Replies to post #470579 on Fannie Mae (FNMA)

[Release us]

Very well said. BOOM :)

[curious999]

WRONG AGAIN i

conversrsioh of pref into common requires approval by 2/3 of pref shareholders and pls don't tell me you are that amateurish or uninformed to think this had not been addressed before moelis presented their plan.

and i'm still waiting for your link to paulson statement.if it's what i think it is, it's another incident of BAD Info

[kthomp19]

Moreover, Moelis makes little to NO MENTION of preserving affordable housing goals

It doesn't need to. Affordable housing goals are part of FnF's charters. By preserving the companies, the Moelis plan keeps those intact.

Meanwhile, Moelis promises more unjust rewards like $75 to $100 B MORE in ill-gotten gains to government as a bribe for Plan approval that rightfully should be restored to shareholders who have waited TEN YEARS for any positive vestige of reward as every other public company in history has been expected to deliver.

Right now, Treasury has $193B in liquidation preference and the rights to all net worth of the companies above $3B each. Giving that up for exercising the warrants and allowing the companies to recap is actually losing ground from where they are now, and you act like it's somehow gaining.

There are very few investors in FNMA and FMCC that would disagree with this summary.

Speak for yourself. I personally totally disagree. Don't use the echo chamber-like qualities of this board to justify speaking for the majority. Go read the CoB&F message board for some much-needed alternate perspective.

Just the few non-litigating shareholders (although only one, so far, is actually proven to be invested in either company in any form of equity) that ponied up and paid for a truly arcane Plan.

The Fairholme Fund, as an investor, is not a single person. It's a whole bunch of them.

In terms of dollar amount, preferred shareholders' current holdings are around $6.6B. Commons are around $2.7B. Since pref holders represent over 2/3 of the equity currently, why should they not get a proportional say in matters? And don't try to make this about the number of individuals invested: if that logic worked, a million people could buy one share each and swamp everyone else.

And... so... the downtrodden jump on the Moelis bandwagon, even though most do not seem to understand its potentially devious and manipulative course fueled by potentially obscene amounts of dilution. They are so fed up that they just want the nightmare to be over.

Nonsense. Again, you claim to speak for far more people than you have a right to.

I am not "on the Moelis bandwagon". I just see something like it as having a high probability of happening. I don't promote or endorse the plan, I just correct factual errors people have in trying to poke holes in it.

THERE IS NOT ONE LITIGATING SHAREHOLDER THAT HAS SPOKEN UP AND VOICED ENTHUSIASM FOR MOELIS AND HAS STATED THEY WOULD AGREE TO BECOME A NON-LITIGATING SHAREHOLDER TO JOIN IN THE EFFORT. NOT ONE !!!!!!!!!!!!!!!!!!!!!!!!!!!

Here, I'll use the same kind of emphasis.

THIS IS UTTERLY, TOTALLY, AND PROVABLY FALSE. Keep reading.

Please, somebody. Cite me one major litigating shareholder that has expressed enthusiastic support for Moelis. ONE.

From an interview with Berkowitz right after the Moelis plan came out last June (emphasis added):

Daniel Schmerin: I agree. What is your view of the recently published Moelis blueprint to restore the safety and soundness at the GSEs? Does it make sense?

Bruce Berkowitz (Trades, Portfolio): It's definitely the most pragmatic, feasible, viable path to achieve what the administration has articulated as its objective. It's the only proposal I've seen that has numeracy. It focuses on Fannie Mae and Freddie Mac as insurers - they're not banks. They come up with a way that taxpayers earn at least another hundred billion dollars by monetizing the government warrants. Think about it: a hundred billion bucks! That's real money, even in Washington, D.C. Their plan is a big win for the administration. It can be achieved through executive action and allows the president to demonstrate his ongoing commitment to draining the swamp by upholding the rule of law and by enforcing HERA.

...

I truly haven't heard one person, not a single one, offer a compelling argument for why Ken Moelis is off base. In fact, alternative proposals present serious transition risk and are really fraught with unintended consequences for America's $10 trillion housing finance system. We can't afford to get this wrong as a nation. I believe the administration implicitly understands this.

Did you read that last bolded part? I'm not the only one who doesn't see glaring holes in the Moelis plan. I would highly encourage you to read the entire interview, it has a lot more good material in it.

So there's your ONE investor/litigant, the big daddy of them all. You need to QUIT using your ignorance to justify rants that are easily proven false. It took me TWO MINUTES to find that quote, including copy/pasting it into this post. Instead of making baseless assumptions, including ones like these that are easily proven wrong, why don't you do some actual research of your own??




In the end, this post was about what I expected. A moral crusade, playing to the emotions of this echo chamber of a board, but one that didn't actually answer the question of why the Moelis plan won't happen. Like always, all you do is say why you think it shouldn't happen.

[EternalPatience]

You broke Bradford's heart. Sob sob sob ;(

[CatBirdSeat]

Awesome Post! Moderators Please Sticky.

[Commons_Cancelled]

Another Average Joe has seen the light. Hallelujah!

Sadly, all the crying and whining on internet forums will do very little to stop Moelis. As much as we would all like the $1,000/share Plan (AJP), it's just not going to happen.

Considering current prices, we would all be lucky to see $5 again. Maybe by 2020 we will again see those levels, but it's doubtful it happens before then.

#AverageJoesForMoelis

[bcde]

One needs to read Moelis comments/presentation on FHFA website.
Even Moelis is recommending some ideas from shareholders Post Card plan.

------------------------------

https://www.fhfa.gov//SupervisionRegulation/Rules/Pages/Comment-Detail.aspx?CommentId=15245

Date: 08/01/2018
Name: Landon Parsons
Organization: Moelis & Company LLC
Attachments: 32_Moelis and Co LLC-u.pdf
Rule Number:RIN-2590-AA95
Federal Register Citation: 83 FR 33312 CFR: 12 CFR Parts 1206, 1240, and 1750


Preliminary Recommendations

Our primary recommendation is that FHFA direct the GSEs to submit Capital Restoration Plans, as contemplated by HERA

While Moelis’s analysis supports the feasibility of raising and retaining sufficient capital at the GSEs to meet these requirements, the Enterprises would benefit from engaging their own financial advisors to construct such plans

Such analysis is also necessary to allow FHFA, along with the Treasury Department and other relevant administrative agencies, to make fully informed decisions about potential paths for GSE reform

Our second recommendation is that FHFA pause the Net Worth Sweep so that the GSEs can begin to retain capital

Our analysis, which we believe would be replicated by independent financial advisors to the GSEs, indicates that a second prerequisite to the GSEs achieving these capital requirements is reduction of the balance of Senior Preferred Stock held by Treasury, which currently precludes any efforts to externally raise or retain core capital and serves as a block to any dividends to common equity or preferred stock

[Rumpel]

Good post, Yank....

[rekcusdo]

Your reasoning makes no sense.

That being said, I agree with the conclusion.

[KenKong]

Also ... yes, Moelis had discussions with the FHFA (Watts). Watts will not be the head of the FHFA much longer. Trump will have his person in charge, for what ever His plan will be. So, all “talks” with Watts, Obummer’s head of FHFA in name only, is a moot point.

[pka1639]

At the very least, post of the month. My feelings word for word.

[cfljmljfl]

Yank could not said it better.