american banker article on Repub appetite for reform

[skibrian]

WASHINGTON — While lawmakers have grown increasingly pessimistic about the chances to significantly revamp the Dodd-Frank Act, they are hopeful that housing finance reform — which has bedeviled Congress for the past nine years — may finally have a shot at enactment.

Speaking Thursday before the Women in Housing and Finance group, Senate Banking Committee Chairman Mike Crapo conceded that regulatory reform was a tough lift given ongoing partisan tensions, but signaled that may not be the case with reform of Fannie Mae and Freddie Mac.

https://www.americanbanker.com/news/republicans-increasingly-optimistic-about-housing-finance-reform

can't copy the rest...

[SimSla]

As long as it is reform i am game. Can't have our hopes high though. This SOB already tried to wipe us out once.

[skibrian]

no shit.  i don't like his type of reform.

I report, you decide.

----paraphrase fox news

[SimSla]

Way too many things are happening in one day. News for a settlement,FOIA law, news for legislative sollution. And this is not counting white papers from prety much everybody in the last couple of days. Way too much smoke.

[18436572]

I wonder if the Collins case has them rattled? Maybe wishful thinking on my part. I think Delaware will be one of the next to fall.

[SimSla]

Fall as in plaintive's loss??

[18436572]

Yeah. They're going to say HERA supersedes all state law, Fannie isn't really a Delaware corp and only follows DE law for corp governance purposes.

[skibrian]

Oh, and SimSla, among all the trial balloons you mentioned, don't forget the biggest one:  War With North Korea?  Trial balloons galore going up on that issue!!!

[SimSla]

I hear you ski. We have seen this before. I am hoping this time it will be different. Statistics is not on our side though.

[seysmont]

I don't know, these things don't rally on good news like that. They rally for real on bad news. I don't see any good news, so probably it's for real. Plus the buyers are serious in preferreds. It's across the board, not just the liquid ones. On a good news we didn't break pre-Lamberth highs. NWS was the first time they broke out from pennies into the new trading range. No good news either. We probably will trade towards whatever the resolution is way before actual resolution. Why would they make any sense? They clearly don't want to gap on good news, so it will rally into the final range before any news. Why not? Why would any of this make any sense?

Post edit: Will probably sell off on resolution.

[Achilles]

Agreed. I can't identify any real support for the shareholders in government. This may be the single last bipartisan effort in US history, screw the shareholders.

[Achilles]

I agree Delaware will not succeed. In reading the documentation it is clear the Judge has a free ride because there is no Delaware documentation validating that Fannie is a Delaware Corp. Similarly Freddy is not a Va. Corp.

[SimSla]

There is no Federal Business Law. HERA is not Federal Business Law. Hence why the Bylaws specify the Delaware business law as governing law. If the Delaware business law was contradicting HERA the Bylaws were not going to include it as governing law. Do you really believe a former Delaware Supreme Court justice was going to take on a case that was dead in the water.

[joseph s]

Agree Sim. But. No other judge has yet. My enthusiasm is greatly tempered on court action. Greatly.

[SimSla]

As the saying goes " Follow the money" if you want to find out the truth. By the time this is over the government would have taken close to 300 billion. Just for comparison TARP was 750 billion and Congress refused to give the money the first time they voted. 300 billion is a lot of money even for the United States Government. No judge in the lower courts will rule in our favor and be accused of taking food from the mouths of orphans. First the politicians will agree and then the courts will rule.

[seysmont]

What are the real options, though? 

Say they do a receivership. How would it work without bonds not being in default? Say they can. They wind down the enterprises and get all residual value to sr pfds. I'm not even sure they can do that, because the liquidation on those are $1B a piece. But they break more rules. But then they have to create and fund new entities and sell those. Question, do they get the money they put in into new GSE's with identical charters out? Of course not. Those will be well capitalized and worth a fraction of what the government put in. That's a major loss.

So receivership is out of the question. Then there is conservatorship that keeps going indefinitely. That's really the worst case scenario. You have stake in something but not really and it keeps happening. 

Then there is release from c-ship. If you are pfds holder, you are protected from dilution. You can hold out. They have to entice you to convert not to have defaulted pfds hanging around. 

I don't think courts make much of a difference unless c-ship is indefinite. I don't see the wipe out and I don't see 20 cents on the dollar work out. The worst case scenario is nothing happens for a while, and everyone in DC is saying its not the case. I don't see any risk at this valuation. 

[keyow...@gmail.com]

Seys, that's basically how I see it. I go round and round, and I end up right there. No receivership, no status quo, not pennies on dollar but not rv either.