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Now, I am not sure your messages are all that "clear thinking".
The Srs' investment was not in the same line as the Jrs'. It was designed specifically to strangle the companies with the ultimate goal of never let them see the light again. The intent had a very negative undertone to it and it was probably the smartest way to kill the companies without bringing them within the federal books which would have ruined US' credit rating for good.
As fourcents said again and again the fact that the government stayed put gave the companies (and the real estate market) the time to turnaround and only this provided us with a better chance.
I also think DTA's issues are a lot more complex than what they appear to be. A crossing into 79.9% ownership line by the government will instantly kill them. Then, there is the uproar created by AIG when they, in turn, used theirs. BTW, Benmosche on a recent interview on TV touched the subject and repeatedly said "it is the law" when asked about all the questioning surrounding their use of DTAs. DTAs only have value to the extent they can be put to earnings so they won't immediately realize full value.
There was a proposed bill in Congress calling specifically for that, bringing them in for receivership before a short bk/restructuring takes place. Then, letting them out. Can't remember which Senator this bill belongs to but it's out there.
Yes, but I think they never stopped the dividends. Big difference. Correct me if I am wrong.
"a major restructuring of f&f."
"aig"
all this sounds like they may take ff briefly into *real* receivership -as in bk- and let it come out anew and clean. Me not like it. What was the fate of aig's commoners? I believe preferreds never stopped trading so hard to draw a comparison there.
And welcome to the board!
Speaking of Millstein...
don't forget he said the GSEs need to be recapitalized and currently they aren't allowed to do so. If recapitalization must happen in a "big bang" moment what form will this take? Furthermore, if more dilution occurs, what happens to the price of the common and what to the price of the Jrs.?
You really do not believe in this trade.
You think you do. But you sell when prices are high and load up when the stocks get killed. You accommodate your arguments according to how the wind blows, yet you publish a website and scream when nobody wants to organize a shareholder's group with you. You are always in the middle of the river, never getting to any shore, never finishing crossing. Although every now and then you are able to articulate some fine idea, in general, you have no credibility. Up to this point I enjoyed reading some of your posts but now am thinking that the satisfaction was more a thing of finding some dissent within a sea of believers than anything else. Unlike some of us that stay put in spite of our grave doubts, you flip like a pancake. For dissent, I much rather read Kissing messages than yours.
May some of us lose a bunch on this trade? We almost did at least in 2 occasions in the past and perhaps more severely this coming week. But we still hold to what we deeply believe and have been consistent over time.
They could just be replacing employees who have left for the private sector. No way to know.
The real difference between Jrs and commons is the speed at which they can appreciate -provided they one day do so-. An announcement of an exit plan that may include paying preferreds or reinstating their dividends at a future date could quickly shoot the price of preferreds closer to face value. It doesn't matter if commons have unlimited upside if that takes an eternity.
I like the way you think.
Kissing,
what is your rationale for holding?
I understand you believe there may be a plan to pay preferreds upon some tentative exit from -according to you- receivership. Yet, you are consciously aware this could be a disastrous bet. And also give that a high chance of happening.
What are the assumptions behind a "plan to pay preferreds"? Trying to pick your brain :)
I was going into the weekend a little nervous. But after reading taint's message I think I'll just relax and enjoy...
The panel is lead by
Mel Martinez, ex HUD secretary under President George W. Bush
Henry G. Cisneros ex HUD secretary under President Bill Clinton
Former Democratic Senator George J. Mitchell
Former Republican Senator Christopher “Kit” Bond
Any input into their thinking?
The commission’s recommendations will echo plans put forward by
* The Mortgage Bankers Association
* The Housing Policy Council,
* Researchers at the Federal Reserve Bank of New York and
* Jim Millstein
What will come out of all this?
Agree. Looks more like congressmen fetching a few, here and there...
Ah... what? you mean 1 million nickels don't fit inside your pockets? Let's see...
5.0 grams each nickel coin.
1 million = 5,000 kilos (5 tons)
mmhh. That is quite more than any car!
I may be mistaken but I think I have seen him saying this in an interview doing his best to sound smart. In front of a big audience. Will see if I find the video in youtube.
Of course, if inflation skyrockets so does the price of nickel or whatever metals they are made of. But so will the gas used for transportation, the energy required to melt them, etc. So much for a hedge.
...but then you incur costs and could end up losing money. Not to mention the cost of transporting millions of nickels. Brilliant Bass.
Something wrong with the math... just the big blocks amount to 15+ mill alone. Let's see
15:18 6.08 mill
15:20 2 mill
15:37 3.5 mill
15:40 3.5 mill
Then, there were nice size trades scattered all over the place. Chunks of 60/70ks. Prices looked firm. Weird.
Glad to hear you liked Chocolada. The swap for the foreclosure sounds like a great opportunity. I hope it goes through. I like coconut grove a lot. Midtown has been revamped in recent years with some mild success. WholeFoods didn't want to be there though. They said not enough high-income earners... But its closer to a more bohemian/artistic part of Miami, north of midtown. No South Beach? Anyway, don't leave without tasting a colada and some cuban food... anything with black beans and rice. I am still not sure if coladas are a caffeine rush or a sugar rush, haha.
Why would the stock market collapse? I know this is common wisdom for the fiscal fiasco and an almost expected knee jerk reaction like in 2010, 2011 and mildly in 2012. But you have Japan skyrocketing, China recovering, Europe not collapsing and the dollar strengthening, not to mention domestic market forces contributing to financial strength. A sequester might only make the dollar stronger. Commodities and most industrial raw materials will either stay put or deflate. Perhaps the markets will like this.
Do some of you guys get to read the "Time and Sales" sheet? Looking at the details of the trades they look more like selling than anything else. I do not like when those large blocks go for the bid and a few minutes later the bid & ask are raised on minimal trades of 100 shares. Sometimes -and I have to fight my own feelings- I think someone is unloading while buying peanut-trades to keep prices as high as possible.
Looking at all trades in both preferreds I do not like them. Now, on a weekly basis charts indicate huge up volume. But that doesn't tell the story. On FNMAS two trades -one of 5 mill and another of 6 mill- were at the lowest bid. And there appears to be a 3rd trade of 1.5 mill split on 5 smaller trades also at a lower bid.
There is certainly a lot of foreign demand. Not only Brazil but also Argentina and Venezuela. And plenty if not more coming from eastern Europe... Slovakia, Romania, Russia, etc. Lots of russians. But that has been going on for a while. I think it could be a good time to sell in that you will find buyers quickly. What I cannot say is if the market will get even stronger down the road. But this is where I live. I do not have specifics for Hollywood, FL.
I was there just a few days ago taking my son to the DiMaggio Children's Hospital. Hollywood has to be one of the most interesting areas in the vicinity of Miami. Hollywood Blvd is really nice and has a lot of action at night. Have you been to Chocolada? Every time I visit Hollywood I make some spare time to stop there or some other neat restaurant. Sometimes I visit "Emile" if I have a jacket or suit that needs to be fixed. He is an old-school tailor south of Hwood. Chocolada is a bakery worth trying. I am under the impression Hollywood has a great community, that "old-family-residential-neighborhood" feeling that has been lost in most areas here. Let me know if you need assistance when visiting.
Another Millstein article.
http://www.bloomberg.com/news/2012-11-28/u-s-mortgage-backer-role-grows-as-fiscal-talks-delay-fix.html
It is old, but not much. Here he explains a little bit more his concept of FF being nationalized.
My interpretation of what he said -together with his past discourse- was more a critic to the government than anything else. In other words, he is still carrying the flag of "make them smaller" and once they are no longer a threat, restructure and privatize. The ole' AIG solution that *could* favor us.
Perhaps he is still pushing for an exit strategy that involves conversion of Srs (no redemption), exercising warrants and then selling chunks of common in the public market. But I am not too smart and may be missing something.
"declared AND unpaid dividends"
It is my understanding the board never declared dividends so it does not matter they have not been paid. Declaring them comes first. There are none!
No problem, ski.
I thought you had me on ignore.. oh well. Here is the link:
http://www.americanbanker.com/issues/178_23/crapo-urges-bipartisanship-but-stands-tough-on-cfpb-fight-1056404-1.html
Subscription only. I think subscription is free. If you aren't or don't want to subscribe the interview is here:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=84239498
Four
don't make it so obvious he has me on ignore lol. Of course he cannot find it anywhere. I am invisible to him!
Crapo is your friend indeed:
"Regulatory Reform — Along with comprehensive tax reform, removing unnecessary restrictions on capital formation and reducing regulatory overreach can help expand economic activity and American job growth by making it easier to turn ideas into successful businesses and making it easier for small businesses to remain successful and grow while maintaining important protections for consumers and investors"
Taint...
That issue attracted new attention after a federal appeals court last month overruled several recess appointments President Obama made to the National Labor Relations Board on the same day as CFPB Director Richard Cordray's initial appointment. That opens the door to a legal challenge of Cordray at the same time that he has been re-nominated for the position.
Crapo, who is assuming the role of ranking member from Sen. Richard Shelby, said in an interview last week that he, like many of his GOP colleagues, will continue to object to Cordray's confirmation until changes are made to the structure of the agency. That includes replacing its single director with a commission, a change the Idaho Republican unexpectedly said is needed at the Office of the Comptroller of the Currency as well.
During the interview, Crapo also discussed his other plans for this year, including housing finance reform and tackling changes to the Dodd-Frank Act.
What are your top priorities?
There's a broad array of issues, but I think they could be summarized in terms of focusing on Dodd-Frank related issues both in terms of oversight of the regulatory process of implementation that's ongoing right now and second, GSE reform. Obviously Fannie and Freddie — how can we take them out of receivership and move to the right structure for the GSEs?
And then finally I'm very interesting in capital formation — looking at issues that currently restrict capital formation and access to capital, and focusing on ways to look at not just addressing the hurdles we face but trying to create some on-ramps or other increased efforts to help facilitate capital formation.
What's your goal line on some of those priorities? What would an ideal outcome look like?
I was one of the very strong opponents of Dodd-Frank, so I think personally there should be significant revision of major portions of it. But I recognize in the political climate we have right now, particularly with Democrats in the majority of the Senate and the Republicans in the minority, we need to find those places where we can get common ground and build bipartisan solutions.
The Banking Committee has a long, historical tradition of working together in a bipartisan fashion, and that's fallen apart in the last couple of Congresses, just as it has in all of the other aspects of the operations of the Senate. But I also have a personal friendship and good working relationship with Chairman [Tim] Johnson, so another one of my major objectives and hopes would be to start building a path towards bipartisan solutions again and get the Banking Committee back on track with commonsense bipartisan solutions to issues.
In that context, I think there's a lot of potential in the Dodd-Frank regulatory arena for us to do that. … I think whether it's looking at the rules in many different areas, the implementation of the qualified residential mortgage rules or the mutual fund rules or any other number of rules, I think there's room for oversight of what the agencies are doing in implementation to help get better coordination and higher levels of cost-benefit analysis.
On the legislative front, there's also room. A very good example there is in the derivatives title, where I think it's very clear that Congress did not intend for the derivatives title to apply to end users — that they should have been exempted. I've been pushing legislation on that since the passage of Dodd-Frank. Legislation to accomplish that has passed the House with a vote of 370-24. We need to get to something like that where there's a broad bipartisan basis, and there is broad bipartisan support for that kind of reform in the Senate, where we can find areas where either the congressional intent is not ultimately being played out in the regulatory arena or where there needs to be some fine tuning of Dodd-Frank in order to improve its operation.
What direction would you ideally like to take GSE reform, and in the spirit of bipartisanship, where in any of that can there be a compromise?
Since we haven't gotten too far down that road either at the legislative level or even in negotiations with the White House — I was hoping that during the last Congress we would get much more deeply into the issue than we have — but since those negotiations haven't proceeded far enough yet, it's hard for me to say where we might ultimately be able to end up.
First of all, I think we should not continue with the receivership that we still have. My personal approach would be to move as far as we possibly can into a private sector solution. I think that the capital for the mortgage industry should come from the private sector to maximum extent possible, and that specifically the risk imposed on the taxpayers by Fannie and Freddie should be managed and ultimately eliminated.
What do you think some of the biggest challenges will be both for the committee and for you as a new leader?
I guess I wouldn't call it a challenge, but one of the biggest opportunities that the committee should take on is a return to the historical bipartisan operations that they have had in the past. …
Now clearly, there are going to be areas where we don't agree. One of the current ones is the CFPB, and those issues we're going to have to work through. But even on those kinds of tough issues I think that there may be some kind of room to find some bipartisan progress to move forward.
That being said, I think the specific answer… it would be the kind of things we've already talked about. And I omitted FHA reform, which should be put right into the mix and maybe even earlier than later. But focusing on things like Dodd-Frank implementation and oversight, reform in areas of Dodd-Frank where we can find the common ground to move forward, reform of the GSEs and reform of FHA are some of the key areas for us to focus on.
Speaking of the CFPB, do you think that Cordray is qualified to be its director on the merits?
I don't personally have an objection, and I don't think the issue is Cordray. There's been a high level of concern in many quarters about whoever the director of the CFPB would be. And I think at this point Richard Cordray has — not entirely but to a significant extent — reduced some of the concerns about how aggressive he would be and where he would take the agency.
So to that extent, I would answer your question by saying that my comments about what we should do are not related to what we should do personally about Richard Cordray himself. My comments are related to the structure of the agency and the constitutional issue relating to the separation of powers between the Senate's right to advise and consent and the President's right to nominate.
I object to the Senate's confirmation of any nominee to the CFPB until we have reformed and addressed the key issues relating to it that are so problematic. … One is the agency was set up with one individual controlling all of the power and authority. No commission, no governing board like in the other regulatory agencies. One individual can issue the rules and dictate the activities of the agency. … The second is the funding, and I personally believe that Congress should have oversight of these agencies and in particular the CFPB.
So would you want to see the OCC with a similar commission structure? It also just has a single director.
Yes, I would. I really believe we should have the kind of operations like you see with the SEC, where they operate with a board. First of all, it brings in additional points of view, but it also requires the collaboration from different perspectives that helps you get to the right solution, rather than just having one individual be able to dictate the entire activity.
What do you say to people who argue that these objections are basically a way to re-litigate Dodd-Frank, essentially taking nominees as "hostages" as some have called it?
I've heard that argument made, but frankly I don't think that's an accurate or appropriate way to view the process. It's very common for the Senate to withhold its confirmation or its advice and consent until concerns that it has with the agency itself are addressed. We recently saw that in terms of Sen. Corker's objection to Carol Galante at the FHA where he was very concerned, and properly so, with FHA reforms that ought to be done. If one were to go back to all the confirmation hearings of people who were brought before the Senate, I think it would be the standard, rather than the exception, to see senators inquiring of the person who is nominated to say, "Here are issues we have with the agency that you are being proposed to the lead. Are you willing to work on these issues … to address our concerns?"
But has it gotten to this point before, where it's led to the inability to get anyone confirmed?
I'm certain that it has. I know there are examples where nominees are held up until issues that the Congress, and particularly the Senate, have with the agency are addressed. And in fact I think that's a very appropriate function of the Senate. We've got to get this agency established and managed in the right fashion before we just go ahead with the implementation of the advice and consent process.
How do you go forward from here?
There should be a way to move forward and I hope that there will be. But I think it's very important that what we understand here is first, the issue is not specific to this particular nominee Richard Cordray. The issue is specific to the Constitution and the question of whether the Senate has the right to advise and consent to a properly nominated candidate. And then secondly … the structural issues of how we establish and operate the agency. … And I believe that there is a way to accomplish that. Whether we'll get there is another question, but that's an area where I really believe we can move forward.
Who says we weren't buying the t-fud index that day on September? Good deal!
"$1000 invested in CSCO in Feb 2000 at $62 pps is now worth $331."
Whenever you invest at the peak you are more likely to see no return. Go back 10 years and make that same trade on csco AND count the 8 stock splits.
I think that true capitalism requires every few generations that a creative destruction takes place to clean up the landscape of excesses -removing what serves no purpose anymore- while paving the way for a renewed wave of progress, times larger than the one before. So more and new people can benefit and prosper.
But that is the long take... the short one is one full of injustices (bonuses) and pain (loss of homes). Or at least it feels that ruthless.
And I speak as one who was deeply hurt by the 2008 debacle.
Net outstanding up to date by ProPublica. Interesting link:
http://projects.propublica.org/bailout/list
Fannie -$87,688,000,000
Freddie -$49,390,000,000
Both -$137,078,000,000
taint, and what do you think is Obama agenda? Burying it to the GOP means no privatization? Not even a Millstein exit strategy?
I think JoeStocks underestimates politicos unless they are in the business of losing votes. R will create waves and disruption at a time when markets are stabilizing. Full redemption may have been suicide before the election. The same could be said of a receiverhip today.
On the other hand, a Tsy secretary might do better eliminating the only source of competition that is has for its own funding.
Just heard on NPR that the funds will be used to help homeowners. I could be wrong but it appears none of this goes directly to Fannie nor the Treasury. It might be fair though.
Option 2) is probably beyond what is likely.
Given the history of this government's bailouts they will not stretch their exit strategy to the point they make a huge profit. As in the past, they might exit with *just enough* profit to justify their interventionist policy. Provided they decide to sell the warrants.
Bad real estate market is not what was holding them down. So better prospects are not helping.
Yes, the claims are locked and cannot be bought nor sold. The shares instead I sold them a while back after the split. I have none now but used to have a little less than a million pre-split.
Rosen is part of my last name. They gave me crap at the yahoo board for the same reason a year or two ago when I first bought into wamuq and -like now here- asked my first question.
Thanks to both.