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How do you know? As likely that they are, as that they are not...
One way to read the intent of Calabria's shit talking is that government is trying to up pressure on plaintiffs with regard to settlement terms...
We shall see
Yes, this is finally the cheap money bubble popping, was always coming as lots of people have said... just got to see how much of a correction this is
Being in a special situation is not a bad place to be in such times, so long a Treasury does not go wobbly on moving forward with amendments and consent decree -- FnF is raking in profits for a slow self re-fi...
Bloody hell, wider pre-market looks brutal
Stinkie, yeah, I give the darkest before dawn hypothesis some credence here -- I think the Calabria shit-talking may be connected to settlement talks that are getting real, both sides playing hard ball (but both sides need to get her done before President Sanders comes in...they laughed at Trump for President, remember...)
So we might have good news soon
Actually think SCOTUS oral arguments will give us boost next week -- the conservative justices will not like rogue agencies...
Taking us to the woodshed alng with everything else...
Steak Tartare - Margin calls and Algo craziness...
Red and bloody steak
Yup, they are yanking the chain...
Still a way to go, and they won’t make it easy...
Either darkest before dawn or darkest before endless night
Lol, took the elevator down, sorry
Bought me some ET and MAC today, bargains with great yields
Jumps were last week - ran from 3 to 3.50...
A lot of selling, is there news out?
And cases with potential awards/damages etc. in the hundreds of billions... worse than abestos cases...
This is like the old days! 20% jumps, then slides... shit-talking FHFA director
Only difference is that the cases are now with SCOTUS - no appeal to that judgement. Bring it on, finally...
Bove piles on another hit-peice and downgrade:
https://www.valuewalk.com/2020/02/fannie-mae-freddie-mac-downgraded/
NB Bove downgraded common to sell, while keeping pref at buy. But no one should care, since he jumped the shark a while ago and I have no idea what he is talking about any more...
Uh huh? That why China has 200 million people under lockdown?
Why huge? Just getting them in to ask "Whatssup?"
Holden and Joseph is a better guess - or RUUD
Amen -- bring on SCOTUS with a final and unappealable ruling...
Yes, Calabria had an agenda and one point on it was whack-a-mole with the common expectations.
And one can expect further tries at the game, Calabria likes to play whack-a-mole which he can now do all the way to July and the SCOTUS ruling if need be.
Furthermore, Calabria did not want any chance that his words might be attributed to the *ahem* "creative" reporting we have seen at Bloomberg, so he went ON VIDEO to make sure there was no doubt at all about the dire things he said
They picked their man wisely, Mnuchin is running this show as Calabria has now told us...
AZ, right hopefully we will, but as you know it is hard to tell. But the majority is keen to whack the agencies back and to disincentivize agency creep... so fingers crossed
But July is getting really late to do this, I really wonder what has gone on in the WH and whether the election people have stopped the process. (I really do not see why since (i) the public just do not care and (ii) people have already decided one way or the other on Trump.. so why not get it done?)
Sadly, we have to wait till July -- and I believe you can bet that the Calabria-Bloomberg News tag team, along with TBTF lobbying shills like Pinto and DeMarco, is going to beat down the common SP over those months...
Donotunderstand, when pref owners get a chance to choose between converting, or possibly take some cash offer of lower level, or continue to hold without divvies, then they have to judge whether the common is worth the risk to get the upside
That is going to depend on many, many factors about the wider deal for FnF and wider factors both economically and politically
I personally think Bernie beats Trump in a landslide, I think latino and African-American turnout will be huge, so how firmly can Mnuchin/Calabria lock in the framework they introduce is a very big consideration? Cos President Sanders will not be sympathetic to any deal they do
Sanders will also fire Calabria on Day One and by that time SOTUS will have ruled that he can do that -- question is whether Calabria and Mnuchin want to get something done, or just plan for their post-Trump careers with Mnuchin back in SoCal and Calabria back in the bossom of the tin-foil hat wearers at the Cato and Heritage Institutes gabbling on in presentations no one gives shit about
One wonders at this point what Mnuchin is up to, and I am VERY impressed it has not leaked like everything else from this WH. If they really are going to do the RnR, then you don't want the oppoisition to mobilise so you get it close and then BAM! do it...
Maybe you get an FHFA Director with little remaining credibility trail what is coming... Let us hope.
Jog, I said this a year ago before she ruled, but I have A LOT of faith in Judge Margaret Sweeney. Judge Sweeney has given her life to the Court of Claims and served that institution with integrity.
If Judge Sweeney ever rules, then I expect a very fair and even handed ruling, whatever it my be
In addition, SCOTUS has a conservative majority wanting to curtail -- and rightly -- the excesses of out of control agencies. They are going to bring the wood to the CSPB and, hence, to FHFA. And they are going to be keen to disincentivize future agency excess -- so we will see retrospective remedy imho
So, yes, I do think the courts are bringing good news from SCOTUS in July and Sweeney in 2021. The question is whether Mnuchin wants to let that happen or not.
Who knows what the debate inside the White House over FnF looks like?
KThomp, any thoughts on why Calabria is out there talking, and why right now?
I think one plausible hypothesis is that (1) Calabria is talking down common expectations since there will be a lot of dilution.
Any suggestion is that (2) Calabria is floating trial balloons to get various constituencies ready for what is coming -- and (3) to alert potential investors
The gut (4) does not have appropriate discipline over his presentations for a regulator
Maybe Calabria is talking to his right wing buddies... I am really not sure, tho (2) and (3) look most plausible
Any thoughts?
Bring the FIRE!!! Wash Mutual is the big stick, start swinging it and then you get some attention from Mnuchin
I really hope SCOTUS deep-sixs the CSPB and hence FHFA -- then let a raft of new filings come forth with still greater damages
Treasury could settle, if not then you pay the price at trial -- bring it!
Plaintiffs did not like Calabria performance -- bring the FIRE!!!
I like this a lot, no reason to play nice here. Treasury only understands the force of court rulings, so go get 'em
I like this a lot...
Depends on how hard the markets come down, they were waiting for excuse to let off steam - but the virus is going to hit output and consumption everywhere
I agree about pref having more upside, and common more downside, than many of us thought
If pref coverts, then pref has all upside of common PLUS gain in reverting to par (150%?) before that
On common side, this really could be crazy dilution after JPS conversion, partial SPS butt conversion (what is left after overpayment return), warrants and SPO. I am surprised you get to common at $6
But we will see, I hope in 2020 but who knows? Sad thing is Mnuchin might, but Calabria may not
KT, thanks for the response. Not convinced. If JPS ask for 2x par, then Treasury can walk and just offer better terms in SPO while keeping JPS...
Curious to see what wrinkle they come up with to wrangle JPS conversions...
No, prefs not down much at all
Navy, I have been, and continue to be, amazed at a REGULATOR talking about future actions -- just not done.
So, why is Calabria out here yapping? And every time he does it whacks the common SP?
2+2= 4
Indeed, Calabria and Mnuchin control EVERYTHING
Go read HoldenWalker on Twitter, he has been banging on for week about how lSenior Pref amount exceeds the amount Treasury pays back in overpayment. The Treasury CONVERTS the remaining Senior pref to common -- ALONGSIDE taking their warrants.
That dilution would be very, very large.
So, Calabria says common will be DILUTED, as some of us have said, the question is only how much dilution...
No wonder common is tanking...
Calabria comments tanked it again -- just when commons start to run, BOOM!, a vague or negative comment by Calabria brings it back down
A pattern? And to what end?
I was pretty sure the recent commons run would hit a dip or two, here we are again...
2.09 of par? What? How on earth could that happen? 72 billion of common for JPS? I think not. 1.1 of par maybe 1.2...
Mike, I do not understand it.
Some are saying Treasury is waiting on the courts to give cover, so Calabria is stalling -- but why cannot the capital rule be in process before court rulings? It will be now, so why such a long delay before doing this?
I call two options: Cock-up or Conspiracy? I tend towards Cockup Calabria..
To err is human, to really screw it up takes an academic
Nats, who knows but this is FHFA press release, so they could frame it as they will
I am starting to think through what a dead year in 2020 on the administrative side might mean
A SCOTUS ruling in June-July favorable to plaintiffs in Seilia could force a NWS reversal
Got to factor that in
My big question: Are Mnuchin and Calabria in sync? Or has Calabria used the capital rule slow walk to further Calabria’s agenda on FnF?
If the latter, someone tell Trump to ask for Calabria’s resignation and go from there. See if Mark has the stones for following through what he has started...
Calabria's slow walk revealed?
If the capital rule only appears by end of 2020, then it can be reversed by replacement FNFA director installed by Dem President
On the other hand, if the companies and FHFA enter into a consent decree, while FNFA and Treasury amend the SPSA, then that would lock in a course going forward
But one wonders on Calabria's commitment to the latter, since it has slow walked the capital rule -- but why do that if you are committed to the process?
Calabria comments on capital rule - final rule by end 2020...
“FHFA’s capital rule will be a critical mile marker. It must be in place before Fannie and Freddie can go to the market to raise capital. I expect we will have re-proposed the capital rule very soon. Our goal is to publish the final rule by the end of 2020.” Director Calabria pic.twitter.com/fcCxnJm7Kp
— FHFA (@FHFA) February 24, 2020
Sigh. The remedy from SCOTUS would remove neither Consumer Bureau or FHFA -- just change whether President can fire the director or not...
If you really on one or two things Calabria has said, well, may god help you. Calabria also hired a finanicial adviser, what might they be advising him on? Hmm?
FD, thanks. Of course it was Fury - we Brits don’t make the same mistakes twice. Glad Wilder’s trainer threw in the towel - just sorry the commons don’t have a cornerman who could do the same (Joke...)
Reconfiguring capital structure sounds like JPS conversion to me...
Thanks for the feedback as ever
FD, I agree with most of this, except one thing
You don't hire financial advisers to advise you on how to retain earnings. FMCC does not add a board member with IPO experience if you are only retaining earnings...
A secondary public offering is coming, the question is when and in what form imho
Loki will advise them, and like all devils I am sure common holders think he is a pref holder