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CMDR, thanks for the link! GSE talk starts at the 1:39 mark.
CNBC: We are sill trying to understand some things, in terms of changing the conservatorship, changing the sweep, changing basically what's going on with and FnF. What do have planned here and are we going to see those plans soon?
Cohn: So the GSE reform is definitely on our agenda. TS-D, Steve Mnuchin, has been spending a lot of time working on that. Once he gets approved and confirmed, Steve will be taking that on as his early priorities. So we definitely have some plans in place to work on that and hopefully he gets approved as soon as possible.
Gotcha. I agree if DeVos not getting in helps Mnuchin get in I'm all for that. If she gets 50 votes, Pence will make it 51 then to get her in.
Gary Cohn on CNBC right now.
There are 100 Senators. 46=D, 2=I, 52=R
All Dems & Ind. voted NO = 48
All Reps voted YES = 51 (with Sessions - Rep. not voting)
Alphabetical by Senator Name
Alexander (R-TN), Yea
Baldwin (D-WI), Nay
Barrasso (R-WY), Yea
Bennet (D-CO), Nay
Blumenthal (D-CT), Nay
Blunt (R-MO), Yea
Booker (D-NJ), Nay
Boozman (R-AR), Yea
Brown (D-OH), Nay
Burr (R-NC), Yea
Cantwell (D-WA), Nay
Capito (R-WV), Yea
Cardin (D-MD), Nay
Carper (D-DE), Nay
Casey (D-PA), Nay
Cassidy (R-LA), Yea
Cochran (R-MS), Yea
Collins (R-ME), Yea
Coons (D-DE), Nay
Corker (R-TN), Yea
Cornyn (R-TX), Yea
Cortez Masto (D-NV), Nay
Cotton (R-AR), Yea
Crapo (R-ID), Yea
Cruz (R-TX), Yea
Daines (R-MT), Yea
Donnelly (D-IN), Nay
Duckworth (D-IL), Nay
Durbin (D-IL), Nay
Enzi (R-WY), Yea
Ernst (R-IA), Yea
Feinstein (D-CA), Nay
Fischer (R-NE), Yea
Flake (R-AZ), Yea
Franken (D-MN), Nay
Gardner (R-CO), Yea
Gillibrand (D-NY), Nay
Graham (R-SC), Yea
Grassley (R-IA), Yea
Harris (D-CA), Nay
Hassan (D-NH), Nay
Hatch (R-UT), Yea
Heinrich (D-NM), Nay
Heitkamp (D-ND), Nay
Heller (R-NV), Yea
Hirono (D-HI), Nay
Hoeven (R-ND), Yea
Inhofe (R-OK), Yea
Isakson (R-GA), Yea
Johnson (R-WI), Yea
Kaine (D-VA), Nay
Kennedy (R-LA), Yea
King (I-ME), Nay
Klobuchar (D-MN), Nay
Lankford (R-OK), Yea
Leahy (D-VT), Nay
Lee (R-UT), Yea
Manchin (D-WV), Nay
Markey (D-MA), Nay
McCain (R-AZ), Yea
McCaskill (D-MO), Nay
McConnell (R-KY), Yea
Menendez (D-NJ), Nay
Merkley (D-OR), Nay
Moran (R-KS), Yea
Murkowski (R-AK), Yea
Murphy (D-CT), Nay
Murray (D-WA), Nay
Nelson (D-FL), Nay
Paul (R-KY), Yea
Perdue (R-GA), Yea
Peters (D-MI), Nay
Portman (R-OH), Yea
Reed (D-RI), Nay
Risch (R-ID), Yea
Roberts (R-KS), Yea
Rounds (R-SD), Yea
Rubio (R-FL), Yea
Sanders (I-VT), Nay
Sasse (R-NE), Yea
Schatz (D-HI), Nay
Schumer (D-NY), Nay
Scott (R-SC), Yea
Sessions (R-AL), Not Voting
Shaheen (D-NH), Nay
Shelby (R-AL), Yea
Stabenow (D-MI), Nay
Sullivan (R-AK), Yea
Tester (D-MT), Nay
Thune (R-SD), Yea
Tillis (R-NC), Yea
Toomey (R-PA), Yea
Udall (D-NM), Nay
Van Hollen (D-MD), Nay
Warner (D-VA), Nay
Warren (D-MA), Nay
Whitehouse (D-RI), Nay
Wicker (R-MS), Yea
Wyden (D-OR), Nay
Young (R-IN), Yea
Yea - Nay , 51-49. The Yea's have it!
If yesterday's Senate Floor events are any guideline, and I think they are, the Mnuchin vote (as well as others) will most likely happen this evening, sometime after 4pm.
I still don't trust Corker, Warner, Crap-o or Shelby. I wouldn't be surprised if they get some poor junior Senator to do their dirty work though.
Senate committee votes to confirm Sessions - 11 yay, 9 no. Next, on to the Senate floor vote.
Stick around FNMA/FMCC L2 long enough and it won't surprise you at all. I've seen it much crazier than that over the years. Try following it on days where it swings more than a dollar with share volumes over 50 million. L2 is lit up like Christmas tree on the fritz....quite the show, actually.
Slob, can you please provide the proof you have (I missed it somewhere) Crapo "and his family and friends held a Major Short position for a long long long time."
I would be glad to send it to the proper authorities. It would help our cause greatly.
TIA
There still may be more coming today. Opinions are usually released at the same time, but this past Tuesday (1/24) one was released, and then within the next 45 minutes three (3) more were released. Unusual for the USCA-DC, but it did happen.
Well, Blue did show back up today....
Somebody knows somethin'.....
Bam - that one meeting Ackman had with Trump took place over 20 years ago and it was about the Rock Center building deal (didn't work out), not the GSEs. When Ackman stated that in an interview last Nov. (I watched it live), somehow on this board, it became "he just recently met with Trump and has another meeting set up".
I'm not saying Ackman won't be able to meet with Trump and discuss the GSEs with him at some point, but from the interview I saw, they appear to be mere acquaintances at best. I do trust Ackman's position, thru six degrees of separation, will at least be heard with top Admin.
Thanks again for all of the important news you add here!
I believe it's good news for shareholders.
To unpack this a little more, I'm very encouraged by this specific statement....
"With Fannie Mae and Freddie Mac both in conservatorship it is difficult to articulate their long-term role within our housing finance policy."
I read that sentence to say, we must first get them out of conservatorship before we can assess what future role they will play within housing finance policy.
Anyone have any thoughts on this?
Thanks for the link that proves Steven Mnuchin never said (as you say)...we will get Fannie and Freddie done in the first 90 days.
You are confusing his comment about tax reform (in the first 90 days) with Fannie and Freddie (reasonably fast).
You did not quote Mnuchin saying they will get this done as one of their top priorities in the first 90 days in office.
Stockman, you might be typing what you want to hear. Mnuchin never said "in the first 90 days in office". He did indeed say "will get it done reasonably fast".
I agree, MRJ25. Also, it's really hard to sell the idea of eliminating (stealing) companies unless they're in "receivership", which is what his plan (Corky/Warner) is trying to accomplish.
Transcripts from Warner/Mnuchin exchange at Treasury Secretary Confirmation Hearing (without corrections)
SEN. WARNER: ONE AREA I HAVE CONCERN AND INTEREST IN IS ON FANNIE AND FREDDIE. I KNOW THERE WERE SOME PEOPLE THAT POTENTIALLY INTERPRETED SOME OF YOUR COMMENTS ABOUT RECAP AND RELEASE, WHICH IN A SENSE SAY EVEN THOUGH THE AMERICAN TAXPAYER WAS PAID BACK $188 BILLION IN THE FAILING INSTITUTIONS IN A MOMENT OF CRISIS, I THINK FROM A BUSINESS STANDPOINT WE WOULD BOTH SAY THAT WAS HIGH RISK CAPITAL AND WE GOT A BETTER RETURN, BUT SOMEHOW THOSE THAT SAY LET'S REFLOAT THESE ENTITIES AND IGNORE THE UNDERLYING CHALLENGES -- DO YOU SUPPORT THAT POSITION OF RECAP AND RELEASE THAT SOME HAVE ADVOCATED?
MR. MNUCHIN: LET ME BE CLEAR THAT I DID MAKE COMMENTS ABOUT THIS. MY COMMENTS WERE NEVER THAT THERE SHOULD BE RECAP AND RELEASE. I HAVE BEEN AROUND THE MORTGAGE INDUSTRY FOR 30 YEARS AND I HAVE SEEN THIS FOR A LONG PERIOD OF TIME. THIS IS AN AREA I BELIEVE I HAVE EXPERTISE IN. FOR VERY LONG PERIODS OF TIME I THINK FANNIE AND FREDDIE HAVE BEEN WELL RUN WITHOUT CREATING RISK TO THE GOVERNMENT AND THEY PLAYED AN IMPORTANT ROLE . I BELIEVE THESE ARE VERY IMPORTANT ENTITIES FOR LIQUIDITY FOR THEWHAT I HAVE COMMITTED TO IS THAT I WILL WORK WITH BOTH THE DEMOCRATS AND REPUBLICANS. WHAT I HAVE SAID AND BELIEVE, WE NEED HOUSING REFORM. WE SHOULDN’T JUST LET FANNIE AND FREDDIE AS IS OR THE NEXT FOUR OR EIGHT YEARS UNDER GOVERNMENT CONTROL WITHOUT A FIX. I BELIEVE WE CAN FIND A BIPARTISAN FIX FOR THESE. ON THE ONE HAND, WE DON'T END UP WITH A GIANT BAILOUT. ON THE OTHER HAND, WE DON'T RUN THE RISK OF COMPLETELY LIMITING HOUSING FINANCE.
SEN. WARNER: I APPRECIATE THE COMMENTS, I LOOK FORWARD TO WORKING WITH YOU. SINCE I TOOK MOST OF THE 30 SECONDS ON YOUR STATEMENT, I HAVE TWO QUICK QUESTIONS. I HOPE THAT YOU CAN ANSWER WITH YES OR NO. IN LIGHT OF THOSE COMMENTS ABOUT RECAP AND RELEASE, YOU COMMIT NOT TO SUPPORT ANY KIND OF ADMINISTRATIVE EFFORT THAT WOULD BYPASS THE CONGRESS IN TERMS OF EFFORTS TO RECAP AND RELEASE?
MR. MNUCHIN: I DON'T WANT TO MAKE ANY COMMITMENTS TO LEGISLATIVE OR NOT. WHAT I WILL COMMIT, BECAUSE IT IS MY RESPONSIBILITY AT TREASURY , AS IT RELATES TO CERTAIN ISSUES WITH FANNIE AND FREDDIE. WHAT I WILL COMMIT TO IS IT IS MY OBJECTIVE TO FIND A BIPARTISAN SOLUTION TO IT. I WOULD WELCOME THE OPPORTUNITY TO SIT DOWN WITH YOU.
SEN. WARNER: MY HOPE WOULD BE THAT THE BIPARTISAN CONSENSUS THAT THE BANKING COMMITTEE ARRIVED AT WAS THAT THAT SOLUTION, AND WE CAN DISCUSS ABOUT HOW WE GET THERE, SHOULD END UP WITH THE HOUSING FINANCE SYSTEM THAT PRESERVES THINGS LIKE A 30-YOUR MORTGAGE IT ALSO MAKES SURE THERE IS NOT THE CURRENT STATUS, WHEN THINGS ARE GOING WELL, PRIVATE SECTOR GAIN, BUT WHEN THINGS HIT THE FAN, TAXPAYER HOLDING THE BAG.
MR. MNUCHIN: I CAN ASSURE YOU I HAVE NO INTEREST IN THAT AND I WILL NOT SUPPORT ANY POLICY THAT HAS.
Thanks for your insight. I guess one good thing about Mr. Cooper becoming the SG is that he would then have access to the almost 12,000 hidden government documents. Even though he may not be able to do anything with them directly, he should be able to influence others below him to act accordingly (in our favor) if he found the documents showed the rule of law was not followed.
Obiter, you obviously have a keen understanding of many things "legal and GSEs" (to name a few) and I was wondering if you could share your insight on the latest news where Chuck Cooper seems to be one of two finalists for becoming the new Solicitor General.
If selected, how will that impact his role(s) in the current GSE case(s)?
Would he not then be defending the US (Government side) if the GSE cases made it to the SCOTUS?
How could Mr. Cooper being SG help (or hurt) the legal cases or GSE equity investors?
Ant other thoughts not covered in my direct questions are of course, welcomed.
Thanks again for your time spent here sharing your knowledge.
The Case For Chuck Cooper As Solicitor General
Anyone who knows Chuck, or has litigated with or against Chuck, knows he is deeply committed to the rule of law and highest principles as he sees them. When it comes to upholding the rule of law, Chuck Cooper may be rigid for some tastes, but he is an immovable rock for any who’d disregard it.
Then there are Chuck’s Supreme Court arguments. Chuck has argued seven times before the Court, more than any of the other three SG finalists you’ve discussed. One of his cases was Clinton v. City of New York, in which Chuck successfully challenged the line-item veto. Another was United States v. Winstar, in which Chuck successfully paved the way for a succession of banks to recover large losses that they suffered after the United States encouraged them to take over failed thrifts during the savings-and-loan crisis, then reversed course.
Obiter, thanks for your wonderfully detailed answers to these important questions.
I agree. In short, K.I.S.S.. Get the job first and don't say more than you have to to accomplish that goal.
It should be interesting -- probably one of the more spirited and entertaining of all of the hearings is my guess.
Full schedule of Cabinet confirmation hearings and what to look for
This article covers most all of them. Mnuchin has not been scheduled yet and will most liken happen shortly after Trump's first day, 1/20.
Hope this is helpful.
As investors, what we need to ask ourselves is, at what side of the table do Tim Rood and James Freeman/WSJ sit?
Rood was present at the recent Trump luncheon with 400 other businessmen and I doubt James Freeman or the WSJ was there. It's obvious Rood sits on the same side as the Trump admin - to include Mnuchin et al. James Freeman and the WSJ are sitting across the table and always have.
Ultimately, I like being on the same side as Mnuchin et al because when it's time to butter my bread, frankly, it's a much easier reach.
Anyone else see the very large FNMA t trade after the bell?
16:00:35 3,502,100 $3.90
Equals $13,658,190.00....not chump change.
Yes, Ackman (Pershing) owns approximately 10% of the 1.1581B FNMA & 650.05M FMCC outstanding common shares for both FnF and he has owned them for a little over three years now. I believe his average share prices for Fannie and Freddie are $2.29 and $2.19, respectively. He has about $404M+ tied up in this bet. I believe has also bought some swaps from JPM or someone like that.
Icahn owns about 12.5M common shares total of FnF. He bought them from Berkowitz a few years ago at about $4.02. I wouldn't be surprised if he owns more by know.
Berkowitz had some more commons left over, but I'm not sure if he still has them (about 20M - 30M or so I believe). His entry point was close to Ackmans, maybe in the 2.30-50 range. He is mostly all pfds.
I've seen it reported that Fidelity owns commons as well, but not sure how much. I assume it's less than the other listed above though.
Here are the two keys in all of this......
•Bove believes it's possible Mnuchin has already held talks with Trump supporter and Fannie investor John Paulson, and that other prominent investors like Bruce Berkowitz and Bill Ackman would prefer a quick deal vs. spending years and millions in court.
•On Jan. 20, all the material Democrats have withheld from the courts becomes available to the Trump administration, says Bove. This gives Mnuchin "staggering leverage" against potential Democratic opposition.
You can bet your bottom dollar Mnuchin has had many, many detailed conversations about FnF with his very good friends, Paulson, Lampert, Berkowitz, Icahn and Ackman over the last few years. (and they will all make bank)
And, the 12K documents will stand to sink the previous Amdin and the existing Democrats. Mnuchin will use those docs to do what he wants (within reason) to the GSEs. Don't think Watt is exempt from that mess either.
Jedidiah, while I want the warrants to go away as much as anyone and feel the right thing to do is to invalidate them, you are using the wrong logic to do so. The AIG/Starr case is set to a different rule of law than FnFs warrants. In AIG Judge Wheeler was applying the rules regarding whether or not the FED can inject money into a company and receive stock in return and the law states it cannot. The SPSPAs are unfortunately subject to HERA, not the same FED law Wheeler used. This has been proven by many, but few want to listen to them.
Now, how to get rid of the 79.9% warrants held by the UST is a different story, but I believe Mnuchin (once confirmed) can create a 4th amendment with FHFA and eliminate the warrants. Would he? is the big question. Many don't think he will, but I would not be surprised if he did. Coker's add in - Jump Start - speaks to the PSPAs, but I can't remember if it covers the warrants of the top of my head. I want to say it might not.
Tcj, I agree, looking at both sides of the argument is the right way to do DD. No one has all of the answers (except maybe Obit - one smart cookie ), but there are many ways to get to 2.5% capital. The real Tim Howard (ex-Fannie CFO) has explained this on his blog located here...Howard on Mortgage Finance. I recommend reading it and the comments, very intelligent insight from someone really in the know.
As for Bose's last comment on the commitment fee, industry standard for that type of fee is usually set at around 25 to 50 basis points, but all anti-GSEers want us to believe a much higher usury rate (say 5-10%) is normal, which in turn would financially cripple the companies of course....thus making them "seem" right.
The real players here now are Trump, Mnuchin, Ross, Blackwell, Blackburn, Paulson, Perry, Lampert, Berkowitz, Icahn and Ackman (and a few others). All of the rest is just most likely noise imo.
For FNMA & FMCC combined.
Guchu, most of your info is correct, but there are still four cases awaiting opinions out of the 308 heard during the Sept '15 thru May '16 court Term - with the Perry appeal being one of them. The two opinions released on Nov 29th - this past Tuesday - were argued during the current Term (Sept '16 to May '17) and are not part of the 308 cases from the previous term. So there are still four cases left out of the 308 to have opinions released. I have the names of those four cases.
On opinion should be imminent, unless it is being held back for political reasons, of course.
I hope this helps.
Not a personal attack on you, but what, may I ask, did Gasparino ever do for you to have "a great deal of respect for him" in the first place?
The guy has been a bully hack for years. He just might be the least intelligent person I've ever seen sitting behind a national business news desk. And -- with today's media -- that's not saying much. haha
He's a clown.
405K share buy just went through
YES! Just heard it with my own ears too, cmdr! Commenter was very enthusiastic as well!
Made me laugh! Go for the foot long, cmdr!
Next wall should be around $4.36....then $4.44-ish
Fox Business Video with Mnuchin on GSEs. Starts at 4:55.
Mnuchin on GSEs on Fox Business
Fox Business Video with Mnuchin on GSEs. Starts at 4:55.
Mnuchin on GSEs on Fox Business
Yes, same to you. Just waiting for this to play out. It's been a very long time, but my intuition tells me it's going to be worth it.
Historically (pre-conservatorship), FnF have had a P/E of around 9X. This has always been somewhat lower than the industry average. It's due to the political risks associated with FnF through their government charters.