Goldman Starch

Ex-Morgan Stanley, UBS, SocGen derivatives trader. Mortgages, rates, bitcoin. Educational only. Not financial advice. Views are my own.

[Goldman Starch @goldmanstarch]

@MichaelHal54147 thank you for watching. i appreciate it! i go through more scenarios in the 30 minute youtube version of this video $fnma

[Goldman Starch @goldmanstarch]

$FNMA Fannie Mae: The mechanics of that deal are smaller than most people think. Ackman's own presentation says treating the senior preferred as repaid can be done with a letter agreement between Treasury and FHFA... It needs one signature from Treasury and one from FHFA, and Congress doesn't have to vote on it. That's why this stock moves 50% on a single social media post, because everyone holding it knows the whole outcome fits on a few pages.

[Goldman Starch @goldmanstarch]

@Dave92626232148 @revgalerivs in the 31 minute youtube video i walk through both the bull case and also the bear case for a balanced view. thank you for watching

[Goldman Starch @goldmanstarch]

@revgalerivs I appreciate it, reposting helps the channel thank you $fnma

[Goldman Starch @goldmanstarch]

@SnagsLewis1978 The longer 31 minute youtube $FNMA video looks at the events leading up to now, an interesting backstory https://t.co/BF2iDTlv3a

[Goldman Starch @goldmanstarch]

@SnagsLewis1978 Thanks for watching best wishes @SnagsLewis1978

[Goldman Starch @goldmanstarch]

@pratjoey Legendary thank you for watching @pratjoey

[Goldman Starch @goldmanstarch]

wild times. in this video i talk about how Carville said in the 90s he wanted to come back as the bond market because "you can intimidate everybody." Liz Truss also learned this the hard way in 2022: gilt yields spiked, the Bank of England had to step in, and she was out in 7 weeks. Now wild to me that Bessent says "he's the house". The bond market has been the house for 30 years. thanks for watching check out the full video on youtube

[Goldman Starch @goldmanstarch]

The US GOV bond vigilantes did not let the US treasury secretary's manipulation plan go unchecked.

Tuesday: Scott Bessent says "I am the house now. You can bet against me if you want."

Wednesday: Treasury triples its buyback to $6B. The 10-year goes UP to 4.84%, highest close since 2023.

UPDATE SINCE FILMING : 4.97%. Knocking on 5% while Bessent e is still holding the chips. $TLT watch the full 43 minute video

[Goldman Starch @goldmanstarch]

Watch the full video, 43 min: https://t.co/wCumF6ppCX

[Goldman Starch @goldmanstarch]

hi great account, and i thank you for watching. Here is what i commented on sept 9 on my original post:

"Appreciate your question. Here's my opinion: the $83M is the equity of the book, about 4.5% move in home prices and that's gone. So i'm saying that's the number that triggers things, because the borrowing base is set off the collateral and the advance rate. Parent cash isn't an input to it. The lenders cant reach the parent cash if the houses go bad (non-recourse). They take the collateral and thats the end of it.

Put the $896M behind the book to look at the solvency question. That's how you see the runway.

But spending the runway is exactly what costs shareholders: in 2022 they ate $1.4B, still kept $1.1B in cash, and the stock dropped 96% from the high. 83M is the trigger and the $896M is the runway."

So you see solvency wasn't the main issue in recent weeks, and in the complete youtube video i outline both the bull case and also the bear case for a balanced analysis.

I never said bankruptcy. Equity as a call option is a statement about their payoff structure, not their solvency.

Also: watch out that $962M includes $66M of restricted cash. Unrestricted is $896M, and the restricted portion is largely posted against the facilities that's not ring fenced.

Also: Non-recourse protects you in a default you'd never voluntarily take. It doesn't protect you from a borrowing base. These facilities test on collateral value and on age, so when either moves, the advance rate compresses and the borrower posts cash or pays down. Continuously, not at maturity.

In the complete 30 minute video of this youtube clip, i go over the bull case too, in this same video, for a balanced view. Thank you for your comment.

[Goldman Starch @goldmanstarch]

@theopendoorguy thank you for supporting the youtube channel, legend, i appreciate it

[Goldman Starch @goldmanstarch]

@bidask123 Check out the youtube in depth analysis for the bull case and the bear case together https://t.co/1n9DV7TWi6

[Goldman Starch @goldmanstarch]

$OPEN OPENDOOR stock is short volatility with 22x leveage- Opendoor's equity is a call option and almost nobody prices it that way. $1.845B of houses. $1.762B of debt against them. That leaves about $83M of their own money underneath the whole book. A 4.5% cushion. 22x leverage. …There is no floor, because the assets ARE the strike. An option that goes out of the money doesn't settle at book value, it goes to zero. It closed at $3.07 with a 52-week low of $3.01.And the upside is violently convex for the same reason. 51 cents to $10.52 in 2025 without the business changing 20 times. watch the full video

[Goldman Starch @goldmanstarch]

@TapeSommelier Thanks for watching $OPEN analysis the full videos are https://t.co/1n9DV7TWi6

[Goldman Starch @goldmanstarch]

@zerohedge the most detailed breakdown that exists on youtube is here if interested https://t.co/9pn8eO2SRN

[Goldman Starch @goldmanstarch]

Who is buying us debt, This is the most complete breakdown on youtube: 43 minutes.
https://t.co/wCumF6ppCX

[Goldman Starch @goldmanstarch]

I filmed this lengthy analysis before today's 30 year auction, calling for a 3 basis point tail. It tailed 2.7 basis points. Against a 0.13bp average. That's 20x normal. Everyone is calling it a failed auction. Look at the dealer takedown instead. Primary dealers took 2.2% against an 11.5% average. Foreign buyers took 79.5% against 66.4%. Bid to cover 2.61 against 2.38.
Dealers getting stuck with the bonds is what a failed auction looks like. This was the opposite. Real money took the entire thing. The buyers showed up. They just repriced you. $TLT

[Goldman Starch @goldmanstarch]

Welcome to 7% mortgage rates

[Goldman Starch @goldmanstarch]

Appreciate your question. Here's my opinion: the $83M is the equity of the book, about 4.5% move in home prices and that's gone. So i'm saying that's the number that triggers things, because the borrowing base is set off the collateral and the advance rate. Parent cash isn't an input to it. The lenders cant reach the parent cash if the houses go bad (non-recourse). They take the collateral and thats the end of it. Put the $896M behind the book to look at the solvency question. That's how you see the runway. But spending the runway is exactly what costs shareholders: in 2022 they ate $1.4B, still kept $1.1B in cash, and the stock dropped 96% from the high. 83M is the trigger and the $896M is the runway. I don't believe this is a solvency issue necessarily, and in this video i outline both the bull case and also the bear case for a balanced analysis.