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Easy, convert common to pref, move up the capital structure - you will triple your common shares when the conversion comes
My 2 cents
Complete nonsense, the FDA has not approved the use of the malaria drug for CV-19, so governors do not need to "ban" it -- that use is technically "illegal" already
British PM Johnson moved to ICU
Anybody still thinking this is no big deal?
You also really have to worry about President Trump, he is a high risk category...
MBA is lobbying like mad today -- shame they re advocating for the REVERSE of what they advocated for over many years...
QUESTION: "Let private firms take losses?"
David STEVENS ANSWER: "Let OTHER PEOPLE'S firms take losses, but NOT our MBA folks"
Laughable...
MBA lost their seat at the table... though maybe they already lost any influence at Treasury, they had it somewhere in administration. But that looks like it is gone now.
Mnuchin has set it up so MBA has to beg and whine for a bailout, so now they have lost all credibility -- a genius move imho
PLUS Mnuchin and Calabria can now come back, after the crisis, and crush the MBA arguments against RnR cos now MBA is asking for bailouts and we see THEIR worldview was badly mistaken... Beautiful stuff
MBA-friend Chris Whalen takes Calabria out to the woodshed in this peice:
https://www.theinstitutionalriskanalyst.com/post/calabria-s-fhfa-fans-the-fires-of-contagion
A couple of tidbits:
"Mr. Calabria loves talking to the media, you see.
Calabria’s ill-considered comments made many people in the mortgage industry question the judgment and state of mind of the FHFA head."
"As one leading mortgage industry CEO told us on Friday: “No action IS an action. Calabria is turning into the caricature people feared if/when a crisis hit.”"
This is all true, but we see Whalen's real problem with Calabria:
"The failure of the FHFA to allow the GSEs to provide liquidity support to servicers of conventional loans is not only threatening the solvency of mortgage firms and smaller banks, but it is also negatively impacting the new issue market for MBS."
So, Calabria, in a prudent move, won't prematurely bail out Whalen's friends and clients - THAT is why Whalen is really going nuts... hoist by one's own petard or what? You have to laugh as Whalen and Stevens do a backflip on bailouts and private firms taking their medicine in losses... losses are for OTHER PEOPLE'S firms LOL
Gets pretty clear when Whalen tells us:
"Of course, Director Calabria claims to be concerned about “protecting the taxpayer,” but his actions say quite the opposite. It’s almost as though Calabria was intentionally trying to make things worse in the mortgage finance sector. The collapse of the agency mortgage market is a far greater danger than any short-term losses the GSEs may absorb."
Far greater danger to MBA and Whalen's benefactors -- so "Mark" is now a naughty boy for acting in the way Whalen himself has been advocating, and for over a decade! Hysterical stuff.
Get the conclusion, talk about desperate (you can you hear the clients in the background screaming at Whalen over the phone that they are going bust):
"President Donald Trump needs to remove Director Calabria from his position at the FHFA forthwith and direct the Treasury to take control of the GSEs. We must get Fannie May and Freddie Mac into the fight to save the conventional mortgage market – and the US financial system – from a serious and unnecessary crisis. And we must act quickly because the opening of trading in the US bond market is likely to be messy on Monday."
To paraphrase "Save the MBA!" Lol, let them swing, I say...
Guido, the plaintiffs did NOT agree to many of the extensions and delays in DISCOVERY. I have been here quite some time and remember that Sweeney let the government drag out the discovery process amazingly... Sorry you are wrong
Amelia, well you are right.
And it seems pretty obvious nothing good can happen during the crisis -- though *perhaps* nothing bad either. (Though they could do another bailout and eliminate private holders which essentially preserves status quo without mortgage market caring imho)
So stasis till July, or probably November... and I don't trust Calabria.
PLUS What if Trump has a heart attack, or dies of CV, and you get President Pence -- he has no obligations to campaign backers and is party-line Republican and anti-GSE...
Way, way, too many risks near term, with no positive triggers -- SOOOO dead money
lol -- Guido, Judge Sweeney is the Chief Judge of the Federal Court of Claims, she has quite a lot of power to DENY government requests for extensions etc. She did not do that.
For whatever reasons, Sweeney never expedited the discovery process over MANY years.
Now she is actually pressing - a tiny little bit - but to characterize as having done anything but drag her feet is disingenuous. And I know she said it was not her fault in recent transcripts, but she has powers to deny/compell which she never used...
lol, the triple trains is a known kiss of death...
I am impressed Judge Sweeney is still working, she was pretty inactive when we lacked the plague, but apparently she works through the Black Death? Who would have guessed.
I just do not see anything happening here till at least July, so it is dead money -- and when the Dow crashes again it will take FnF for a ride too imho.
Yes, the volatility is amazing... The mReits I follow are just crazy this last week, and that is just one group
Yup, and some short squeezes on the greedier shorts on top, Tanger running 26% today, Macys moving nicely...
I may sell and rebuy later
There goes the June "Hail Mary pass" from Selia law... so here is my take on the options here, roughly framed:
OPTIMISTIC OPTIONS -- SUPER GOOD OPTION: Looking at this from a timeline view, take the optimistic view that Mnuchin will use the crisis to push through RnR of FnF as the standard approach to be taken in this round of the bailout, ie for the airlines etc.
But there is no way they can do the RnR till we are away from the panic -- you do not want to panic mortgage market any further than it is right now (it is already shitting the bed) -- so any positive moves on RnR don't come for a few months, so the Summer
One stone in the shoe is that Mr.Two Weeks STILL has not released a capital rule, and that only happens in May, comment period finishes in July, so THEN they can release final rule AFTER July.
So from July on, they can do BIG BANG of SPSA amendment, consent decree, legal settlement, conversion, RnR details... maybe they wait till after Nov election and do it all then
No positive action BEFORE JULY/AUGUST, nothing is happening before then imho, and they are all busy putting out fires
PESSIMISTIC OPTIONS -- decreasing degrees of likeliehood imho
WEASEL WINS OPTION: Calabria sees the writing on the wall for the Trump cabal, so decides to assure his future in the TBTF lobbying industry by DELAYING (ie killing) the capital rule and hence nixing the RnR we all know Calabria (and his mentors/benefactors) ideologically and financially opposes -- hence another delay in May KILLS RnR (or he loads the capital rule to kill viability of RnR)... So potential negative in May
STASIS (NO GUTS) OPTION: Maybe Trump, Mnuchin and Calabria just decide they have done SO much on bailout front -- and take so much shit for it (yes, that will come as it always does) -- that they decide it is not politically possible even after the election to do RnR
SHAREHOLDER WOODCHIPPER (DON'T LET A CRISIS GO TO WASTE) OPTION: The only option that could happen short term, after 12 weeks, and before July capital rule finalization, then administration could claim another bailout is needed and wipe out the private holders (common and pref) on some new agreement with FHFA director Calabria... That does not fit with the pref-holders who back Trump's election campaigns, but Trump has thrown a lot of people under the bus --
The pessimistic options can all come about BEFORE May or July, whereas it looks to be like the optimistic option comes live AFTER July and maybe only November -- so I am staying away till we at least see a capital rule released (and what it SAYS) and maybe till July and a finalized rule... Potential events only look negative before the summer, thereafter we may see positive events
So I am convinced not to buy back in even t increasingly good prices in prefs -- but you can now see why the prices are going down especially given the massive opportunities to use that money elsewhere in the market
yes, f them royally -- they brought all of this on us and themselves
brooge, sorry to hear that, hope it was not bad
I think you will be able to get back in cheaper tbh - 1-2 weeks
One cheery thing is watching the MBA crowd eat their own medicine of "private holders take losses" -- well here we are and Michael Bright, David Stevens, and Christopher Whalen apparently all socialists now...
Seeing Whalen and Stevens cry has been a guilty pleasure
I would let them grind lower to they re really desperate, then give them liquidity for 80% of the companies in warrants and a no lobbying clause in the contract
Actually, if I was Mnuchin I would let half of them fold...
he is also getting screwed too -- him and Glenn taking a beating every day on their prefs
5% a day, like clockwork
I expect those decreases to go up now the "bailout" narrative is live
and he is rude
Stinkie, I was out in the garden today, lovely sunshine -- cut my raspberries back and going to move some new pear trees tomorrow... I have finished buying for now. I will just ignore the market and chill for a couple of weeks...
BTW I m old school, diluted bleach on everything (ruined two pairs of jeans already lol) - the smell reminds me of school... Happy days
Stinkie, why you say that? Started going down in WA nd CA, but still ramping in NY
Plus the numbskull governors in GA and FL have gauranteed massive outbreaks there
But six weeks does seem long time...
New Bailout Narrative gonna bleed the SP...
The real worry that administration does away with ALL private holders amps up the pressure here -- we know what skulduggery they are capable of and we know judges see a "crisis" so let all kinds of shit slide
Not saying it happens, but the risk is going to amp over the nest few weeks, I think we see the recent lows in common and preffered
GOOOALLL! Thanks, some beautiful goals to start the day...
I love Liverpool so much, nice to remember how much fun they are -- never walk alone, baby...
Good, make it used $1 bills, since I need all the trucks I can to push that oil price up...
Trump started the ball rolling and now we have a confirmed OPEC+ meeting Monday - watch the US oil producers meeting Trump today offer up production cuts, too
BTW The trucks will start out, but they will never reach the FnF vault... my prediction
Is FnF a cargo firm now? interesting...
Do you trust Mnuchin and Calabria (and Trump) to RnR? Or instead send private holders to the wood-chipper?
Curious to see whether hedge-funds start dumping prefs or not...
Golf, I thought people interested in FnF would be deep value contrarian investors like myself -- but I guess not.
Do you know who Ron Johnson is? He is the clown Ackman put in charge of JC Penney to bring a new retail -- and he killed it. Cos Ron Johnson does not know anything about retail... he is a glorified interior designer. Does it take a genius to sell Apple products? Apparently not, cos he could not sell at JCP and Ackman fired him... I won't be listening to Ron Johnson.
Steven Tanger is worth listening to, so too are the analyses of the Macy's real estate holdings, but also their online sales and BlueMercury growth.
I made good money last time around on the "death of the mall" BS, this time CV gave us some spectacular values -- going into MAC next if she gets down to $4's too, though less of a position cos it is a little riskier
BTW Rather than finding the conspiracy in these words, maybe take em at face value? Or not, whatever :)...
FnF were the only decent trade in an over-priced market, the market is not over-priced now so Calabria can kiss my ass -- especially if he thinks we cough up some cash for RnR
So glad I don;t have to listen to Mark Calabria lying through his teeth any more, since I got rid of my investment here -- I track a little to see whether there is any opportunity here.
Spent yesterday evening listening to Steven Tanger -- careful to say only what he knows and only what he can deliver. Careful to say he cannot answer certain questions since he cannot be sure of the answer.
Tanger is just a private CEO, yet the regulator of FHFA just blabbers inconsistent crap all over the place, saying one thing one day, something else another, and missing his OWN deadlines one after another...
A little distance and one can only say Calabria looks very, very much in over his head -- over-promoted, badly inexperience and missing a whole bunch of necessary skills for the post... The regulator is going to be a problem that private investors in an RnR will want to hear some answers about -- but maybe that is Calabria's game?
Navy, this has been ongoing for a while now. The non-agency mReits are blowing up from margin calls. The agency mReits (NLY, AGNC, ORC) are steady now the Fed is buying agency stuff... All these mReits are too murky for me, tho...
Donotunderstand, I have been following Macy's for a few years.
The real estate alone is worth multiple of present price, and Macy's makes a profit - plus BlueMercury is a hit
Very happy to buy Macy's t these levels - and lower. Same for SKT. No chance of BK...
Brooge, I hope it goes lower, only half way into my position!
I like Tanger more, rock solid company and the 48% short position is going to squeeze at some point
Good luck to you, my friend
Here is a little sunshine...
Macy's on sale today - $4.60
Tanger also on sale -- $4.20
I bought a little of both today, buying in by increments. I like both, and I love Tanger at this price (it has a 48% short interest lol)
Navy, the politics makes it impossible to shorten imho, any politician who shortens etc then gets saddled with any "extra" deaths -- just cannot take the political risk. (Look at Boris Johnson in the UK, caved like a deck of cards...)
Going to be very hard to back on the April 30 date -- but I agree we then need to transition to a different approach. Let us hope our leadership has the sense to be planning for a different strategy right now...
All the house purchases are shutting down -- how do you move in the lockdown?
Lots of re-fi's going forward, still, but mortgage origination is finished for a couple of months basically
Boom? Little steps and then we open RED... I think you will see a wave of selling today in various areas -- the lockdown till April 30th hits lots of businesses
Going to be a bloody red week imho
Penny, yeah, if it gets to the $3's I will be a heavy buyer -- with the backstop of the real estate, plus was making a profit in stores and online before the virus this really is one that will survive...
I agree on waiting. The virus numbers are ramping-up, then you will get talk of a longer shutdown -- and that may really tank the prices of retailers. So I think waiting is the move.
See if we get so low to $3, let alone $2's, best Potty
Mike, hope it works for you
Do the same for some other stocks too -,other great bargains out there too.
Best potty
Yeah, trading is the way to go, these 20% swings are manna from heaven...
Good luck my friend, may you catch many swings!
The politics of bail-outs (and windfalls)
One quick thought. Seeing the biggest bailout program in history. Do you think people will be open to "windfalls" and reform AFTER this? And when the dust settles on CV?
I think everything got very, very muddy on the politics of RnR, sadly.
Just quick observation
Someone trying to flush the chickens from the coop.. to steal all the eggs? or cos the big bad wolf is coming?
$2 for a $25 pref is steep. Even if Trump is turned out, then still got Sweeney, Lamberth and Collins with Judge Atlas to fall back on... not sure Groshens has any expertise assessing legal cases...
Amelia, jump! The water is great... Tons of good stocks on sale, and a possible V shape if the virus can be contained... versus waiting on government constipation which eventually explodes in a sea of...
Good luck
Fence, you didn't get it last year, so be careful not to get it now....