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Incredibly dumb move. Owning prf'd is the only possible hedge against adverse restructuring event.
Ignorance is bliss I guess. Where is it documented with any credibility that the GSE's are owed $250 billion and what is the catalyst for such an action to occur? BTW - baseless emotion doesn't count.
The money the Treasury received in the original deal is NEVER going to be returned to the GSE's. Your reasoning and math are nothing short of 100% ridiculous! You and anyone else who thinks for a second that the warrants won't be utilized in some fashion are naive at best. Stop perpetuating this false narrative. There is only one suit that challenges the original agreement and they don't have the money to fight to the end. Everyone seems to know this except you and a few others who are simply not engaged in the reality of FnF.
The pps dumped on the sale and was then covered up with a purchase of 100 shares. It's called painting the tape.
I look forward to hearing comments from Mnuchin and Mulvaney once they're confirmed. Corker and Warner are both fools, but it's just incredible that Warner's main concern is hedge funds reaping a reward.
That's common. We're talking about FNMFN
Mine shows just shy of 1.9M shares
I'm not being negative, but that means nothing on virtually no volume.
There has been no corresponding purchase in common of $17,000,000
Someone dumped 1.3 million shares of FNMFM today.
My opinion based on todays testimony is that Mnuchin will likely be confirmed. He clearly stated that FnF acquired toxic loans from banks, they are well run, safe and serve a vital purpose. Therefore, I interpret his comments that he never said there should be recap and release as a statement of exactly what he said during the interview on Fox as opposed to a literal meaning that he doesn't support R&R.
He further did not commit to not acting on his own. He also said that he had not reviewed the legal aspects (I beleieve this would have been his cover if pressed harder on hedge funds and prfd shareholders benefiting).
So he said what he needed to say so not to create potential issues with anti-FnF senators, yet he did confirm FnF necessity in his expert opinion (made the point that he is an expert on FnF).
What is your opinion based on his testimony?
MR. MNUCHIN 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 ROLEND 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 KNOW YOU ARE RUNNING OUT
John Hilsenrath on Fox Business: looking forward to hearing Mnuchin plans on FnF. He is personally invested in Paulson hedge fund so he has a lot to gain personally even though he said he would divest.
Sure John, because a guy worth $200M with a possible investment in a fund that might equate at most to $50-$100K (personally) will surely make a decision based purely on that. Forget about the NWS, the documents, the litigation, etc.
Love to see the math behind that thesis!
I'm very sorry to hear of your loss Warhead. My thoughts and prayers to you and your family.
I don't know how you could think that?! You have stories all over the media regarding his ties to Paulson's fund and the fact that FnF decision could benefit him (former Indymac partner). You also have the letter from Brown, that he didn't respond to directly, asking him about FnF, decisions benefiting prfd stockholders, etc. Maybe he'll be able to provide non-specific answers, but given above and the fact that he already made statements on FnF, it is naive to say no part of his session will be devoted to the GSE's. The left are going to do their usual dishonest bullshit and try to damage Mnuchin anyway possible. It's pretty simple: part 1: foreclosure king, part of the crisis (even though he bought the loans, didn't originate them), parade out some families who were foreclosed on (the left loves to parade "victims") and part 2: evil GS alum, ties to Paulson, claims that he's making FnF decisions to benefit "billionaire HF friends" and some pointed FnF questions never answered in Browns letter.
http://www.forbes.com/sites/bisnow/2017/01/13/steve-mnuchin-trumps-treasury-pick-investment-could-benefit-from-fannie-and-freddie-restoration/#350c47ad2df6
http://www.thefiscaltimes.com/2017/01/12/3-Questions-Senate-Needs-Ask-Treasury-Nominee-Steve-Mnuchin
http://www.huffingtonpost.com/entry/donald-trump-fannie-mae_us_58557e4ee4b03904470916ff
http://www.politico.com/blogs/donald-trump-administration/2016/12/sherrod-brown-steven-mnuchin-232893
Gasbagarino just made a comment regarding Mnuchin that he understands Mnuchin confirmation hearing is up next week. Haven't seen any confirmation of this as of yet.
I understand there are no established time frames. I was simply trying to assess the situation by looking at the timelines of other previous writs being decided, which ranged from one week to a month.
The U.S. Court of Appeals lists under Writ of Mandamus: "The proceeding must be given preference over ordinary civil cases."
Any thoughts or opinion regarding the decision on the writ of mandamus? Prior writ decisions that I have seen typically were decided within 30 days. I believe that the court is required to stop working on all cases and give all attention to a writ. Like some of the other cases, I find the delay concerning. I have read a few opinions that the Perry case may be waiting for the writ decision and the possibility of receiving additional docs, and that the court deciding the writ maybe waiting for a new admin. so to possibly prevent the chance of gov pursuing an en banc hearing. All speculation of course.
Yeah that's it because institutions typically purchase OTC stocks that are over $4.
Absolutely 100% ridiculous!!! Treble damages, no warrants calculated, no recapitalization calculated and a PE of 17 for what will likely, if we're all lucky, emerge as a utility model. Why do moderators let people post non-sense like this?
I don't see it as a positive at all. Times running to the capital being completely drained. Planning and restructuring isn't something that's just going to happen as people somehow believe. It will be a lengthy process so we can't afford delays.
I agree TH717 had a lot of vagueness and BS, but there were definitely signs that he had some in-depth knowledge and sources. I had asked him several direct questions for the two days prior to him disappearing none of which he answered. Not sure what to make of him disappearing, maybe nothing, but I find it very strange given the length of time that blog existed. If he turned out to be completely wrong, why would he care as he's anonymous anyway.
Mnuchin could be delayed until Feb - https://www.bloomberg.com/news/articles/2017-01-13/mnuchin-start-date-looks-iffy-as-congress-scours-wall-st-past
Why not assume that the warrants will be exercised? There is nothing in court that challenges the initial 2008 deal with the exception of a single case. Tim Howard pointed this out yesterday that the Washington Federal case doesn't have the cash to get to the end so unless a major player decides to back, it's probably mute.
Therefore, there is no reason for the gov to give up the warrants. There is opportunity for them to be altered in some way under settlement and I guess the option that Trump just decides it was wrong so he doesn't pursue. I just don't see. If you base will they or won't they on probability, it is very probable they are exercised in some fashion. That isn't necessarily terrible IF the price is raised, they're sold in tranches down the road, etc.
As an aside, I saw this on Howards site. Thoughts?
Do you have any comments on credit enhancements being done by Fannie Mae to make CAS securities more acceptable to Moody’s? http://m.moodys.com/research-preview/PR_360586?docid=PR_360586&WT.mc_id=AM~WWFob29fRmluYW5jZV9TQl9SYXRpbmcgTmV3c19BbGxfRW5n~20170112_PR_360586
I suspect Treasury may be trying to unload more of these instruments by making them more appealing to investors, thereby trying to wind down the GSEs as much as possible before Trumps team is in place.
What makes you think this? His site has been down for the last couple of days.
I appreciate your response and agree that maybe the best course for Mnuchin would be to avoid potential conflicts at this particular point. The problem is that I'm not sure that this is possible for a couple reasons.
First, he will surely be attacked by democrats on the basis he is going to do favors for "his hedge fund billionaire friends". If his answer regarding FnF is that he has not discussed specifics with President Elect Trump, they will attack him on this, i.e you said FnF was a top ten priority so how could you not have discussed or given that housing is 20% of the economy, how could you not have discussed. He runs the risk of being made out as inept and/or unprepared.
Two, I believe that he will be drawn into the topic with very specific questions on FnF, restructuring, etc. His answers will need to be direct and he will most likely be re-questioned again on specifics as they relate to his answers.
I'm just not so sure than he can be circumspect or vague in his replies and I'm also not sure that he can say after already commenting on FnF that he has yet to discuss specifics with PEOTUS.
Would it be a good decision to blame the current admin for the situation of FnF, i.e. draining off the capital buffer and keeping all profits through the NWS, putting the economy/taxpayers at risk and trampling on shareholder rights? This would united republicans and put democrats on defense IMO. It would also fit with how Trump might approach this type of situation.
Carson just asked if he supports a backstop such as FnF.
He does, but also supports bringing in additional private money as well.
The problem is that when you hear people say privatize, it's often unclear as to what they mean. Is it wind down, liquidate and hand over to TBTF (the private sector) or is recap, release and allow shareholders to own. Corker/Hensarling would say they want to privatize yet so would Josh Rosner/Tim Howard.
You have probably seen this clip, but here it is in case:
http://video.foxbusiness.com/v/5279352704001/?#sp=show-clips
Not included in this clip is a later comment by Freeman that he hopes senators will ask Mnuchin directly if he finally plans to get rid of these two behemoths to which Bartiromo replies, well that's exactly what he said he would do.
In addition, there are now multiple stories regarding Mnuchins investment in Paulson's fund and the fact Paulson stands to benefit from FnF.
I believe that FnF is likely to be a central theme at his confirmation hearing. There is even strong potential that those in favor of his nomination will press him on the future of FnF, i.e. Crapo. Short of a decision in Perry, to me, this will be a monumental event for shareholders as he is likely to make comments regarding the admins beliefs and plans regarding the future of FnF. It appears to be a key catalyst for the pps IMO.
My hope is that given Chuck Cooper prepped Jeff Sessions for his hearing that maybe he will also prep Mnuchin regarding FnF.
What are your thoughts regarding above?
It's bullshit! Someone should be on the FnF side who can make a stronger argument like an Ackman, Berkowitz, Paulson, Howard, Rosner, etc. I like Rood, but he left half the bullets in his gun.
To your question of is that what he meant, sure didn't seem that way, but wouldn't that be the proverbial black swan! Scares the hell out of me. As I posted yesterday, his responses in his hearing are going to send the stock soaring or crush it.
I'm amazed that Tim Rood and/or anyone else never bring up the docs, the use of presidential privilege, the statements known such as the golden age of profitability, etc. No decision on the writ after a month now. Easy to see how one could smell a rat.
I just saw that it is James Freeman of the WSJ.
He made additional comments moments ago that "he hopes at the Mnuchin confirmation hearing that a senators will ask him directly if he finally plans to shut down these two behemoths" - might not be verbatim, but I'm pretty close.
Maria Bartiromo replied, "well that's exactly what he said he wanted to do".
GSE discussion on Fox Business at 7:30. Only caught last couple mins. If anyone finds the video, please post.
Typical guest calling for a wind down and liquidation, they caused financial crisis, protecting taxpayers, etc.
I think it's pretty clear. I'm not sure that just because the CBO considers it one way that it technically changes a legal interpretation. Maybe obiterdictum has a clear understanding on this.
I hope this is correct as I thought Paulson was in prfd. This clearly indicates common, but it's also ABC...lol
They didn't pick 79.9% out of a hat.
You're making statements based on personal opinion not fact. The gov has the warrants, they are valid and they can exercise them if they choose to. It's not about what's right and wrong, rewarding theft, etc, etc. I get it all and agree they shouldn't as "the right thing to do", but I'm not naive given that we're talking about billions of dollars at stake. I'm very pro Trump and I could see him doing the right thing, but I could also see him structuring a deal where everyone benefits from the current share price including his admin.
I've read your calculations on pps before and believe me! I wish you were right as a fellow shareholder, but it's just plain ridiculous.
Obiterdicum is correct
The US Treasury's reason for receiving a warrant for a potential 79.9% equity stake in each GSE is directly related to prohibiting pushdown accounting from being enacted under US accounting rules.
If the warrants are exercised and the US Treasury comes to own and retain 79.9% of the common stock of the GSEs, the GSEs are not substantially owned by the US Government (US Treasury). Substantially owned, in FASB practices, means 95% or more. Pushdown accounting is allowed, if ownership of the GSEs ranges between 80 and 95 percent. Pushdown accounting is prohibited with a threshold of less than 80 percent ownership. If this accountant standard holds, then the exercise of the warrants does not force pushdown accounting and does not move assets and liabilities to the US account.