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Thanks for that. Gave it a listen. Sounded like the plaintiffs had good arguments then as always the defendants speak and I feel like almost immediately the judges side with defendants. The way this is going it seems like the answer always is "yes plaintiffs we here what you're saying but it doesn't matter cos the fhfa can do whatever it wants cos of the statute" regardless of the implications. One of the judges used the word "confusion" regarding the nws. That's not only new but hopeful.

Thank you for the link. Some questions were excellent, yes. But will they have the balls?

In my view, nothing seems as it appears. And the only real Mnuchin is the one that, at the last Senate hearing, told Corker he must word things carefully not to roil the markets. This was his answer when asked about Treasury's options should Congress reform fails. In that line, Mnuchin's words are carefully chosen so that the last thing that happens is a rush in/rush out of FF stocks. We are then left speculating. Succinctly, none of us here can say with any degree of certainty whether this is a 2018, 2019 or a never issue. What may happen instead, could happen in the dark of the night and without Mnuchin showing his hand in advance. Which is not the same as saying things may happen in the darkest hour. Have some faith and keep your shares. edit: i think he said "roil" not reel. Sorry.

some chance that's perry selling after his court case ended. the rest of their hedge fund had been rolled up a while back. perry, ackman, berk, etc - they have businesses to run and investors to report to and communicate with. mnuchin's lack of leadership / taking the easy road on the matter since the jan-1 ending of jumpstart has likely rightfully discouraged many long term holders and reduced conviction. perhaps many of us misjudged his intentions. on the other hand, if he's interested in a fair outcome for all parties, it would have been fairly easy for him to telegraph that in the past 2 months but he's chosen a different path - likely with a long term view but penalizing to investors without endless time frames. Call me a cynic but in the realm of speculation I have always believed Perry sold most, if not a very large chunk, after the colossal run towards 50 cents on the dollar by March 10th, 2014. THAT SAME DAY after the close Bloomberg published an article about the genius of Todd T. Westhus, the Perry guy who oversaw the trade early on when Jrs. were trading at cents on the dollar and on 3/11 all Jrs. gapped down at open, sold off and never saw the peak again, ever. The article compared Westhus to Soros and John Paulson regarding the success of the bet and the magnitude of the windfall. Perry Capital may have kept some shares tied to the ongoing lawsuits -had they sold prior to the publication of the article- and the rest, to this day, is just theater. A cynic view, of course.

Just to be clear, are you using the same context as Watt did when you mention "exigent circumstances?" Watt's quote about the letter agreements was So you think that an economic downturn, or some other large-scale event, will get Treasury to allow FnF to keep their profits rather than paying to Treasury? Or be prompted to finally deal with the conservatorships rather than kicking the can further down the road? Basically, yes. Thank you for finding the written text. I am adding my own interpretation of what Watt may be saying in regards to EC. Watt statement points to a possible scenario where in spite of companies delivering earnings FHFA may not declare/pay dividends. This automatically discounts losses. In such times there would be a draw instead. For him, a broader set of issues may impede the transfer of earnings. What is in that umbrella we do not know. Market turmoil that may affect the real estate market is my interpretation of what can one of those issues be. Not sure if EC would include Treasury allowing for a full recap. It would depend on what type of circumstances develop. Edit: but I should also consider that these may just be standard phrases commonly used in regards to dividend payments. Therefore, meaning nothing.

Those trades are disconcerting. But given they are concentrated in only one issue, fnmat, it is possible someone wanted the cash. Specially, considering what is happening today. Raising a ton is not a bad idea if there is a market swoon coming. Getting closer to /exigent circumstances/ by the day.

Thanks. Bodes well for the utility model. I have found the interview. Thank you, Luke. http://wunc.org/post/treasury-secretary-mnuchin-says-he-feels-obligated-help-middle-class#stream/0

I do not think this will fly unless it can be proven Treasury twisted FHFA's arm. FHFA agreed to the terms and that would put an end to this argument. They did not have to, but they did. DeMarco, later on, showed independence from Treasury when FHFA refused to lower guarantee fees (he actually raised them) in disagreement with Geithner. This action alone will not help to convince a judge that Treasury forced FHFA. What other lawsuits tried, circumventing this argument, is to say that FHFA Director acted against his mandate by agreeing to terms that were not in line with "preserve and conserve". No lawsuit has been able to get to that beacon. All have been "lamberthed" right before that point. Cleverly. So although anyone can see our argument might be valid, it has been made "unreachable". Many of us bought like owl creek, after c-ship and way, way before the nws. And although there was no indication whatsoever that something like the nws was in the cards -something never heard of before-, it happened. And courts have understood anything goes when it comes to regulated entities. In my view, good or even the best arguments will not fly. Only thing that may help is finding judges that are willing to rule against the most powerful agency in the planet, the Treasury of the United States. After 6 years of a very hard learning process, I am not sure this will ever happen.

Do you really think that the government will let Fannie/Freddie go when the housing market indeed turns south? FWIW, I don’t think it will and I am about to find out first hand because I will need to sell a home and buy another one due to relocation. The fast rise in interest rates certainly will give some first time home buyers reasons to hesitate and some might be priced out the market. Nobody can predict what may happen if there is marked downturn. Personally, I suspect it will force some hands. Can't say in which direction. Real Estate: in Miami Beach prices are going south quickly and selling isn't a smooth ride. Where I live there is an abundance of inventory. More than I have ever seen. On the macro view, China manufacturing data has slumped in another indication of a noticeable slowdown. That, among tremendous optimism among analysts about global strength. Narrow money indicates it will get worse and last for all 2018. As said, let's wait for March/April. A personal view. The peaks on 2000 and 2007 and the following crashes have left deep wounds and are still fresh in investors' memories. I would think almost everyone involved will have their fingers on the trigger and avoid the charm, the third time. Update: pending home sales disappoint, today. New home sales dissapoint, yesterday.

* Sales of new U.S. single-family homes fell for a second straight month in January, weighed down by steep declines in the Northeast and South, which could raise concerns the housing market is losing momentum. * Orders for business equipment at U.S. factories unexpectedly fell for a second month. Non-military capital goods orders excluding aircraft declined 0.2% (est. up 0.5%) after falling 0.6% the prior month. Not as robust an economy as JP is painting it. Making matters worse, labor shortage and wage increase happening. Softening news is right on schedule. Capex/investment cycle may have peaked. No tailwind there. Raising interest rates could be suicidal. Will see what happens in March/April. I still feel we will be seeing "exigent circumstances" in a not so distant future.

The nws has not been upheld in any court, as far as my limited legal understanding goes. Instead, courts have upheld Lamberth who said there is no possible judicial review of what has been done stopping right before looking into the nws. So not the same. Lamberth ruled "go talk to congress". In a way, the Supreme Court has done the same. And in an strange way, so has Mnuchin. Although he appears to be changing if Paolo -who has never been right- is right.

Nobody wants to fix 'congress mess' so they all wash their hands while proclaiming 'I am innocent of this NWS blood'. Specially, when fixing it may lead to a windfall to shareholders. Who wants that?

Good summary of where we stand. http://www.washingtonexaminer.com/rising-drumbeat-for-trump-to-deal-with-fannie-and-freddie-himself/article/2649809

My view is that markets might influence decisions one way or another. Most do not feel this way and look at market movements as unrelated. But a big market move might have that power. Not just on the WH but also members of Congress. Specially, if real estate is affected and the potential of losses by FF becomes greater. There is a reason why Watt/Mnuchin used the words "exigent circumstances" in the letter of agreement. In this regard, I believe a whopping move is right ahead. Measures of narrow money peaked mid '17 in Euroland. Softening PMI news came yesterday by markit. Right on schedule. Same for China. By March greater weakness in global economies will be noticeable and by the summer we could see gdp contraction around the world, given a 9 month lag for money measures. The consensus view is of a strong and getting stronger economy both in the US and around the world making securities markets very vulnerable. Poised for a shock. What "exigent circumstances" might lead to, I do not know. But given Watt's stance, one possibility might be administrative action. And I am trying hard not to be biased.

On another note... I kind of like that Pimco gets involved. https://www.pimco.com/en-us/insights/viewpoints/viewpoints/us-housing-finance-reform-why-fix-what-isnt-broken/ I spoke too soon. Are they calling for full nationalization?

Apologies if this has been mentioned before, but if the court eventually does award damages would they only go to the plaintiffs, all shareholders who own the same class and series of shares as the plaintiffs, all junior preferred holders, or some other combination? Is that up to the judge or is it specifically requested in the complaint? I have to double check but I think at least Perry expressly covered all preferred holders. Will get back on this. This is in the ruling by the appeals court. Does this answer your question? I believe the appeals court later changed a bit their stance regarding subdividing classes.

So this means... implicitly, it is all up to Congress. And given the state of affairs this means, in turn, it is all up to Mnuchin/Watt. Perhaps, not a terrible outcome. As doors finally begin to shut down the few that remain open become more and more visible. The next door to shut down should be Congress.

What would change look like? We have had terrible luck since 8/17/2012, except for one tiny bone from the court of appeals. The rest, all adverse events. It's time for change. Meaning, we move on. Will this change come as a final negative outcome -last nail in the coffin- or will it take the form of doors getting wide open?

So where is Watt's dereliction of duty? All of them are total clowns. All.

Anybody thinks that today's price weakness is related to the news that Corker may be running for re-election?

Treasury has treated us, is treating us and will treat us as nobodies. Forever. No matter who is at the helm. Maybe it's the lawsuits. Or the lawsuits may have taken the hatred to new heights.

I lit a cigar and filled up a glass of scotch figuring I would need a few hours to read the "discussion". It took only one puff.

Agree. Not just price. If "only price" were true you could sit on an investment for years w/o showing Buffett's 20+% returns. Have seen this first-hand waiting on cigar puffs to yield large gains. Prior to, there were many years of zero yield crops. Shouldn't a value investor try to assess which catalyst will catapult price? And once established, shouldn't the "when" question follow? Cigar butts often aren't growing intrinsic value. Thus the discount is deceptive. Looking for a catalyst in a stock, or becoming it in Sandborn Maps, is not market timing. Market timing is basing your decision to buy based on overall market valuation and/or direction. Thank you for that clarification.

Agree. Not just price. If "only price" were true you could sit on an investment for years w/o showing Buffett's 20+% returns. Have seen this first-hand waiting on cigar puffs to yield large gains. Prior to, there were many years of zero yield crops. Shouldn't a value investor try to assess which catalyst will catapult price? And once established, shouldn't the "when" question follow?

This is my opinion only. I think he market-timed all throughout his LLC. The evidence is when he states that some of his investments would perform better in market downturns. As they did. This suggests market conditions influenced his purchases to some degree. Or at least, had some consideration on his decision-making. That, as opposed to what he has been broadcasting the last couple of decades that it doesn't matter when you purchase as long as you have concluded there is value to be had.