Luke 532

I should mention that I'm in the preferred until they reach (or get near) par. I'm not interested in the 8.25% rate unless it is reinstated and FNMAS continues to trade significantly below par. I will reevaluate the situation when FNMAS reaches par and may very well consider a position in the common at that time. But for the here and now, I'm in FNMAS. In other words, long-term isn't really what I'm focused on here at this time (if long-term is 10+ years from now). I'm focused on getting the NWS and conservatorship mess fixed, profit from it, and then take a fresh look at the prospects of Fannie.

Here are 2. There are more but I don't have the desire to go through the thread to find them right now. This post from Merkhet... Another from Vish_ram...

Luke. I know it maybe buried in this 192 page thread but do you see the same for the common shares? Seems like the potential pay off is much higher there. When compared to the prefs, I don't like the common. Sure, the potential payoff is higher but I don't think the added risk justifies the possible increase in upside. There is some useful information in this thread discussing various scenarios in which FNMA gets hurt while FNMAS does well. I'll try to find it...

I understand. I just don't want people to dismiss the developments over the past few months as merely hype. There has been some very substantial progress and I hope people don't miss it.

Yeah.....the tide is starting to shift....things are definitely more positive.......dont tell luke but im starting to board the hype train. I wouldn't call it "hype." It's more like paying close attention to (1) what is happening, and (2) what important players are saying, and as a result adjusting expectations when/if the situation warrants it. I believe the odds of FNMAS holders returning to par has been increasing for months and the payoff is roughly risk $1 to profit $4. Some call it hype, I call it an improving risk/reward.

What I love about Carney is how honest and unbiased he is in his articles. Always reporting both sides of the story. Quality journalism in its purest form.

Delaware schedule granted by Sleet: http://gselinks.com/Court_Filings/Jacobs_Hindes/15-00708-0014.pdf Plaintiffs Response Defendants Response to plaintiffs response It even stipulates the number of pages the breifs should be.........I guess i was wrong in saying this case wouldn't be started until next spring.

MIT Sloan professor opinion piece in The Washington Post https://www.washingtonpost.com/opinions/mortage-mavens/2015/09/30/b446e476-55ae-11e5-8bb1-b488d231bba2_story.html

New filing in Delaware case. Fully briefed by February 16, 2016. http://gselinks.com/Court_Filings/Jacobs_Hindes/15-00708-0010.pdf

No worries. Thanks for clarifying.

Hype train? What did I post that lead you to that illogical conclusion? I simply posted that Obama is meeting Lew. If you don't think there has been significant progress made in the past 3 months you simply haven't been paying close enough attention.

Obama's schedule for today includes... 2:00 PM, The President meets with Secretary of the Treasury Lew; the Vice President also attends, Oval Office Closed Press https://www.whitehouse.gov/blog

Another motion granted for the plaintiffs by Sweeney without waiting for a government response. All future dirt recovered by plaintiffs will be provided to other courts without needing Sweeney's rubber stamp on each document.

I guess we view the situation differently. I would say there has been more positive news in the past three months than in any 3-month period in the past few years.

You're right that the market is correct to apply a discount, but if you're arguing that the severity of discount is correct I would have to disagree. The market prices roughly a 19% chance of FNMAS returning to par. I'd argue that is way too low. I'd put the odds at well above 50%. If it were 57% that would be a 3-for-1 that the market is offering in terms of mis-pricing.

I get where you are coming from. I do think the odds have "gotten better" in maybe a normal circumstance. However this is not a normal circumstance. I think F&F are a "special" special situation case and make or break of it does rest on the courts. This has been teh case from the beginning. You may be underestimating the probability of this saga being resolved outside of the courts. I think that is the more likely outcome... and I believe it's becoming more probable as each day passes.

Is it just me or do the odds of winning in court or being released seem to increase by the day? All the while the price of FNMAS remains below $5.00. Result being the risk/reward is improving. Am I wrong?

McLean on CNBC earlier today... http://video.cnbc.com/gallery/?video=3000420067&play=1 Charlie Rose: http://www.bloomberg.com/news/videos/2015-09-17/-shaky-ground-charlie-rose Nasdaq.com's The Street: http://www.nasdaq.com/video/fates-of-fannie-and-freddie-need-to-be-settled-asap-says-bethany-mclean-519085001

McLean on CNBC earlier today... http://video.cnbc.com/gallery/?video=3000420067&play=1

This is fantastic... Columbia Global Reports and 'Shaky Ground' Launch Event

At this point, the risk/reward the market is assigning to FNMAS doesn't seem to make much sense. I like that.

If a settlement conversation is taking place, perhaps the following agreement was made: -Administration gets more time to review the documents -Plaintiffs get to dig deeper and uncover more dirt (to strengthen their chances of winning the case in the event the government backs out of settlement talks or a deal can't be reached)

Fairholme's the ones that wanted the extension. I know that. I just can't figure out why. And Luke, you can't assume that on the motions to unseal. If it's premature, she doesn't even have to consider the legal arguments, so it wouldn't be incongruous to say later that the legal reasoning doesn't fly. Even if I think that's unlikely. Thanks for the explanation, merkhet. Always appreciate your input.

Would it be better to give Obama a few more months to do the right thing (release), or would it bet better to have documents released to the public today (taking away any incentive to release/settle) and have it be entirely in the hands of the courts? I'm not sure of the answer to that.

Further, she did not say it was denied for any legal reason. Wouldn't she outright deny the motion if it were based on some legal reason? I think it speaks volumes that she simply delayed her decision claiming it was premature at this point in discovery. How weird would it be if in the future Sweeney said "motion DENIED due to it being an unlawful request by NYT" (or something along those liens) after today saying it's simply premature? Merkhet/others, am I wrong in this line of thinking?