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There are two possibilities ...
1. Mnucin was being honest when he suggested that he wanted to return the GSEs to "private hands" and he meant us (the shareholders). If this is the case, he hedged when he was called on it and asked if he favored R&R. Recall he chose his words VERY carefully and replied "I never said recap and release" he did not say he favored it OR opposed it. He simply admonished that he had never uttered the words.
Now if he DOES intend to return the GSEs to the shareholders, it will be MUCH easier with the passing of the "Jumpstart GSE" legislation. So if Mnuchin could lay low and appear to be on Corkers side (recall the hearing in which Corker said in frustration, "I thought we had an agreement", or something to that effect), he could wait, let the restrictive legislation expire, and then have Carte Blanche to re-characterize the SPSPA as a repaid loan AND cancel the warrants in 2018. If, however he gave any indication of that intent, Corker, Warner and the like could tack a rider onto some other legislation and further stymie him. In my opinion, just to say nothing and remain quiet would not be good enough. The other side would get suspicious and perhaps erect a new roadblock.
So there's a meeting, or perhaps an exchange of memos (I suspect), and Mel puts on a show. The man who said "I don't lose any sleep thinking about shareholders," now starts squawking about capital and mentions investors MULTIPLE times in Tuesday's hearings (seem peculiar to anyone else?). And the man whose appointment drove shares up to $5.00, the man who spoke about how well the GSEs have been running for years and about returning them to private hands, seems to have hardened his heart to shareholders.
My expectation is that VERY early in Jan 2018, Mnuchin will have a miraculous revelation, "Considering the reforms already enacted by FHFA ..." and/or "circumstances have changed, and despite mine & Mel's pleading, Congress has not acted. Therefore ..."
2. The second scenario is disastrous for us. When Mnuchin qualified his comments about a return to "private hands", what he meant but did not say, was that those "private hands" would belong to the TBTF banks. In that case, we get screwed and maybe so do some of Trumps biggest 2016 supporters. ORRRRRR maybe they all also hold big stakes in the TBTF banks and our loss will be THEIR gain. My only question would be this. If Mnuchin wanted to do the same thing that Corker, Warner, Hensarling and their gang wanted to do, then WHY did Corker show so much exasperation and surprise that things were not as he and Mnuchin had discussed (Corkers words)? Also, what did Mnuchin gain by tricking us? We are not in a position of power. The only possible answer is perhaps there were one or more legal actions that he wanted to slow down, maybe some un-filed motion or claim? Maybe Judge Sweeney (we have all noted that she HAS gone very slow). Maybe giving the idea that the new admin was intent on being more fair encouraged Sweeney to wait?
In short, either Mnuchin AND Watt have BOTH done 180's or Mnuchin was lying all along when he suggested that he was a friend to shareholders.
Thoughts? I welcome ANYONE'S constructive thoughts on this theory.
Looks like a 2009 story.
Hey Donotunderstand, I agree completely
... and in doing so, you understood that there was the risk of certain ramifications, yes?
But do you agree that to act quickly would have invited and left time for a counterpunch?
I sir, will hold your coat as LONG as you want to stand on that soapbox!!
Maybe not!! Were you listening? Capuano said (regarding building capital) ... "And Sec. Mnuchin does not want to do that, right?" Did you HEAR Watt's answer??
"No, I wouldn't say that!"
GO CAPUANO !!!
Capuano just opened Pandora's Box (Capital Reserves)
Is Hensarling bleeding? because he just got TAGGED by ranking committee member Waters !!
$3.24 has printed at least once and volume has been 1.6 mil in the first 15 minutes.
We're all a little edgy Travel5
I had assumed that the run up as we approached the end of the quarter was the usual, traders buying shares just in case the NWS was cancelled. In which case, as had always happened previously, the share price would drop off once it was confirmed that the dividend was, or would be paid. But this time news hit that the dividend would be paid and shortly thereafter, there was a quick upward spurt. Did this seem peculiar to anyone else? Any theories?