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No doubt that he gets confirmed. Republican controlled house and a simple majority. Bet Trump gets every single nomination.
You're full of shit! Post your statement confirmation without any personal info. showing your short position. Can't wait.
or he's calling bullshit on that statement
Not true. If they issued new common to recap, it wouldn't be anywhere close to 20%. That said, wouldn't make any sense given other options.
Not true. I don't think it happens, but if they issued new common to recap and exercised the warrants at the deal they currently have, common would be close to worthless. They would still have to pay off preferred.
There's no mystery here. From advisors, friends, landing team, treasury and budget, he is literally surrounded by pro FnF people. This is kind of like a major Captain Obvious situation.
Trump admin and Obama admin are as polar opposite as you could ever get. The new admin is composed of and surrounded by people, who are on our side.
That was a bankruptcy situation with no gov involvement. No NWS, no political ramifications and no litany of HF lawsuits.
That's a scary thought, but don't you think that would be very unpalatable politically? The media would run 24/7 that Trump handed over FnF to his hedge fund buddies, screwed the taxpayers, pick your narrative. This would also lead to more lawsuits. Doesn't seem like a probable outcome.
I agree on $12-$14 when you run the numbers and think a move towards $20 is realistic when various funds come back into the mix with a new listing. I also think that IF the warrants are kept, it makes sense that litigants would push for a higher exercise price and that it directly benefits the gov equity longer term. Problem I see is that almost all the cases haven't challenged the warrants and Ackman even factored them into his plan as though exercised. So you'll really have only one player at the table challenging warrants; and a higher exercise price seems like a plausible meet in the middle solution.
Spot on to with regards to useful content and examining what really matters as a shareholder as opposed to $161 pps, filling gaps, chart formations and all the other useless shit that people post.
His quote in July says it all.
"I continue to believe that conservatorship is not a desirable end state and that Congress needs to tackle the important work of housing finance reform"
His quote in July says it all.
"I continue to believe that conservatorship is not a desirable end state and that Congress needs to tackle the important work of housing finance reform"
Mnuchin said he doesn't want the gov to own/control the GSE's, but that doesn't mean they won't take advantage of the warrants in some fashion. My bet is they raise the strike as part of a settlement and sell off their position over time. I've said many times that if they can end the majority of suits with an acceptable solution/pps and make a bunch of money "for the taxpayer" this is what they'll do.
I'm saying try to contribute something of value based on probable outcomes and math in a crowd sourced environment as opposed to pretty much every one of your kind of posts, i.e pointless, worthless, empty speculation, parroting of same.
It's called a fourth amendment and/or moving the assets to a newco. Attorneys have no problem getting around at all. I only wish this was all we had to worry about.
That said, most of this board is a waste of time. The focus should be on how does recapitalization take place assuming that the warrants are eventually exercised. If they're not, that's great, but for investing purposes assume that they are.
NWS over payment applied to original deal means $10B sr. preferred outstanding, plus $30B jr and a capital requirement of maybe $70B. How do you get there in a way that ends most litigation and benefits shareholders plus gov.? There is no more important question than this one.
That's not true either. There is no congressional approval required to end conservatorship.
Wake up!
"I continue to believe that conservatorship is not a desirable end state and that Congress needs to tackle the important work of housing finance reform" Mel Watt
?July 12, 2016 Watt's response to trade groups:
"I continue to believe that conservatorship is not a desirable end state and that Congress needs to tackle the important work of housing finance reform"
It won't be congress, it will be Trump/Mnuchin. He will agree with them because he knows it needs to get done now. My conclusion is spot on.
Navy posted this earlier. Sure doesn't sound like he's pro-conservatorship to me. Maybe it's "out of context" again?
Mel Watt ...
Quote:" First, and most importantly, future draws that chip away at the backing available by the Treasury Department under the PSPAs could undermine confidence in the housing finance market."
"Future draws would reduce the overall backing available to the Enterprises, and a significant reduction could cause investors to view this backing as insufficient. It’s unclear where investors would draw that line, but certainly before these funds were drawn down in full. "
Investor confidence is critical if we are to have, as we do today, a well-functioning and highly liquid housing finance market that makes it possible for families to lock in interest rates, obtain 30-year, fixed-rate mortgages, and prepay a mortgage if they want to refinance or need to move. If investor confidence in Enterprise securities went down and liquidity declined as a result, this could have real ramifications on the availability and cost of credit for borrowers.
"Out of context". That sounds like the liberal argument for everything and anything they don't agree with. I think that sentence is very much in context and says it all. Further take a look at the quotes navy posted as well. You're wrong.
Your reference basically says I'm forced to do this and I'm doing the best I can and will continue to do so.
Quote from Feb 18, 2016 Bipartisan Policy Center
"By giving this speech today, I am signaling my belief that some of the challenges and risks we are managing are escalating and will continue to do so the longer the Enterprises remain in conservatorship"
Watt has supported the idea of removing from conservatorship. If Trump/Mnuchin provide him with a plan to exit and recap along with the intent of aiding low income borrowers, why would he put up a fight? It doesn't make any sense.
I hope you're right as a shareholder, but humor me and take a look at a pps using the methodology I outlined. It's certainly an appealing avenue for them to take in the event they don't choose what you're proposing.
The two are completely unrelated. You're a typical message board cheerleader with no real understanding or insight on the subject of FnF. Give the parroting a rest.
The fact that you use AIG, as an example, shows you have no idea what you're talking about. FNMA is not an AIG situation.
I still think they take advantage of warrants, although I hope they don't. When you come up with $12 pps if warrants are exercised, is that at the existing strike or did you raise the exercise price?
I'm trying to come up with a pps under assumptions that excess NWS gets applied to original deal so a senior prfd balance of $10 billion, $30 billion on outstanding jr's and a capital requirement of $70 billion. Allow 2 years for recap, combined new issuance of prfd and common or incentive to convert with a delay on divs for a period. Not sure what would be realistic for new issuance and also what the "right" new strike would be.
Maybe it turns out to be a much better deal, but I'm interested in coming up with a pps based on this methodology where the admin looks to alleviate majority of suits and get a win for gov. I think this is a great place to start in finding a base pps.
Yeah...he has no insight. He only advises the major P's in this case and knows the FnF structure better than anyone. But, I'll listen to your enlightenment instead.
This admin cares about the documents. The new admin will settle because they do not care about Obama admin docs. The fact that you can't understand this really says it all.
My question to former CFO of Fannie Mae Tim Howard and his reply. Unless you held a higher position at Fannie Mae, I'll put my faith with his assessment and the fact that he agrees with my thesis. Best of luck.
Question: Tim – In your opinion would you say that given it may be impossible to settle every single suit depending on certain controlling P’s rationale, i.e they are looking for an outcome deemed to simply be unreasonable, Mnuchin will hammer out a deal with the key litigants and major shareholders, as well as reach out to smaller cases once the parameters with larger have been agreed to? Assuming they choose to take advantage of warrants with the possibility of altering the original deal, isn’t the pps of common shares a key to a successful transition, i.e. most suits are settled/dropped, ability to raise capital increases, treasury maximizes it’s own interest, prf’d may be convinced to a conversion and remain invested for a longer period, etc.? I ask as many still put forth the notion of shareholders being wiped out, new issuance, etc. This to me doesn’t seem like a reasonable probable outcome when the opportunity exists for a win-win scenario. Am I missing some key element short of an unrealistic capital buffer, say 3% or above?
Answer: The way these multi-plaintiff settlements typically work is the “big dogs” negotiate the terms, and the smaller plaintiffs then decide whether to accept those terms or opt out, and continue to sue on their own (with their own money). Knowing that, the large plaintiffs try to structure the terms to maximize the chance that both the defense and the smaller plaintiffs will accept them, so as to end the lawsuits for everyone.
And you’re right about the common shares. If the government views a reformed, released and recapitalized Fannie and Freddie as the best available alternative for the secondary mortgage market of the future–as I argue in this piece that it is–then the government and the plaintiffs have a mutual interest in maximizing the long-term value of those common shares (the government because of its ownership of the warrants). Another important mutuality of interest in a negotiated settlement is “getting the capital right.” Yes, the government wants Fannie and Freddie to be, in Mnuchin’s words, “absolutely safe,” but it also would want to achieve that safety with a minimum of unnecessary excess capital. Capital that’s not needed to meet the government’s safety and soundness standards either extends the time to achieve full capitalization via retained earnings (which requires negotiating regulatory forbearance, and limits or prohibits junior preferred and common dividends in the interim) or requires additional equity capital raises (there is a limit to the percentage of its capital structure a financial institution can have in preferred stock), which dilutes existing owners of common (including the government via the warrants) and lowers its price.
If the executive privilege claims are over turned, you can bet that the 11,000 docs will make their way to the public. Trump can and will use them against democrats if he deems necessary.
Watt is not a concern. If you want to believe that he is, have at it.
The major players will settle and a reasonable pps will likely end the majority of suits. Maybe you and a few others hang on trying to prove fraud for the next several years. Everyone else will take their money and move on to the next investment.
You're making my point that Treasury, i.e. Mnuchin/Trump will dictate what happens.
The plan is to get FnF out of gov control and "get it done relatively quickly" meaning settle with the major players and release.
They could certainly band together to become a large suit, but if you were a controlling P in one of these as it is now and Mnuchin offers a plan that major litigants have tentatively agreed to where pps should trade at $20-$25, do you agree and sign off or do you say I'm continuing in hopes of voiding warrants, obtaining back dividends, etc.?
If memory serves, aren't a good amount of the smaller cases focused on the NWS, which would be a non-issue under above?
Trump/Mnuchin will execute their plan with or without Watt.
The Obama admin. cares about the docs, not the Trump admin. The docs will show that the Obama admin knew of the profitability and thus enacted the illegal NWS. Trump will use these docs as leverage over democrats. They can and will settle with the majors.
Trump can ask for Watt's resignation if he will not follow the wishes of Treasury. If you think that Watt will remain if Trump wants him gone, you're not thinking clearly.
Back dividends, punitive damages are loser suits. The admin will settle with the key litigants and probably look to appease the smaller if possible, but don't think for a minute that if some smaller players want to go for broke trying to win punitive damages,back dividends, etc. that this will hold up the admin. plan to move forward.
$20 - $25 pps means the majority of suits are gone. Trying to fight the original agreement goes nowhere.
I get the argument, but I think if a settlement with the major players were to yield a pps of $20 - $25, how many of the remaining cases would actually choose to press on?
I agree that overturning HERA or getting money back from gov. is not going to happen. As far as smaller cases, I just wonder how many would have the drive to press on if the pps were high enough.
A settlement can be made with the major litigants. It does not have to incorporate every suit. The idea that HERA is repealed and money is returned is a pipe dream. Watt can be replaced at Trump's discretion should he prove to be adversarial to the admin. wishes. If the common pps were to be somewhere in the $20+ range, how many people do you think will still press on with lawsuits and legal expenses? The major shareholders and litigants will negotiate a settlement and the majority of smaller cases will fall by the way side if the pps is over $20 IMHO.
Completely agree and I don't doubt he'll try for a better deal, but I just don't see the gov. giving up basically an 87% stake when you factor in tax revenue. I also think Ackman is quite pleased with $20-$25 in the end. In addition, suppose prf'ds are convinced of a $20-$25 pps for common and are offered a 2:1 or 3:1 conversion. This is personally what I'm hoping for. The admin can then go out and take credit for freeing FnF, making billions for "the taxpayer" and gets the economic bump from increased home ownership. Dems claim Trump was just helping his billionaire HF buddies, at which time, he buries them with some of the damning Obama admin docs (focused on illegality of NWS not the initial deal). IMHO
I hope Ackman can get more because it benefits me and I hope that we get a remand/reversal in Perry for added leverage. I'd love to see the warrants voided..believe me! Guys like Mnuchin/Trump don't leave billions on the table when it's possible they can structure a win-win.
As an aside, I just get sick of people on this board (not you as you've got some great insight and knowledge) and others making these downright stupid claims of pps.
This guy's article is like so many of the boards with people claiming $100, $200, etc pps. I wish he was right as I hold common and prf'd, but I don't think so. Hope vs probability, I'll take probability.
The P's and Mnuchin are going to hammer out a settlement and the P's including Ackman are not going to care if the warrants get exercised so long as the pps works for their investment. The gov has every interest in structuring a deal to get rid of the litigants with deep pockets and at the same time maximize the value of their warrants. The result is that shareholders make a lot of money and the gov (sold as the taxpayer) makes a ton of money. It's a win-win scenario that will end the majority of lawsuits. Prfd's get par and/or hopefully a nice incentive to convert to common while gov. can raise their strike price on warrants, offer a line of credit to offset the need for an immediate recap, etc. Probability is the key to investing IMHO and thinking that guys like Mnuchin are going to leave a ton of money on the table because it's the right thing to do is foolish. Win - win works and if there's a few small litigants that want to try and play it out for the next 5 years, no one really cares at that point. Is this right and do I agree with it, No, but it's the probable scenario.
New article from Tim Howard
https://howardonmortgagefinance.com/
No ruling today
Yeah. He said to tell you to stop wasting so much board space with your baseless conjecture.