If you think this is Q3, then we can kiss it good bye.. It is very easy for politicians to find delay tactics for 45-60 days and once the house and senate flips (Non political comment), then all bets are off the table for a resolution.. So you better hope for a Q1 or Q2
And I disagree on the comment period for ERCF.. It doesnt need one.
Nats, one of the first things that Pulte and Bessent did was to eliminate the public response period. He now can actually do this at anytime without a comment period. I’ve felt for a long while now that the hold up is the interest rates and the need to get Powell out of the Fed, coupled with Lamberth’s case . If the government loses its appeal on Lamberth then this whole thing could look very different than what it does now. GLTA!
Hi Nats, I had the same response to the idea that Pulte will just change the ERCF without a comment period. I will take the ROLG at his word that it is possible but as you said I think it is politically intendable and would be a reckless move if sanctioned by Bessent since there is a possibility that the MBS market would and maybe want to act in a very adverse way. One thing to consider is why Calabria set such stringent standards in the first place - maybe because he was inept but more likely in my opinion is to politically overshoot so that the market can clamor for less stringent ratios rather than risking losing market confidence that never can be reclaimed. I think the ERCF stays in place and they start a rule making comment period and most likely start adding more risk on the balance sheet which would mean that the end result would probably be the same amount of regulatory capital but a lower ratio because more risk has come on the balance sheets via retained MBS portfolio investment and stoppage and/or redemption of CRT issuance. The key will be working with the ERCF Dividend an Employee Bonus Restrictions of the ERCF which I am thinking will be done at the enterprise level since the UST will continue to hold warrants for most of its stake for some period. If the percentage restrictions are at the Enterprise level - then the Div Restrictions can be easily met since the public float even with a SPO would be easily met - most likely no more that 25% float vs fully diluted shares Great to see your comments. Happy Holidays and a Very Happy New Year to all of us!!
Hi Nats - I also think it is important to note that the last two quarterly reports from Fannie included a Return on CET1 Capital Ratio - kind of hard to think that they would unilaterally report on this ratio only to make it irrelevant
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