Fannie Mae & Freddie Mac (FNMA / FMCC)

William Ackman · 2014-05
arc beats above · slides in the middle · loops below · scroll → 3 LOOPS
SETUP TENSION ANALYSIS EVIDENCE RESOLUTION APPENDIX
HOVER FOR DETAILS · CLICK A SLIDE FOR FULLSCREEN · STEP 5
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Deck intelligence map

5
coverage by narrative range · generated from this deck JSON

Slide inventory

111
every slide · same image gating as the playbook
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Slide 1
front_matter
Open slide detailBeat · Situation & Context
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front_matter
Open slide detailBeat · Situation & Context
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Slide provides a snapshot of the GSEs' market position and financial state as of May 2014.establish_context
Open slide detailBeat · Situation & Context
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transition
Open slide detailBeat · Situation & Context
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establish_context
Open slide detailBeat · Problem & Complication
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cite_precedent
Open slide detailBeat · Problem & Complication
07
establish_context
Open slide detailBeat · Problem & Complication
08
establish_context
Open slide detailBeat · Problem & Complication
09
The chart illustrates the market share shift in residential mortgages over three decades.establish_context
Open slide detailBeat · Problem & Complication
10
The chart illustrates the expansion of GSE market share at the expense of other categories, with a notable temporary spike in Private-Label MBS leading up to thanalyze_data
Open slide detailBeat · Problem & Complication
11
The chart highlights the shift in market dominance toward GSEs following the 2008 financial crisis.analyze_data
Open slide detailBeat · Problem & Complication
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transition
Open slide detailBeat · Problem & Complication
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analyze_data
Open slide detailBeat · Problem & Complication
14
The chart uses a dashed oval to highlight the US column. The source is Dr. Michael Lea, 2010.compare_peers
Open slide detailBeat · Problem & Complication
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summarize
Open slide detailBeat · Problem & Complication
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The U.S. column is highlighted with a dashed oval to emphasize its outlier status regarding MBS funding.compare_peers
Open slide detailBeat · Problem & Complication
17
establish_context
Open slide detailBeat · Solution & Approach
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summarize
Open slide detailBeat · Solution & Approach
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The slide uses a hierarchical structure to contrast the risk profiles and purposes of the two business lines.present_framework
Open slide detailBeat · Solution & Approach
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transition
Open slide detailBeat · Solution & Approach
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summarize
Open slide detailBeat · Solution & Approach
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summarize
Open slide detailBeat · Solution & Approach
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summarize
Open slide detailBeat · Solution & Approach
24
Uses a stacked bar chart to illustrate capital stack seniority.present_framework
Open slide detailBeat · Solution & ApproachLoop · Before After
25
The slide uses a causal chain to explain why guarantees issued during downturns are lower risk.present_framework
Open slide detailBeat · Solution & ApproachLoop · Before After
26
The chart uses a grouped bar format to compare two entities over time.analyze_data
Open slide detailBeat · Solution & ApproachLoop · Before After
27
analyze_data
Open slide detailBeat · Solution & ApproachLoop · Before After
28
The chart uses a broken y-axis (indicated by the tilde symbols) to accommodate the extreme negative values in 2008.diagnose_problem
Open slide detailBeat · Solution & ApproachLoop · Before After
29
The chart uses a split-view to contrast massive losses against a small capital requirement.diagnose_problem
Open slide detailBeat · Solution & ApproachLoop · Before After
30
The slide uses a grouped bar chart to show the discrepancy between accounting provisions and actual realized losses, culminating in a cumulative comparison.expose_contradiction
Open slide detailBeat · Solution & ApproachLoop · Before After
31
The slide uses a before-after framing to contrast accounting-based losses with actual credit performance.analyze_data
Open slide detailBeat · Solution & Approach
32
The slide uses a comparison of portfolio share vs. loss share to highlight the high risk of specific loan types.diagnose_problem
Open slide detailBeat · Solution & ApproachLoop · Cost Of Inaction
33
The slide uses a visual comparison between a negative bar representing losses and a positive bar representing capital requirements to argue for the adequacy of analyze_data
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
34
The chart uses a stacked bar format to show the contribution of each entity to the total quarterly profit.analyze_data
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
35
The slide highlights the regulatory mandate by FHFA to increase G-fees to encourage private sector competition.analyze_data
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
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summarize
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
37
The slide highlights the impact of reserve releases on GSE profitability.analyze_data
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
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transition
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
39
The slide uses a simplified balance sheet representation to show how high leverage (40x) generates ROE from a small net interest spread.analyze_data
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
40
The slide uses a direct quote to establish authority and frame the problem with the GSEs.cite_precedent
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
41
The chart highlights a significant growth trend leading up to the financial crisis, with a red arrow emphasizing the upward trajectory.analyze_data
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
42
The slide highlights the excessive leverage (6x) of risky assets relative to capital requirements.diagnose_problem
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
43
The chart highlights the profitability of the FIA business segment for the two GSEs before the 2008 financial crisis.analyze_data
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
44
diagnose_problem
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
45
diagnose_problem
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
46
The slide uses a grouped bar chart to compare two entities over time. The negative values are represented below the zero axis.diagnose_problem
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
47
The slide highlights the government-mandated wind-down of assets to a $500bn limit.summarize
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
48
transition
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
49
establish_context
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
50
Slide 49 of a presentation deck.present_framework
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
51
The chart illustrates the transition from losses to profitability followed by the implementation of the 100% dividend sweep.analyze_data
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
52
The slide uses a structured list to present legal grievances, concluding with a status update on ongoing litigation.preempt_rebuttal
Open slide detailBeat · Evidence & ProofLoop · Cost Of Inaction
53
The chart uses a grouped bar format for annual data and a summary total at the end.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
54
The slide uses a bar chart to visualize the delta between actual payments and original obligations.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
55
The slide illustrates the 'excess' dividends paid under the current sweep compared to the original terms.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
56
transition
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
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summarize
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
58
preempt_rebuttal
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
59
The slide uses a list of six reasons to support the thesis that private capital is insufficient.diagnose_problem
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
60
The slide uses historical data to frame a problem of scale regarding capital requirements.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
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The slide uses historical IPO data to frame a problem regarding capital availability for new market participants.cite_precedent
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
62
diagnose_problem
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
63
The slide uses a hypothetical cost structure based on Essent Group to demonstrate the unprofitability of new entrants.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
64
The slide uses a scenario table to demonstrate the impact of varying capital requirements on required G-fees.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
65
The slide uses a combination of a line chart for interest rates and a bar chart for origination volumes to demonstrate sensitivity.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
66
The slide uses a quote from a political figure to establish a precedent of government overreach affecting market confidence.cite_precedent
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
67
The slide highlights a significant contraction in the market value of PMIs, with a specific callout noting a 90% decline through 2012.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
68
The slide highlights that PMI coverage is a small fraction of total mortgage originations, peaking at 15% of originations in 2007.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
69
The slide uses a historical narrative to support the thesis that private capital in this sector is inherently pro-cyclical and unreliable.establish_context
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
70
The chart illustrates the collapse of the private-label mortgage market following the 2008 financial crisis.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
71
summarize
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
72
The slide uses a dual-axis chart to show the inverse relationship between total mortgage volume and bank retention share.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
73
summarize
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
74
preempt_rebuttal
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
75
Uses a testimonial/quote from industry associations to bolster the argument against change.preempt_rebuttal
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
76
The chart illustrates the shift in market dominance from private capital to GSEs following the 2008 financial crisis.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
77
The chart uses an inverted Y-axis to represent spread in basis points.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
78
frame_problem
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
79
frame_problem
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
80
present_solution
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
81
transition
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
82
summarize
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
83
propose_solution
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
84
The slide uses a waterfall-style comparison to justify a capital increase.propose_solution
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
85
The slide uses a checkmark/cross matrix to justify a lower capital requirement for GSEs.compare_peers
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
86
The chart uses a stacked bar visual to represent LTV coverage ranges (0-80% vs 80-100%).compare_peers
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
87
summarize
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
88
The table shows a hypothetical scenario analysis of GSE financial performance during the 2007-2011 period.preempt_rebuttal
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
89
The slide uses a financial model to argue that current g-fees are sufficient to cover historical loss rates, preempting arguments that higher capital requiremenpreempt_rebuttal
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
90
The slide uses a downward arrow to visually emphasize the reduction strategy.propose_solution
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
91
plan_implementation
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
92
cite_precedent
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
93
summarize
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
94
summarize
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
95
The slide explicitly notes that this estimate excludes income from investing the float produced by the guarantee business.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
96
The slide uses a hypothetical scenario to demonstrate earnings potential based on regulatory fee adjustments.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
97
The table uses a waterfall-style logic to arrive at net income from G-fees.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
98
quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
99
The slide uses a buildup approach to determine the capital gap.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
100
The chart shows a transition from dividend-heavy payments to retained earnings for common equity.analyze_data
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
101
The chart illustrates a 10-year earnings projection totaling $146 billion.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
102
The slide includes a secondary estimate regarding warehouse mortgage loans at the bottom.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
103
The slide uses a bar chart to demonstrate the inverse relationship between g-fee levels and the time required to reach a specific capital ratio.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
104
transition
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
105
The slide uses a standard valuation buildup approach to derive future share price and warrant value.show_valuation_bridge
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
106
The slide uses a scenario-based valuation approach to demonstrate the upside potential of GSE reform.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
107
The slide uses a before-after style comparison to illustrate the 'effective' ownership increase.quantify_opportunity
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
108
The slide uses a checkmark/cross comparison matrix to advocate for a specific policy path.compare_peers
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
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The slide references historical precedents (AIG and Citi) to support the proposed conversion strategy.propose_solution
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
110
The slide uses a blue header for the core recommendation and a yellow callout box for the concluding thought.propose_solution
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction
111
The slide uses a list format to enumerate the negative impacts of inaction.diagnose_problem
Open slide detailBeat · Impact & Next StepsLoop · Cost Of Inaction