private capital, or mortgage insurance, or direct infusement of people being willing to guarantee principal interest rate risk.""

I really liked this idea before:

Old post on DeMarco's comments.

Great boat name. Absolutely perfect.

lmao- that one is my favorite.

Yeah, me neither. At the time I bet what I thought I could afford to lose completely with the hopes of a handsome but ungreedy payoff. You envy those who held; I envy those who went all-in.

But not that much! It'll be awesome just to feel smart enough to have seen something not everyone did to have moved on it with some conviction, and, we hope, to eventualy be vindicated.

I would have had I remembered!

Cheers :)

Well, like another poster commented- "If the commons have value, the Prefs are golden."

I hold both (~90% pref though) so either way I'm smiling.

Common Move

A poster on another Pref board I frequent (a google group called 'Freddy and Fanny') said after having read on the prefs a bit, "I hold mostly common, but that was out of ignorance." Probably not at all uncommon that people don't grasp the prefs or even know they exist.