Luke 532

To expedite the process of finding out whether or not the NWS is illegal in Virginia and/or Delaware, Steele is asking Sleet to pose the question to those states' courts. Document attached. Steele_1-15-2016_NWS_in_DE-VA.pdf

Steele's Brief in opposition to Motion to Dismiss attached... Steele_1-15-2016_1_of_5.pdf Steele_1-15-2016_2_of_5.pdf Steele_1-15-2016_3_of_5.pdf Steele_1-15-2016_4_of_5.pdf Steele_1-15-2016_5_of_5.pdf

+1 I added to FNMAS earlier today.

“I can’t remember being more excited about representing a case.”

Yet another plaintiff wanting to amend their complaint (attached) based on what they've found (or what has been shared with them) in discovery. The more time that passes the more information found via discovery and that information is being shared with numerous plaintiffs in other courts. The passage of time is frustrating and requires great patience, but the trade-off is one could reason that each court case with access to discovery materials is likely getting stronger for the plaintiffs. I like that a lot. FNMAS_Saxton_Amended_Complaint_12-31-2015.pdf

If the former Chief Justice of the Supreme Court of Delaware knows Delaware corporate law fairly well, then yes this mosquito bite might just result in a deadly case of West Nile virus for the government's defense.

What do you all make of the new bonds that both Light and Carney commented on today? Joe Light... Fannie and Freddie Give Birth to New Mortgage Bond http://www.wsj.com/articles/fannie-and-freddie-give-birth-to-new-mortgage-bond-1451385003 John Carney... Fannie and Freddie: New Bonds With an Old Twist http://www.wsj.com/articles/fannie-and-freddie-new-bonds-with-an-old-twist-1451422238

The preferred shares of Fannie and Freddie are a very interesting situation heading into 2016. There are imminent catalysts within the next few months (court-related items). The pricing on the preferred shares offer a favorable risk/reward when comparing current price vs. par value: FNMAS 8:1 FMCCL 12:1 FNMAH 10:1 etc. There's an element of speculation with the GSE's, but for those that don't mind that you can read up on the situation here: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/fnma-and-fmcc-preferreds-in-search-of-the-elusive-10-bagger/

There is a TON going on within the next 60 days. Nearly 8:1 odds on FNMAS, even better on some other prefs (12:1 on FMCCL, 10:1 on FNMAH, etc.). Needless to say, I like the situation a lot.

Twa, do you happen to have a link to those statements? Would be greatly appreciated. Many thanks.

Perhaps there have been some other leaks of a possible settlement. First... Attorney Cooper in August says the next step is to collect the information and prepare documents for filing in the U.S. Court of Appeals. There is no timeline on that, but Cooper hopes the government will mediate. "We reached our hand out to the government," Cooper says. "We would like to do that, [but] so far to no avail. I still hold out some hope the government may agree to resolve this dispute amicably." Didn't I read somewhere a few months ago that Sweeney encouraged the two sides to mediate? Perhaps that's standard. I'm not sure where I may have read this but I thought I did in some filing. Second... The Political Alpha piece from October. See PDF embedded within this article: http://nypost.com/2015/10/08/a-white-house-flip-flop-on-fannie-and-freddie-investors-think-so/ Third... The government has been active the past 2 months in hiring consultants. They could be for any reason but their bios include damages, valuation, etc. Seems interesting given Brown's recent comments. Thoughts?

It's probably nothing, just a misstatement.

Hmmm...

A major pillar of my entire thesis rests on the 2012 NWS being deemed illegal. Delaware alone should take care of the NWS. Without knowing your reasoning, it seems a bit odd to me to believe a loss in Delaware would amount to nothing more than a mosquito bite to the government. I'm curious of your reasons to believe that Delaware, Perry Appeal, Saxton, Robinson, etc. all amount to nothing more than minor annoyances to the government's case? Thanks in advance for your input.

Interesting after-hours trades today: FNMA: 19.55M shares FMCC: 17.12M shares

:)

I understand your skepticism, but I believe the risk/reward of a substantial recovery is still heavily skewed towards preferred shareholders. Take the upcoming court decisions, for example... I dare to say that jurisdiction being granted is a very, very high likelihood in both Sweeney's court and Sleet's court. In Sleet's case, I can't imagine the former Chief Justice of the Delaware Supreme Court (Steele) so grossly miscalculating a case in his own state to not warrant jurisdiction. In Sweeney's case, she has said as much: "But I want the Plaintiffs to have — I mean, their day in court..." I'm curious where the prefs would logically trade assuming jurisdiction is granted in both cases. Certainly much higher than $3.40-ish on FNMAS, no? Further, it seems like a high probability that Steele will win the Delaware case. I wonder what a logical price for the prefs would be in the event we win jurisdiction in both cases and win a "NWS is illegal" verdict in Delaware.

Regarding the Jumpstart GSE Act, couldn't another law work around that just as quickly if the Administration realizes things aren't going their way in court (for example, jurisdiction granted by both Sweeney and Sleet) and they decide to settle?

Merkhet, thanks for posting all those court dates. I'm also looking forward to Steele's written reply to each government argument (due January 16th) in the Delaware case. Quotes from Steele on his conference call regarding his upcoming response: “Let me ease any concerns… nothing in any of the briefs by the government could be considered a surprise or unexpected. The arguments were very predictable. Nothing we’ll have a hard time responding to.” “The government set up a standard they must comply with and then they violate their own standard. You’ll see this clearly in our response briefs.” “We will dispute each and every claim the government made, there are no concessions to be made.”

Sweeney granting Plaintiffs in Robinson (Kentucky) case access to Protected Information: http://gselinks.com/Court_Filings/Fairholme/13-465-0279.pdf

What was the meaningful carrot in the Third Amendment?

Timothy Mayopoulos (Fannie CEO) on CNBC late this afternoon: http://video.cnbc.com/gallery/?video=3000467303

Investor Unite's commentary on Corker's bill: http://investorsunite.org/investors-unite-jumpstart-does-not-prevent-settlement-with-shareholders/

Todd Sullivan commentary on Corker's bill: http://www.valueplays.net/2015/12/16/corker-slips-jump-start-act-in-omnibus-bill-its-irrelevant/

Pretty shocking given the amount of progress that has taken place in the courts and in the media since Lamberth's ruling. Then again, that's Wall Street's nature and discrepancies in value vs. price is why we get paid so much as value investors. And anytime the daily volume is less than $1,000,000 at mid-day, well, it makes me even less concerned about price action (and that's saying something since I don't care about price action in the first place).