rros

Only if admin implements Hensarling's :) "the new director can still institute these reforms administratively—and I call on them to do so." These proposals all look outstanding on paper. They promise innovation, competition, monumental taxpayers' protection and prosperity for everyone. Then, a bill comes along filled with the words "or" and "may".

Gasparino is really smart. Probably the smartest guy ever. Emily, you are losing focus. While it is entirely possible we may not win any case, there are few in which we made progress. That said, the focus should be where this is going. The important questions being 'will the conservatorships continue?', 'what will Watt do once the public comment period is over in November?', 'is Moelis still in play?' and more importantly 'are shareholders going to be treated fairly in any outcome?'. I think it is now universally accepted that the companies cannot operate on a 3 billion capital mark or under the current scheme. Sooner or later Treasury will provide specific guidance. They aren't idiots. And both the Federal Reserve and Mnuchin understand markets (specially real estate) are on thin ice, based on Jerome Powell's comments that perhaps the fed should go light on interest rates in the coming months.

Unfortunately, the 2012 Treasury statement is impersonal. Meaning, whether it is Geithner, Lew, Mnuchin or someone else down the road warming up the Secretary's seat this policy stands. Mnuchin has only issued statements regarding the government owning the companies. But nobody from the WH or Treasury has spoken regarding this policy or, in general, the nws. Perhaps, investorG is correct in his assumption that the most we can hope for is an across-the-board settlement whereby Jrs. receive 50-75% of face value. And after the last court loss I am inclined to think 50% is more realistic. Unlike Hindes and Tim Howard, I have little faith on any Sweeney's court favorable ruling. Other than a small payout, if at that. Trump's appointment should only be seen under the light of an exchange. What will Sweeney's reciprocal action be we do not know. But this will be unveiled soon. I cannot envision an administrative solution that will reward all shares and provide -as per Moelis- full face value to the Jrs. after all the loses we have taken. Why would Treasury defend itself so hard or join FHFA in its defense only to let shareholders have it? Whereas a settlement will pave the way for terminating all lawsuits and perhaps retiring shares at a lesser cost. So I share Emily's feelings here. And on the same line of thought I equally cannot see Treasury leaving shareholders out in the cold zeroing all shares. So while no reward, some reward. My one sure bet is that both John Paulson and Bruce Berkowitz (and perhaps Ackman) already know what is coming. In the end, I think Treasury will be happy to see investors go away with the feeling the fight was not worth the money, time and effort. Even if in the process some money was made. Final goal being to deter future litigation, related or unrelated.

C'mn, Mr. Hindes... if Treasury/FHFA does it, it's not illegal. Haven't you learned anything from 'tricky Dick'? Hindes lawsuit is a bit esoteric... judging by past rulings, a bit not-going-to-happen.

I agree with this. also, if there is any serious contemplation of an administrative solution, the prospect of the 5thA case (j. Sweeney) and any ongoing constitutional separation powers/appnt clause and APA claims means that some resolution of these claims requires a global settlement...and the reason why you saw a flurry of cases filed before the lapse of the 6 years statute of limitations expired was precisely to make sure that investors had as many seats at the table as possible...the more cranky Ps the more likely a global settlement will have to approach a moelis-type solution. Thank you for adding color.

So one of the options is nationalization, a status quo from today and the shortest and easiest path. All they need to do is cancel our shares and voila. The CBO report states that the advantage of that model, fully federal -carefully avoiding the negative impact of the word nationalization- gets all the benefits to the taxpayers. Sounds familiar? The groundwork has been laid out already, since 2012 (nws). Six full years of the same narrative. As the nws becomes validated, 'fully federal' starts to look better in everybody's eyes. And as long as the word nationalization is avoided, the public at large will ignore the issue. And we cannot rely on politicians. As court cases go and as we are discovering, it appears the government was legally allowed to do what it did without having to compensate anybody. This is a monster, remember? Courts won't even get close to compensation and all we are getting from them is 'tough luck'. So yes, it is the shortest and fastest path from where we are today. But I agree with you, I give the fully federal model little chance. Not because a shocking Mnuchin's about-face but because there is too much money involved and greed will make its way to set the companies free.

In TH's blog someone mentioned the 'Chevron deference' and the 'Skidmore deference' as the basis for one of the opinions in the ruling. I found this bit of information in relation to Skidmore. May be there's hope if we get to SCOTUS?

So one of the options is nationalization, a status quo from today and the shortest and easiest path. All they need to do is cancel our shares and voila.

Good thing my thesis doesn't depend on the courts. With that said, a court win would be a nice bonus to speed up the process. it's highly likely the shareholders lose or receive a small payment from the remaining court cases. mnuchin might wait for the cases to fizzle before acting administratively. this would also allow for another legislative crack in spring and summer 2019. if you're out there, Mr. Mnuchin, please in the mean time stop the sweep after the 10pct moment is hit. And in your view, what would the legislative approach most likely be -new Congress aside- and what would an administrative solution may look like? rros, mnuchin said to congress recently he prefers an explicit guaranty at the security level. this requires congress. also, there's been a lot of work done in the senate committee and pat toomey or sherrod brown (if he wins his race) are the likely future chairman (depending on who wins control) and either would probably want to give it a firm shot imo. plus, the extra time lets some of the other court cases fizzle. finally, a legislative solution is more official and permanent. still, there's a good chance it fails in the end. a true administrative solution is likely something near the moelis plan but that's probably a late 2019 potential event. What I believe is fair is a parallel process whereby he works legislatively but also - once the 10pct moment is hit for both companies - freezes the sweep and institutes the commitment fee in its place to get the capital build going - the companies are massively overpaying for the backstop capital committment at the moment. And, if the warrants are the backup plan to build the wall then he wouldn't want to wait too long to get things started. Amid the bad news, this doesn't sound too bad. Whatever the chances are. Thank you.

Good thing my thesis doesn't depend on the courts. With that said, a court win would be a nice bonus to speed up the process. it's highly likely the shareholders lose or receive a small payment from the remaining court cases. mnuchin might wait for the cases to fizzle before acting administratively. this would also allow for another legislative crack in spring and summer 2019. if you're out there, Mr. Mnuchin, please in the mean time stop the sweep after the 10pct moment is hit. And in your view, what would the legislative approach most likely be -new Congress aside- and what would an administrative solution may look like?

Let me expand. Maybe none of them are on the extreme end. But whatever Obama may be, a socialist, a half-communist, a progressive leader or none of the above, he ok'd confiscating property. That was a choice.

Somehow, I think the power people who concocted the nws never read, considered or understood HERA the way all these judges seem to be interpreting it. Neither Krimminger nor Calabria realized what kind of door they were opening when they helped craft the law. So the Obama guys simply got lucky. Looking back, when trouble was brewing early on in 2008 and Hank Paulson began requesting Congress for broader authority for Treasury, it is inconceivable he may have asked for nationalization powers. Instead, and in light of his most recent interview, his idea must have been taking over whatever needed to be taken over to later liquidate, when calm returned. But then, a communist President took over. Going from liquidation -that may have benefited the Jrs.- to nationalization was an easy decision for Obama who may have understood better than anybody else he could get away with it.

So, Hedge funds/litigants > gone. Congress > gone (gave up). Watt > soon gone. Looks like the road ahead is clear for the WH to do whatever it pleases. Maybe what pleases the WH also pleases the commons? Note that in a recap scenario commons will move ahead of the Jrs. The Jrs. will only move ahead of commons if the Srs. are taken out. I am just impressed at the solid buying and today's gap up. Congrats to the holders.

Where is the strength of the common coming from? Is it related to the statute of limitations referred to by Chris? As in... the lawsuit saga is over? Those in are a lost cause and no possible new ones?

If the reason for our defeats is a shared view by both courts and government that the practice of "litigation finance" must never succeed, everybody will hide behind 4617. Regardless of how right we may be. InvestorG put it in other terms by saying no ruling against the government apparatus. Back in the day, Senators Warner and Corker were very vocal about this practice and called it "an industry". And, as the exception that confirms the rule we may get our Pirric victory here and there laid out to us as a strong dissent. But it is easier for me to believe this because I am not a law person. Legal minds probably hate this thought. I hope I am wrong. Edit: coincidentally, a member started a thread yesterday about Paul Singer, the king of litigation finance.

It appears this court already answered their own question and wants counsel to arrive to the same conclusion. So this, Jacobs, would be a negative chink.

Maybe the court is saying awarding damages is a form of judgment -admitting a violation implicitly- and 4617 prevents the court getting there. So the charade goes on.

http://www.glenbradford.com/wp-content/uploads/2018/08/18-01226-0001.pdf So Perry Capital now seeks compensation and brings up the nationalization issue. On behalf of the funds he represents. Depending on what/how Saxton's court rules this may move forward? And if so, what happens to us that are not represented by Perry as investment manager? What recourse do we have? File a lawsuit? Interesting everybody is turning towards the nationalization theme. P.S. I have the stock certificates from 2010 for all my preferred shares. Is there such a thing as calling counsel and asking to join?

The public comment period set by FHFA has a November 16th deadline. If the first action to take place -as per Moelis- is for Watt to request the companies to work on a recapitalization program, your hope of a 3 to 5 months resolution falls squarely within this time frame as Watt may not announce anything immediately after the deadline.

"One GSE watcher..." Hah! Might as well be me, but it wasn't. Still funny how the narrative at IMF (i.e. David Stevens) has dramatically changed in recent months. Brooks as CEO? Yes, please. Even if it doesn't happen the fact that IMF (Stevens) is testing the waters with this kind of stuff seems like a positive. https://www.insidemortgagefinance.com/imfnews/1_1422/daily/-1000047236-1.html One GSE watcher told us that Brian Brooks, who currently serves as Fannie Mae’s EVP, general counsel and corporate secretary, would make a good successor to departing company CEO Timothy Mayopoulos. However, this observer added: “He’s not going to take a pay cut.” Congress capped GSE CEO pay at roughly $600,000 per year. Before joining Fannie in November 2014, Brooks was vice chairman of OneWest Bank, a bank Treasury Secretary Steve Mnuchin once owned a stake in. Things are beginning to take shape.

The point I tried to make is unrelated to any common shares plight, I am sorry. I owned a small amount a long time ago and sold them all back then. I have no opinion on the commons.

Since the prevailing view is of constructively putting things behind, I will not bring this up again.

Basically this. The original SPSPA dividends were based on the senior pref liquidation preference, and the NWS dividends seem to be tied to their existence. Cancelling the seniors, deeming them repaid, or converting them to common (this last one is fraught because it might force the government to consolidate FnF's balance sheets onto their own, a nonstarter in my opinion due to it technically skyrocketing the national debt by $5.3T overnight) will mean no more NWS dividends, so the lawsuits should become moot. I agree with allnatural, that the Moelis plan is more than what the litigants are asking for, so I believe they would drop their lawsuits in exchange for Moelis, though they would likely want something binding in writing from FHFA and Treasury. Dropping lawsuits before that, especially after next week when the statute of limiations expires for the NWS, is not a good idea. I partially agree with both of you. But I now feel specific lawsuits may continue based on what the nws really means, as shown by Cooper's new line of attack. Lawsuit(s) seeking some sort of redemption of shareholders who were decimated by the only nationalization to have ever taken place in the US. I know many will simply feel happy by a windfall of any size, if it comes to that. Only a bitter-sweet victory for me. I simply can't believe tens of millions spent over 6 years in meaningful lawsuits will go by the wayside because suddenly the government unwinds the reason behind them. I prefer to believe Cooper is smarter than all of us and there is more to it in his latest filing.

As per Moelis, a pre-requisite to any recapitalization requires the elimination of the Srs. But the greater question remains. Cooper understands that achieving our monetary goal -amazing for us- may do little to prevent another nws. Something else beyond our monetary gain must happen.

I just had a daydream about how this could have gone down in oral arguments, complete with expansive hand and arm gestures, incredulous voicing at the proper spots, the whole works. Thompson: The defendants have argued, successfully in other courts, that the word "may" in section 1367(b)(2)(D) is merely permissive in nature and not exclusionary. But this very court found the opposite to be true in McAllister vs RTC. In that case, this court said that a conservator, quote, 'only', let me repeat only, 'has the power to take actions necessary to restore a financially troubled institution to solvency. Expenses of liquidation cannot be incurred by a conservator as a matter of law, as', and I emphasize here, 'liquidation is not a function of the conservator.' Allow me to read the relevant section in HERA. 'The Agency may, as conservator, take such action as may be-- ‘(i) necessary to put the regulated entity in a sound and solvent condition; and' (I emphasize and) ' ‘(ii) appropriate to carry on the business of the regulated entity and preserve and conserve the assets and property of the regulated entity.' Given these things, that FHFA's powers as conservator only, as stated by this court, allow it to take actions to restore the companies to solvency, and that HERA requires FHFA to take both parts of section 1367(b)(2)(D) into account, how can the Net Worth Sweep be anything other than ultra vires? The Net Worth Sweep does the opposite of (i) because it endangers, rather than promotes, the financial soundness of the companies, and it also does the opposite of (ii) because it, rather than preserving and conserving the assets of the companies, instead gives them away to Treasury in perpetuity. As a clearly ultra vires act, the Net Worth Sweep is thus reviewable by this court and the bar of judicial review found in section 4617(f) does not apply. Thank you, your honors. Alas, the opportunity has likely passed by. The 5th Circuit McAllister vs RTC opinion references RTC vs United Trust Corp. in the 11th Circuit. That opinion, found here: https://caselaw.findlaw.com/us-11th-circuit/1225205.html, says: They used the 8th Circuit's CedarMinn case as part of an opinion. Does that bind the 11th Circuit? Has a NWS case been brought before the 11th Circuit yet? So.. I am curious, Midas. What would you do if the government front-run us within the next 4 months and unwinds the nws as part of a Moelis plan (Watt ordering the companies to come up with a recap plan will be the green light)? Will this and lawsuits seeking similar remedies just deflate? Perhaps there is a reason why Cooper is becoming more aggressive pursuing a nationalization/meaningful compensation strategy, as per his last filing.