State of the Union Januar 30, 2018

[Europegoodold]

Perhaps a bold move by the President himself on the GSE's?
Mnuchin still silent on his plans for housing finance reform. Craig Phillips even more quiet.

[Brian Adams]

Y'all are so deluded to think Trump cares at all about the GSEs. Even a little. Not a piece of evidence that he has given it a shred of thought. Sure, he has more pro-business types around him and people friendly with the hedge guys. But you are way too deep in this if you think he's going to pull a rabbit out at the SOTU and say "GSEs recapitalized! Warrants cancelled!". If he did, half of Congress would have no idea what he was talking about, and 99.9% of Americans watching would fall asleep.

[ron...@comcast.net]

“If he did, half of Congress would have no idea what he was talking about, and 99.9% of Americans watching would fall asleep.”

Then it sounds like he could do it without any resistance. 😂

[SimSla]

Well let's review the hard cold facts:

1. 3 billion capital buffer vs 0. This is the best evidence to date for the change of course.

2. Many GSE haters surprisingly are retiring in 2018: Corker, Hensarling, Stevens, Royce. I wonder why?

3. CW 2.0 on ice. ( i know Inside Mortgage Finance sources are saying the opposite but i will go with Tim Pagliara's version of the events).

 

[feralcomprehension]

We'll not hear anything during SOTU, that's for damn sure.   At the same time, I don't think FnF are as far below DJTs radar as postulated.

[Brian Adams]

Trump could 100% do it without any resistance. That's correct. Jumpstart is over. He could literally do whatever he wanted.

He hasn't.

What does that tell you?

He doesn't care. It's not a big deal to him. 

Not saying it won't happen. I think he'll do whatever his people like Mnuchin say. But I just think it's crazy to think he cares when there is 0 evidence for it.

[Brian Adams]

1. $3B is STILL the government's money per the current arrangement, short of the DTA hit resulting in a draw anyway. So really just operating cash for a government department, and a drop in the bucket as a start toward recap. (But yes, better than $0)

2. Hensarling might be retiring...into Mel Watt's seat at FHFA, so some rumors suggest is possible. That wouldn't be a good retirement (though hopefully the basics of this have been resolved long before then, anyway). Others will be good to have gone, but 0 evidence their replacements will feel differently. Also, that doesn't bear on Trump or Mnuchin's attitude on the subject. 

3. I hope that's right, but hearing Warner is still on board or at least supportive.

I wasn't posting to be negative on the GSEs. I'm long FNMA common w/ 19320 shares that I somehow didn't sell in the last week. I think there are positive developments and am hoping for a favorable admin solution once the legislative one turns up DOA like I am betting. Also hoping Sweeney keeps us in the game and can at least be used as leverage to extract a win (for Ackman in particular, somehow, as I am common). $10-$20 PPS would be nice at this point. I think there is still a decent chance of that for common.

So, I am not trying to be negative. Just trying to reset reality for people who think Trump is their white knight on this issue. Those are the same people pushing the Average Joe Plan, which pretends that Fannie Mae and Freddie Mac are actually dig sites on top of a 9 mile hole in the ground full of gold, silver, and unobtainium. I have 0 evidence supporting that Trump cares at all. I have some clues as to Mnuchin's thoughts, but even he I think could only be fairly classified as a wild card at best, having colleagues among the banks and hedge funds alike.

[Jeff Wood]

I agree with Brian 100%. If you think Trump or Mnuchin are going to do anything about the GSEs, then you are aware of some insider bribes that I have not heard about. I had hoped that they owed enough to the hedge fund boys to justify the (extremely slight) political risk of releasing the GSEs, but that is apparently not the case. Or they owe Jimmy Dimon more than they owe the hedge funds.

As I said last November, the GSEs will give the gubmint several billion dollars a quarter. Literally forever. There is not a politician alive who is going to walk away from that without some amazing, fabulous incentive to do so. It's quite obvious no such incentive exists for Trump and Mnuchin or they would already have acted.

Our best hope is Judge Sweeney.

[neo]

you can now effectively rule out any decision from Judge Sweeney's court in 2018....motions to dismiss and replies are not scheduled to end before December 2018

[Jeff Wood]

As if on cue, Politico has a delicious little piece on palace intrigue surrounding Mnuchin.

https://www.politico.com/story/2018/01/12/steven-mnuchins-ever-expanding-orbit-337493

[Crownjewels]

Fuggedaboutit!!!