Luke 532

cherzeca and hardincap, thanks for the input. I agree with much of what both of you said. The reason I own prefs (3 different kinds) and no common is the possibility of dilution. I don't think common will be diluted meaningfully, but it certainly wouldn't surprise me. I'm finding it more and more difficult to kill the thesis that prefs return to par, or very near it, in the foreseeable future. I'm not as confident that some level of dilution, perhaps heavy dilution, might occur to the commons. With that said, if prefs weren't 6-baggers (FNMAS) to 10-baggers (FMCCL) from today's prices then I might be interested in taking more risk for the common and its potential upside, but that kind of multi-bagger on the prefs is plenty for me given the decreased level of risk. I think we all end up big winners in the end.

My favorite part: In her deposition, Ms. McFarland said that she believed her conversation with the Treasury propelled the government to change the terms of the bailout to seize Fannie’s and Freddie’s profits. "When the amendment went into place," Ms. McFarland testified, "part of my reaction was they did that in response to my communication of our forecasts and the implication of those forecasts, that it was probably a desire not to allow capital to build up within the enterprises and not to allow the enterprises to recapitalize themselves."

Pulitzer Prize winner Morgenson with another article... http://www.nytimes.com/2016/04/13/business/fannie-mae-suit-bailout.html?smid=tw-share

Good enough for me. Making progress slowly but surely.

Below is from Peter Chapman today... interesting that some documents will be unsealed. Judge Sweeney entered two Orders this afternoon: -- Doc. 310, denying Prof. Yoo's motion to file an amicus brief; and -- Doc. 311, granting in part and denying in part the Shareholders' request to unseal the handful of documents lodged with the D.C. Circuit. Both orders are under seal and are not available to the public at this time. How this affects oral argument before the D.C. Circuit Friday morning is unknowable at this time.

Huh? Fast and furious documents? http://www.cnn.com/2016/04/08/politics/obama-administration-turns-over-fast-and-furious-documents/index.html

Feds forced to hand over "Fast and Furious" documents. Here's hoping for the same with GSE's.

I'll be there. If it doesn't get disrupted by protestors, I'll report back how the oral arguments go. Looking forward to it. Thank you, merkhet.

http://www.politico.com/tipsheets/morning-money IS WALL STREET SLEEPING ON GSE REFORM? — Via Political Alpha: “While the 10/19/15 coordinated policy response by the White House and Treasury to our 10/5/15 note, ‘White House Looking into Ending GSE Conservatorship,’ had supposedly put the issue over rebuilding capital at the GSEs to bed, contacts tell us that the debate is still very much alive and ongoing inside the Obama Administration. “Moreover, the discussions have moved to Federal Housing Finance Authority (FHFA), which has the authority to act unilaterally and is now actively reviewing its options and likely to act much sooner than Wall Street is expecting to begin the next major housing reform initiative: rebuilding capital at the GSEs.” Read more: http://www.politico.com/tipsheets/morning-money#ixzz44icAx1Cf Follow us: @politico on Twitter | Politico on Facebook

Go here for comments: http://howardonmortgagefinance.com/2016/03/31/fixing-what-works/ Interesting... DavidHStevens March 31, 2016 at 7:56 am Thanks. Definitely support this series on GSE options that Urban is doing. Helps flush out the range of the perspectives and options. Looking forward to reading all of them. David H. Stevens President and CEO Mortgage Bankers Association 1919 M Street, NW, 5thFloor | Washington, DC 20036 TEL: (202) 557-2701 |mba.org

The next date to consider is April 15, 2016 for the oral arguments in the Perry Appeal. What is your best guess as to how long the MDL Panel will take to rule?

That is to be expected in this investment or any other heavily litigated situation. The real question is whether or not you let the fact that you are weary impact your decision making.

Probably going to be disappointed but....http://reactiongifs.us/wp-content/uploads/2013/02/popcorn_stephen_colbert.gif I'm not saying Watt/Scott amounts to anything, but at the very least he's entertaining the opinions of lawyers that are pro-shareholder. I'm pointing it out because it builds upon, however slightly, his public and scripted comments awhile back where he was very clear the conservatorship needs to end.

Why in the world does Mel Watt want to talk about the conservatorship with a Harvard Law professor? The same Harvard Law attended by Ally Coll Steele, the author of a shareholder friendly GSE piece in the recent past. There's no reason for Watt to not blindly trust the endless stream of government lawyers, which I'm sure are being 100% honest with him, right? Ally Coll Steele @allycollsteele Interesting! Mel Watt coming to @Harvard_Law to talk with Prof. Hal Scott about the conservatorship of #FannieMae and #FreddieMac on Apr. 4

Courts taking government enterprises to task, good to see... Court rebukes IRS for tea party targeting, orders release of secret list http://www.washingtontimes.com/news/2016/mar/22/irs-rebuked-tea-party-targeting-ordered-release-se/ Here's one interesting quote from the article: “The lawyers in the Department of Justice have a long and storied tradition of defending the nation’s interests and enforcing its laws — all of them, not just selective ones — in a manner worthy of the Department’s name. The conduct of the IRS’s attorneys in the district court falls outside that tradition,” Judge Raymond Kethledge wrote in a unanimous opinion for a three-judge panel of the Sixth Circuit Court of Appeals. “We expect that the IRS will do better going forward.”

Reform article from Parrot, Zandi, Ranieri, Sperling and Zigas: https://www.economy.com/mark-zandi/documents/2016-03-22-A-More-Promising-Road-To-GSE-Reform.pdf

Forbes opinion article... Government Privacy Protection Needs To Stop At Financial Market Door http://www.forbes.com/sites/jeffreydorfman/2016/03/23/government-privacy-protection-needs-to-stop-at-financial-market-door/#e86e475d8ad0

Jon Prior tweet from about an hour ago... "White House housing adviser Michael Stegman, long-time point man on Fannie, Freddie reform, to leave Friday" http://politico.pro/1PqOYKf

This consolidation attempt strikes me as a desperate move to delay the Delaware case. In light of the recent legal ruling that Fannie and Freddie are indeed private companies, it seems the government knows that it is a long shot that they'll win the Delaware case. I'm biased, but it really seems that's the case here with this delay attempt.

Does the simple act of filing this attempt to consolidate cases put on hold the decisions of motion to dismiss & application for certification in Delaware?

Which likely makes the NWS cases that much easier to win... which is all I care about as a pref holder.

Pagliara Files Suit in Delaware http://www.valueplays.net/2016/03/14/pagliara-files-suit-in-delaware/

If the government loses on any motion to dismiss, something on the settlement front could be wrapped up rather quickly.

Bingo.

It is an extremely difficult argument to make that the 2012 NWS was legal, given that one has read the filings from all the court cases. I only own prefs (no common) for the simple fact that the possibility exists that common gets heavily diluted. Win in court and not win on share price... not a risk I'm willing to take when prefs are trading at 9%-13% of par.