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David Sims

 
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  • Fannie And Freddie: Financial Disclosures Needed On Guarantee Fee Assets [View article]
    Amy,
    I appreciate your efforts to keep me accountable. Here's my story. In August 2009, I started buying the preferred stock. Early in 2014, I sold all of my preferred and bought common shares. My family is still invested in preferred, but my personal holdings are all common. I have no financial interest in their holdings.
    Nov 13, 2014. 08:14 AM | 2 Likes Like |Link to Comment
  • Why Gilead Sciences Stock Is Still A Buy [View article]
    I'd like to add that Nomura upgraded the stock this morning. Price target $152.
    Nov 10, 2014. 11:22 AM | 9 Likes Like |Link to Comment
  • Carney at it again on Fannie Mae [View news story]
    "Do not answer a fool according to his folly, or you yourself will be just like him."

    It would be nice if people started to ignore this guy.
    Nov 10, 2014. 08:47 AM | 13 Likes Like |Link to Comment
  • Carney at it again on Fannie Mae [View news story]
    Everyone of us can point out a scenario where the government continues to screw over the private sector. Carney just has a platform and megaphone with the WSJ.

    He fails to mention the scenario where the government's Senior Preferred is actually declared "paid in full." In that case, Fannie would have earnings of $14.8 billion on diluted shares of 5.74 billion. This is actually $2.58 per share in earnings.

    The earnings recapture rate would then also surge and the entities could recapitalize in about 5 years or less, versus the 11 years that Carney mentions.
    Nov 10, 2014. 08:45 AM | 6 Likes Like |Link to Comment
  • Carney at it again on Fannie Mae [View news story]
    Everyone of us can point out a scenario where the government continues to screw over the private sector. Carney just has a platform and megaphone with the WSJ.

    He fails to mention the scenario where the government's Senior Preferred is actually declared "paid in full." In that case, Fannie would have earnings of $14.8 billion on diluted shares of 5.74 billion. This is actually $2.58 per share in earnings.

    The earnings recapture rate would then also surge and the entities could recapitalize in about 5 years or less, versus the 11 years that Carney mentions.
    Nov 10, 2014. 08:45 AM | 13 Likes Like |Link to Comment
  • Civil Rights And Shareholders Groups Ask For FHFA Action [View article]
    I'll tell you once I see the business plan.

    Questions:
    How much capital is required by the CSS?
    What accounting ramifications does this have for the GSEs?
    Does this mean the Net Worth Sweep will end soon?

    I don't see how they can build a new platform while also sweeping all net worth for deficit reduction.
    Nov 5, 2014. 10:22 AM | 1 Like Like |Link to Comment
  • Is AbbVie's Bullishness On Its Hepatitis C Drugs Valid? [View article]
    You had me at "So if AbbVie is only at 90% cure rate for type 1a w/o ribavirin and Gilead is at 98%, then based on Gilead's statement, the FDA may not approve AbbVie's regimen at all except with co-administration of ribavirin.

    Whether it is FDA's view that a combo with ribavirin is approvable is to be determined, and I offer no opinion on the Agency's thinking."
    Nov 4, 2014. 09:03 AM | Likes Like |Link to Comment
  • Fannie And Freddie: It Was Never An Issue Of Solvency [View article]
    I wrote this about Freddie Mac. "The company reports to hold $140.4 billion in unsecuritized loans at amortized cost."

    I think under accounting rules it would be proper to hold these at amortized cost because they are not easily marketed or valued. However, if these loans were securitized, they might create a MBS with a 3.5%, 4%, or 5% rate. If the original loans have a 5.5% or 6% rate, then you are looking at booking gains by selling the securitized MBS or the loans themselves when rates are as low as they are today.

    http://bit.ly/1la0U7f

    I put in a 5% coupon on the $140 billion, 4% discount rate and 10 year term. My fair value for the loans is about $177 billion. THIS IS NOT THE ACTUAL FAIR VALUE. You need the exact inputs to compute the real fair value.
    Nov 1, 2014. 10:14 AM | Likes Like |Link to Comment
  • Fannie And Freddie: It Was Never An Issue Of Solvency [View article]
    It is still early in the morning for me, after Halloween. (Happy Halloween!)

    I'm not sure about the particulars of this text without doing some extensive digging. I do believe that in my article titled "Fannie Mae Has Adequate Capital To Be Released From Conservatorship" I discussed the carrying value of the mortgage assets on the balance sheet.

    http://seekingalpha.co...

    In my calculation, I computed some fair value gains for "loans held at amortized cost." I'm not sure if this relates to your statement regarding "Mortgage Asset balances or amounts shall be measured at unpaid principal balance", but I think it does.

    I pulled those numbers out of a hat. I think there is a large chance that there are hidden gains in the mortgage portfolio. Dr. Rossi mentioned that the portfolio would be wound-down to help recapitalize the entities. Look at the TLT Treasury bond index and you will see that bonds issued prior to the financial collapse are selling at a tremendous premium. If the mortgages work like a bond, they are being carried at a discounted price on the balance sheet.
    Nov 1, 2014. 09:59 AM | Likes Like |Link to Comment
  • Gilead: Still 40% Upside Ahead [View article]
    Bret,
    I'm not a biotech person. One question I had about Harvoni is whether it will completely cannibalize the Sovaldi sales? Or will there be some portion of Sovaldi that continues to sell, maybe 10% of the previous amount.

    Also, when a new market like Japan opens up, how long does it take for the drug to take off?
    Oct 31, 2014. 11:56 AM | 4 Likes Like |Link to Comment
  • Civil Rights And Shareholders Groups Ask For FHFA Action [View article]
    The government has said that they want private capital in a first loss position. If they hold common shares forever, then they are taking 79.9% of that first loss. It would need to be temporary. Or they need to auction the warrants.
    Oct 31, 2014. 10:11 AM | Likes Like |Link to Comment
  • Civil Rights And Shareholders Groups Ask For FHFA Action [View article]
    Here's the complete list copied from the civilrights.org website.

    Members:
    9to5, National Association of Working Women
    A

    A. Philip Randolph Institute (APRI)
    AARP
    AAUW (formerly known as the American Association of University Women)
    Advancement Project
    African Methodist Episcopal Church (AME Church)
    Alaska Federation of Natives (AFN)
    Alliance for Retired Americans
    Alpha Kappa Alpha Sorority, Inc.
    Alpha Phi Alpha Fraternity, Inc.
    American-Arab Anti-Discrimination Committee (ADC)
    American Association for Access, Equity and Diversity (AAAED)
    American Association of Colleges for Teacher Education
    American Association of People with Disabilities (AAPD)
    American Baptist Home Mission Societies, American Baptist Churches USA
    American Civil Liberties Union (ACLU)
    American Council of the Blind (ACB)
    American Ethical Union (AEU)
    American Federation of Government Employees, AFL-CIO (AFGE)
    American Federation of Labor and Congress of Industrial Organizations (AFL-CIO)
    American Federation of State, County & Municipal Employees, AFL-CIO (AFSCME)
    American Federation of Teachers, AFL-CIO (AFT)
    American Friends Service Committee (AFSC)
    American Islamic Congress (AIC)
    American Jewish Committee (AJC)
    American Nurses Association (ANA)
    American Postal Workers Union, AFL-CIO (APWU)
    American Society for Public Administration (ASPA)
    American Speech-Language-Hearing Association (ASHA)
    Americans for Democratic Action (ADA)
    Americans United for Separation of Church and State
    Amnesty International USA
    The Andrew Goodman Foundation
    Anti-Defamation League (ADL)
    Appleseed
    The Arc
    Asian Americans Advancing Justice | AAJC
    Asian Pacific American Labor Alliance, AFL-CIO (APALA)
    Association for Education and Rehabilitation of the Blind and Visually Impaired (AER)
    The Association of Junior Leagues International Inc. (AJLI)
    The Association of University Centers on Disabilities (AUCD)

    B

    Bend the Arc
    B’nai B’rith International (BBI)
    Brennan Center for Justice at New York University School of Law
    Building & Construction Trades Department, AFL-CIO (BCTD)

    C

    Center for Community Change (CCC)
    Center for Law and Social Policy (CLASP)
    Center for Responsible Lending (CRL)
    Center for Social Inclusion
    Center for Women Policy Studies
    Children’s Defense Fund (CDF)
    Church of the Brethren – World Ministries Commission
    Church Women United (CWU)
    Coalition of Black Trade Unionists (CBTU)
    Coalition on Human Needs
    Common Cause
    Communications Workers of America, AFL-CIO, CLC (CWA)
    Community Action Partnership
    Community Transportation Association of America (CTAA)
    Compassion & Choices

    D

    DC Vote
    Delta Sigma Theta Sorority, Inc.
    DEMOS: A Network for Ideas & Action
    Disability Rights Education and Defense Fund (DREDF)
    Disability Rights Legal Center
    Division of Homeland Ministries – Christian Church (Disciples of Christ)

    E

    Epilepsy Foundation of America
    Episcopal Church – Public Affairs Office
    Equal Justice Society
    Evangelical Lutheran Church in America (ELCA)

    F

    FairVote
    Families USA
    Federally Employed Women (FEW)
    Feminist Majority
    Friends Committee on National Legislation (FCNL)

    G

    Gay, Lesbian and Straight Education Network (GLSEN)
    Global Rights
    Glass, Molders, Pottery, Plastics & Allied Workers International Union (GMP)

    H

    Hip Hop Caucus
    Human Rights Campaign (HRC)
    Human Rights First (HRF)

    I

    Immigration Equality
    Improved Benevolent and Protective Order of Elks of the World
    International Association of Machinists and Aerospace Workers (IAM)
    International Association of Official Human Rights Agencies (IAOHRA)
    International Brotherhood of Teamsters
    International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW)
    Iota Phi Lambda Sorority, Inc.

    J

    Japanese American Citizens League (JACL)
    Jewish Council for Public Affairs (JCPA)
    Jewish Labor Committee (JLC)
    Jewish Women International (JWI)
    Judge David L. Bazelon Center for Mental Health Law (Bazelon Center)

    K

    Kappa Alpha Psi Fraternity, Inc.

    L

    Labor Council for Latin American Advancement (LCLAA)
    Laborers’ International Union of North America (LIUNA)
    Lambda Legal
    LatinoJustice PRLDEF
    Lawyers’ Committee for Civil Rights Under Law
    League of United Latin American Citizens (LULAC)
    League of Women Voters of The United States (LWV)
    Legal Aid Society – Employment Law Center (LAS-ELC)
    Legal Momentum

    M

    Mashantucket Pequot Tribal Nation
    Matthew Shepard Foundation
    Mexican American Legal Defense and Educational Fund (MALDEF)
    Muslim Advocates

    N

    NA’AMAT USA
    NAACP Legal Defense and Educational Fund, Inc. (LDF)
    NALEO Educational Fund
    National Alliance of Postal & Federal Employees (NAPFE)
    National Association for Equal Opportunity in Higher Education (NAFEO)
    National Association for the Advancement of Colored People (NAACP)
    The National Association of Colored Women’s Clubs, Inc. (NACWC)
    National Association of Community Health Centers (NACHC)
    National Association of Consumer Advocates (NACA)
    National Association of Human Rights Workers (NAHRW)
    National Association of Latino Elected and Appointed Officials (NALEO)
    National Association of Negro Business & Professional Women’s Clubs, Inc. (NANBPWC)
    National Association of Neighborhoods (NAN)
    National Association of Social Workers (NASW)
    National Bar Association (NBA)
    National Black Caucus of State Legislators (NBCSL)
    National Black Justice Coalition (NBJC)
    National Center for Lesbian Rights
    National Center for Transgender Equality (NCTE)
    The National Center on Time & Learning
    National Coalition for Asian Pacific American Community Development (National CAPACD)
    National Coalition for the Homeless (NCH)
    National Coalition on Black Civic Participation (NCBCP)
    National Coalition to Abolish the Death Penalty (NCADP)
    National Committee on Pay Equity (NCPE)
    National Committee to Preserve Social Security & Medicare
    National Community Reinvestment Coalition (NCRC)
    The National Conference for Community and Justice
    National Conference of Black Mayors, Inc. (NCBM)
    National Congress for Puerto Rican Rights (NCPRR)
    National Congress of American Indians (NCAI)
    National Consumer Law Center (NCLC)
    National Council of Churches of Christ in the U.S.(NCC)
    National Council of Jewish Women (NCJW)
    National Council of La Raza (NCLR)
    National Council of Negro Women (NCNW)
    National Council on Independent Living (NCIL)
    National Disability Rights Network (NDRN)
    National Education Association (NEA)
    National Employment Lawyers Association (NELA)
    National Fair Housing Alliance (NFHA)
    National Farmers Union (NFU)
    National Federation of Filipino American Associations (NaFFAA)
    National LGBTQ Task Force
    National Health Law Program (NHeLP)
    National Hispanic Media Coalition (NHMC)
    National Immigration Forum
    National Immigration Law Center (NILC)
    National Korean American Service and Education Consortium (NAKASEC)
    National Latina Institute for Reproductive Health
    National Lawyers Guild (NLG)
    National Legal Aid & Defender Association (NLADA)
    National Low Income Housing Coalition (NLIHC)
    National Organization for Women (NOW)
    National Partnership for Women & Families
    National Parent Teacher Association (PTA)
    National Senior Citizens Law Center
    National Sorority of Phi Delta Kappa, Inc.
    National Urban League (NUL)
    National Women’s Law Center (NWLC)
    National Women’s Political Caucus (NWPC)
    Native American Rights Fund (NARF)
    Newspaper Guild

    O

    OCA (formerly known as Organization of Chinese Americans)
    ORT America
    Office of Communication of the United Church of Christ, Inc. (OC Inc.)
    Omega Psi Phi Fraternity, Inc.
    Open Society Policy Center (OSPC)
    Outserve-SLDN

    P

    Paralyzed Veterans of America (PVA)
    Parents, Families and Friends of Lesbians and Gays (PFLAG)
    People For the American Way (PFAW)
    Phi Beta Sigma Fraternity, Inc.
    Planned Parenthood Federation of America, Inc. (PPFA)
    PolicyLink
    Poverty & Race Research Action Council (PRRAC)
    Presbyterian Church (U.S.A.)
    Pride At Work
    Prison Policy Initiative
    Progressive National Baptist Convention (PNBC)
    Project Vote
    Public Advocates Inc.

    R

    Religious Action Center of Reform Judaism (RAC)
    Retail, Wholesale and Department Store Union (RWDSU)

    S

    Secular Coalition for America
    Service Employees International Union (SEIU)
    The Sierra Club
    Sigma Gamma Rho Sorority, Inc.
    Sikh American Legal Defense and Education Fund (SALDEF)
    Sikh Coalition
    South Asian Americans Leading Together (SAALT)
    Southeast Asia Resource Action Center (SEARAC)
    Southern Christian Leadership Conference (SCLC)
    Southern Poverty Law Center (SPLC)

    T

    TASH
    Teach for America
    TransAfrica Forum
    Transportation Learning Center

    U

    Union for Reform Judaism (URJ)
    Unitarian Universalist Association (UUA)
    UNITE HERE!
    United Brotherhood of Carpenters and Joiners of America (UBC)
    United Church of Christ Justice and Witness Ministries (JWM)
    United Farm Workers of America, AFL-CIO (UFW)
    United Food and Commercial Workers International Union (UFCW)
    United Methodist Church-General Board of Church & Society
    United Mine Workers of America, AFL-CIO (UMWA)
    United States International Council on Disabilities (USICD)
    United States Students Association (USSA)
    United Steelworkers of America (USW)
    United Synagogue of Conservative Judaism (USCJ)

    V

    The Voter Participation Center

    W

    Wider Opportunities for Women
    Workers Defense League
    Workmen’s Circle

    Y

    YMCA USA
    YWCA USA

    Z

    Zeta Phi Beta Sorority, Inc.
    Oct 31, 2014. 10:02 AM | 2 Likes Like |Link to Comment
  • Civil Rights And Shareholders Groups Ask For FHFA Action [View article]
    I'm going to repost what I posted on Twitter.

    Look at AIG-WT. This is a warrant that was issued after restructuring. It trades for $24 and entitles the holder to purchase the stock for about $45, although, I think it is not exactly $45 anymore. Assuming the strike is $45 or less, the warrant has a time value premium of $15 because AIG stock is trading at $54.

    If you bought the warrant and executed it to receive shares, you would be paying $69 for shares worth $54. This is the time value premium and represents the financial leverage of the option until it's expiration date, some time in the distant future.

    Right now, the Treasury's warrants arguably have very little value, as they simply cripple the firms by diluting the shares and providing no capital.

    If Treasury were to assign a nominal strike price, it would accelerate the rate of recapitalization on the entities and shorten the conservatorship. This would actually increase the value of the warrants. If the time value premium on the $45 AIG warrant is $15, then the time value premium on a GSE warrant could easily be in the $3 to $6 range, depending on the strike price and financial model. This time value premium is larger than the current stock price and value of the existing warrants.

    A $10 warrant would provide $72 billion in capital on 7.2 billion warrants. $20 warrants would bring $144 billion in capital.

    I believe that the companies could earn $100 billion over the next five years. So, the warrant could help them achieve a 5% capital threshold at a quick pace. I look forward to more discussion by Dr. Rossi on what he sees happening. He has not mentioned altering the warrants. This is my conclusion.
    Oct 31, 2014. 09:59 AM | 1 Like Like |Link to Comment
  • Civil Rights And Shareholders Groups Ask For FHFA Action [View article]
    Warrants can be cancelled, sold, or re-purchased. They cannot be repaid. I'd argue that these warrants have no value because they add no value. They destroy value. They should be cancelled and replaced by a warrant with a strike price. Then Treasury can auction them off.
    Oct 31, 2014. 09:30 AM | 1 Like Like |Link to Comment
  • Fannie Mae: John Carney's Massachusetts Decision Supports The Shareholders [View article]
    It will be a cult stock when the P/E ratio is the same as Amazon.com's 800 times earnings.
    Oct 25, 2014. 02:10 PM | 1 Like Like |Link to Comment
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