Fairhope punting before Discovery ends?

[dgj...@gmail.com]

Maybe Barbara Marlon on the old ymb was right..."no smoking gun?". The smoking gun is the entire swamp. This will end with Barry in Robert's chambers explaining that this too is a tax..

[littlede...@gmail.com]

Goober...we lost all the cases....da gubment is using a bs defense...and it held and from what berko sees it will continue holding. Probably the amendment is shot....if court battles are over...it comes down to restructure....go figure...devil

[fwc...@gmail.com]

Hmm, are not the documents in Sweeney's case being reviewed right now? They were requested so Berko's lawyers had a good idea there was something in them. It's always dark and then ping something rally's with this darn investment/trade. I still have to believe that J. Paulson and Berko have some influence with DT. JMHO, it's a tough one again right now.

[dgj...@gmail.com]

We already have lots of something and now Fairhope approaching a hacktivist SCOTUS with what Pratt would not hear. If SCOTUS upholds..... To me, this is a last ditch effort, possibly short circuit in the Bhatti lawsuit.

[joseph s]

Fairhope is a town in AL across from Mobile.

Quaint little town.

[Duncan Macleod "Beta"]

Maybe absurd T knows the place.

semi related.  was listening to a song" Angel from Montgomery"  Susan Tedeski singing is beautiful.  

[dcj...@gmail.com]

"Fairhope" seemed a clever auto-correct by Google so I refrained from fixing it...

[FreeFannie&Freddie]

Government does not want to pay a damn thing to greedy junior preferred shareholders.

There is a way forward, and it looks like the Average Joe has a great idea!

[joseph s]

Lol on Fairhope. I think that is where Luther Strange met w folks.

[littlede...@gmail.com]

Ok ok...let da devil be blunt. If junior do not get paid, commons do not get a penny either. Actually, if juniors is one cent short on the RV, commons will not get a penny in any outcome. So, lets put that to rest.....and before you refer to gimmicks like impac used, the gov is not going to use any gimmicks....its not what they do....for what?...help commons...get real and get real with reality.....utility is coming....denial or not....warrants will be exercised....denial or not...you will either make more money with preferreds or make less with commons. I know its hard for radical commoners to hear this...but its the truth for you....da devil is just preparing you for reality...go figure...devil

[littlede...@gmail.com]

One more thing...priority rules will be executed to the fullest and will be made sure its executed....why? Because the gov holds senior preferreds....they will not let commons jump in front or benefit ahead of any preferreds. You can bet on it....go figure...devil

[joseph s]

The commons could still do better than prefs if the dont have to raise much capital.

I dont have that opinion because I hate one class or the other. I just have that opinion.

Not a recco

[FreeFannie&Freddie]

LD, Have you not learned a lesson from Impac Mortgage!?

[joseph s]

Lessons are learned with each investment. Not all scenarios are the same. Extrapolating based on your desire can cause dangerous mistakes.

The worst investors are typically airline pilots and engineers. While they are intelligent, the main flaw for investing is overconfidence.

Not a recco

[Brian Adams]

There is a 0% chance Fannie Mae and Freddie Mac are turned into utilities in my lifetime (I'm 30 years old).

What they do has exactly none of the elements that justify a utility model.

[joseph s]

1. Natural monopoly due to scale needed
2. Operate in a business where continuity of offering is vital in good times and bad(think electric power and hard line phones)
3. High barriers to entry and fairly low current margins due to regulatory structure. (If completely unregulated, they could have gouged in '08-'12

I disagree that there is nothing in common w a utility

[littlede...@gmail.com]

You know how much I am up in impac? Impho? Take a guess. I dont want to seem like always bragging like a few suggest da devil is doing. But you brought it up....go figure...devil

[joseph s]

So you did learn a lesson! Lol. Not all investments are exactly the same

[littlede...@gmail.com]

Impac is treating me well. I did not sell and am still in contact with sims. He is handling it. I got in when da goobers got in from here and I still have my shares. Nothing changed. Da devil not sure why catmandoo brings up impac with da devil. My experience is positive. I guess just like I am positive and confident on my fnf preferreds....go figure....devil

[feralcomprehension]

  The implied parallel is (IMO) that Impac continues to ignore the IMPHO owners and will (presumably) continue to do so for as long as they're able.   It could work, until they need to issue more prefs.

[littlede...@gmail.com]

What does catmandoo mean by learn my lesson? Making monies? Sounds like catmandoo should have bought in impho...

Well...it goes to show the smarts of catty boy....dose who follow him should re evaluate.....he no no dink....lets see feral.....so so....he wants to imply that commons will jump over preferreds...da devil knows....but what does cat fail to see and failed....

The gov controls the restructure and they hold senior preferreds....so da idiot dinks da gov will allow a change to da priority rules to benefit the commons? Wtf ronny? Is this your guy????.....cat wit yoy??......cat dinks or try to sell preferreds are owned by hedgies and commons are not? Wtf???.....to da friend cammy....if cat is your guy...you should be afraid......eggman dont own commons? Perry owns some common too no? Wtf? Is this....catbird...da leader of da radical commoners....da guy is a joke....dis is what radical commoners are banking on?....if it is....gooood luckz....you will need it....good ding is....da devil also dinks dere will be enough monies to feed commons too...so commons are good too but not as good as preferreds and certainly not good because if cat....he has been reduced to a board joke....just sayin...go figure...devil

[Brian Adams]

1. Why do you need scale to securitize mortgages? How is that a monopolistic function? The very existence of both Fannie Mae AND Freddie Mac suggest otherwise, particularly when they're not even a monopoly even when combined.
2. Why shouldn't a business like that be subject to market pressures and cycles? As should their products.
3. Can be accomplished with regulation, not utility structure.

I'm in this because I think shareholders have legal rights that the govt is screwing over.

But I also agree with GOP that FnF should be private and compete on same playing field as banks, once shareholders are restored. I don't buy that somehow the 30 year mortgage would disappear. It's a product consumers want, and banks will give it to them, at market rates. Other commodity securitization doesn't require monoploly level resources and privileges to pull off. Mortgages are no different.

Irrespective of what I think, the political reality is...no Republican will vote to make the GSEs a utility with an explicit guarantee.

I might be wrong, and am interested in learning.

[littlede...@gmail.com]

Two questions to start...and maybe someone else take over...da devil no no have time to drag this out this weekend....not personal...

Should the government explicitly guarantee wells fargo or jp morgans private label mbs? Heck goldman sach's?

If you are citibank, why would you offer a 30 year when you can make more offering a 3-5year mortgage...even 10 and a really maybe 15?....why make less and take on a larger timespan of risk? Unless the explicit guarantee is great. Heck...that will make the 5 big bank GSEs if the gov explicitly guarantees right? Moral hazard? Dunno...

So brian...What are your thoughts about the explicit guarantee?.....go figure....devil

[Halo Hat]

"The gov controls the restructure and they hold senior preferreds..."

They also hold 79.9% of the common stock of both Fannie and Freddie by way of the warrants, which you feel are going to be exercised. 

If their 79.9% common shares were to trade on the NYSE at anything even remotely approaching normal valuation by the market... well I'm glad to be part of the 20.1%

I feel the "Common Security" is going to happen. I don't know how, or if, current FnF shares, be they preferred or common are baked into that pie though I feel conversion of all current shares into the "Common Security" will happen in some twisted manner.

Lastly I believe [which should mean nothing to anyone but me lol] that the Utility Model does not serve the governments intentions, which is, GIVE US MONEY, WERE BROKE!

Go Preferred share holders [except the government thieves]

Go Common share holders [^]

[Brian Adams]

I'm against an explicit guarantee.

I see nothing about this industry that requires it. A transparent, regulated, free market model would work just fine.

[Jeff Wood]

There will always be an implicit government backing of the TBTF institutions. Either we need to make that guarantee explicit (and make them pay for it) or force them to become smaller. Neither one of those will happen, and the taxpayers will get screwed again. It is inevitable with our current system.

[Ace]

Welcome to the board, and the GSE - saga, Brian

I think their may be a lot of context to F&F you may just have to catch up on.  Many here question the ultimate need of the conservatorship in the first place.  They would have likely weathered the crisis without Paulson's 'bazooka intervention', and none of us would be here discussing this.

I can't recall their market share prior to 2006, but F&F were nearly monopolies by market share back then.  In 2009, 10, 11, maybe 12, they were buying over 80% of mortgages originated.  This was a big reason I bought pfds back in 2009, when I was young and spry and 30.  I've got a lot of investment fatigue re F&F, kindof running a flying-dutchman strategy, so I won't summon much better detail than the above.

As for:

A transparent, regulated, free market model would work just fine.

Let me suggest to you, as gently as possible, how refreshingly innocent that sounds.  Sure, there exist Free-ish Market forces, but the "Free Market" is where Santa Claus, the Easter Bunny, and Tooth Fairy peddle their wares.

Look at the mortgage markets across the world.  5 yr ARMs, with a balloon on day one of year six.  If the GSEs did not exist, the 30 year would not exist, because it would have never been introduced to the market in the first place.

But I also agree with GOP that FnF should be private and compete on same playing field as banks, once shareholders are restored. I don't buy that somehow the 30 year mortgage would disappear. It's a product consumers want, and banks will give it to them, at market rates. Other commodity securitization doesn't require monoploly level resources and privileges to pull off. Mortgages are no different.

Banks are welcome to compete with FnF.  No one ever said they couldn't.  What we request, as shareholders, is that GSEs not be knee-capped in order to synthesize that level playing field.

Re "market rates";  when's the last time you had lobster?  Did you haggle with your server, and motivate them to inspire their boss to call the regional manager to ask a pretty dumb question to their VP about demanding a better price on lobster, ..., or accept whatever price they charged before seeing a price tag? 

Before the GSEs, and the SCALE they commanded, the banks laid the terms, and we paid the terms.

The GSEs are special, and perhaps they should have been made utilities from the start.  Many wonder why the shares were not taken off the market back in 2008, perhaps they should have been.  The GSEs do have a certain degree of competing interests - they are chartered by the government, but privately owned.  Largely due to the sizeable debt they manage, I presume for the moment. 

If they were utilities, that allowed for shareholder ownership, their public function would persist, but their political reach as a private interest would be lessened.  I am not saying I support it, but if it happened, and I were compensated, I don't think I'd be all that upset.

Much of the 'saga' is all about perception, not not so much about facts.  The Courts may reveal the facts, or Treasury will roll over to save face, .., again, perspective.

Many here can explain this better than I, hopefully Seysmont will chime in.  Good luck.  May I ask your background?

[littlede...@gmail.com]

:)

[littlede...@gmail.com]

Good luck goobers.....go figure....devil

[Brian Adams]

Thank you Ace. 

I'm not a new GSE investor. I've had a little bit since at least 2010, and got really involved in 2012 and been long ever since. All common $FNMA. I still remember $6.35. That was quite a day. Fortunately have been able to add more since then. I used to monitor the Yahoo boards way back then, but now just Twitter and Tim Howard. Don't know why I didn't pay more attention here previously, but hungry for more information as this gets closer to the end. I think $8 PPS is a worst case for the common. $15-$20 most likely. I daydream about $75, often.

I'm a #NeverTrump conservative - classical liberal, sympathetic to libertarian economic policies. The FreeFannie battle makes for some strange bedfellows, an old school Republican teaming up with Ralph Nader, Elizabeth Warren, and Trump supporters. We're all on the same page when it comes to shareholder rights and conservatorship! As for after... as you can imagine, I am highly skeptical of explicit guarantees and utility models where they are not needed. Even here in Texas, electricity is not run like a traditional utility, where electric companies actually compete for customers (the electrical production and infrastructure is still a utility). 

I don't think Fannie and Freddie should ever have had the kind of government involvement they had in the past; they are products from the hyperactivist New Deal and were rightly privatized later. Their functions could have been and could now be performed entirely by the private sector - both opened to competition and neither an explicit or implicit guarantee - no more TBTF. You say they are special. I don't see why they should be. The 30 year loan is unique to America, and yet our levels of homeownership are barely higher, if at all, than other developed countries. I don't assume it would disappear without the GSE model as it currently exists, but if it did, it wouldn't be the end of the world. 

I don't understand the lobster argument, because that's not how it works in a free market. There are suppliers, B2B and B2C companies. Lenders are B2C. They need capital to make more loans, so they sell to the secondary mortgage market who has their own customers - MBS investors. Without a guarantee, the 2ndary mortgage market is incentivized to provide a stable return to those investors, and therefore create and package deals that have stable returns, imposing restrictions on what they buy from lenders. Lenders meanwhile want as few restrictions as possible, so they can make loans. In the free market back and forth, a balance of service and investment safety is struck - those are the market terms and model I would be happy to live with. Transparent. I don't see what is TBTF about that, or inherently monopolistic. No different than the folks who package together REITs.

Currently, the GSEs do NOT compete on the same playing field as banks. The GSEs are extended special privileges based on their status as GSEs. This should not be the case. I am all for still having 2ndary mortgage players to be regulated. Perhaps even with a Glass Steagall like rule that investment and commercial banks can't be 2ndary mortgage market providers. I don't know. I just know that a utility makes no sense.

Maybe that's pie in the sky thinking. But again, even if I'm wrong, I definitely know that a utility model won't be implemented while Republicans wield any power - even the populist/Trumpy Republicans that have taken over the party in the past two years. That is not a politically realistic future for the GSEs.

[Ace]

Thanks for the followup, Brian.  It sounds like to had the chance to get fnma when it was under 50 cents, nice.  I always meant to, never pulled the trigger.

As for special, I don't mean to say sacred, but rather unique.  Finally, from what I can tell, I don't understand the lobster argument either. ;)

Others here can better speak your language, I am no fiscal wizard.  cheers

[Brian Adams]

I got some at 0.33 or so, but a small amount and before I understood anything about it. My dollar cost average is probably about $2.

[littlede...@gmail.com]

Guarantees Smuaranteeeez...who needs 'em da goober sayz.....not sure da devil agrees but dat is coool J...cooler dan LL.....go figure...devil