hardincap

sure, theres plenty berkowitz knows that we don't. those settlement "communications" may or may not have been the driving factor in his decision to add. he could have been just rebalancing his portfolio to pre-lamberth for all we know. its tempting and seductive to speculate on what kind of settlement communications transpired, given our long bias, but personally I try to avoid going there altogether bc i find it futile to speculate on things we have so little reliable information on, not to mention info that could be construed in ways that are both favorable and unforable to our position

I didnt assume you meant that, just calling it out bc it seems to be abundantly used in this thread (and many others)

@merkhet that reasoning ("he must know something we dont") is a form of grasping at straws and has gotten investors into ALOT of trouble in the past

@colin will the government be able to wipe out current shareholders and get new ones? absolutely yes. they'll do some combo of spin and reform, and say something to the effect of "the previous model was broken. it has now been fixed" fairholme has 16.4 as of end of last year. check his facts sheet.

which makes it all the more curious how he has the confidence to bet >16% of his mutual fund on fannie mae. I think its clear from his public comments that he underestimated the political obstacles to freeing fannie. bethany mclean had this great line in her book: "what makes sense using New York financial logic is borderline insane when you apply a Washington political calculus." will financial logic eventually win over washington politics? i think the chances of that are next to nil if we lose all legal cases

I was referring to the scenario where shareholders lose all cases and nws is valid

http://www.businessinsider.com/bruce-berkowitz-on-fannie-mae-and-freddie-mac-2016-3 This part makes me think he's being disingenuous when he says fannie is not a binary investment: Theres no chance these "narcissists" would voluntarily restore fannie commons and preferreds after going through legal war with the hedge funds. when it comes time to recap they'll spin it and/or do just enough reform to get dumb money to invest

I agree there is no alternative, but does that necessarily mean the preferreds will be recovered? The two statements are not the same. I imagine there are scenarios where fannie is largely restored, allowed to rebuild capital, etc, but junior preferred holders are still shut out from profits. If shareholders lose all cases, what incentive does the government have in doing anything that is "favorable to the hedge funds"?

It's very interesting to me that Berkowitz believes this isn't a binary outcome, whereas Ackman readily admits the common stock can go to zero. If litigation fails, what other road to recover is there? Why in the world would the government settle if they win all the cases? It makes me wonder if he's being disingenuous or delusional

it also weird that plaintiffs consented to the motion to stay the deadline.. why would they do that?

We hear what we want to hear...

Did I hear him right when he said there were settlement negotiations in 2015?

makes me wonder if all the battling on the legal front is actually counterproductive to our cause, by making the government dig in their heels and distracting them from the bigger picture, which is that we need to move on from the conservatorships

I dont know how you can not be worried, given that its in the hands of judges who are human and subject to the same biases and frailties as the rest of us. even if the nws was in fact unlawful, there must be an incredible amount of pressure on the judges to look the other way, given the colossal sums of money (not to mention political capital) at stake for the government. whats more, now that there is precedent set with lamberth, subsequent judges can play the "me too" card. there is less risk to them personally to go with the tide than against.

didn't see steele refer to saxton. where did you see that? sent a brief one liner email to him at msteele at potteranderson

seems v sloppy of them to do this in such a high profile case. even j steele was confused

@cherzeca, you already made this point but I think it bears repeating I understand reade's rejecting the motion to dismiss as "moot" doesnt necessarily mean she's rejecting the motion on the merits.. but the fact that she's asking for an administrative record instead of giving the FHFA a chance to "un-moot" the dismissal via an amended motion to dismiss seems to imply that the cause for dismissal via mootness is more substantial than some technicality edit: I hope i/we are not stretching here to satisfy our long bias

If they fail to produce an admin record, that puts them in violation of the APA. Is that not sufficient for reade to invalidate the nws? how do you lose a summary judgment if they fail to produce an admin record?

So they said they didn't maintain an administrative record but are now required to produce one. Can they produce one post hoc? (they already have the discovery materials) or are they forced to tell the judge they don't have one?

Yes, fhfa stated they didnt have an administrative record Are they allowed to produce one posthoc? Common sense says no, but I'm not a lawyer.

Few thoughts: 1) it seems reasonable to assume the discovery provided evidence that convinced judge reade that the government's argument is disputable. so now the burden is on the government to overcome these issues through the administrative record doc. 2) 30 days seems really short. Should we assume there will be a delay?

The next month will be interesting. Fairholme conf call end of the month, and Ackman interviewing Berkowitz at an investment conference Mar. 8

Given that he was quite bullish to begin with, I think all you can derive from his adding is that the discovery didn't invalidate his thesis, not that the discovery added something that made him even more bullish. He could just be rebalancing his portfolio %-wise to what it was pre-Lamberth

nothing more than his ongoing campaign to dispel myths: http://howardonmortgagefinance.com/2016/02/03/thoughts-on-delaware-amicus-curiae-brief/

He's most likely referring to the CFO testimony. "In light of Ms. McFarland’s testimony, Mr. Ugoletti’s sworn statement that neither agency envisioned recognition of the deferred tax assets is not credible"