orthopa

I agree 100%. At this point we are left to searching for clues no matter how small when the answer as to what will/should happen is obvious. I think anyone in this investment is trying to not count the chickens before they have hatched, but we have all counted over and over....

You bought your shares in 2008?

I know the IMF rag should be taken with a grain of salt but seems the MBA people maybe getting nervous based on the latest edition. The Federal Housing Finance Agency and Treasury Department have stepped up talks on how they can find an “administrative” solution to the conservatorships of Fannie Mae and Freddie Mac, industry sources told Inside Mortgage Finance late this week. As for what direction these talks are headed in, that’s a different matter… One lobbyist said the industry is concerned that Treasury might do something to reduce secondary market liquidity, but also fears that if the GSEs are eventually “let go” they might once again turn into the industry’s “Pac-men,” a reference to their pre-conservatorship days when they were known to throw their weight around by encroaching on the business turf of both lenders and third-party service providers, while using politicians for protection… Meanwhile, someone suggested the White House might consider Treasury counselor Craig Phillips to succeed Mel Watt as FHFA director. Watt’s term ends next January…

This turned from a legal case to an administrative case the day Mnuchin was picked for Secretary. This may have prodded action a little sooner but otherwise was meaningless.

this really is waiting for godot.....

B), He has a master plan. while i think B is correct, the most cogent reason for me is because notwithstanding mnuchin's oft-referenced preference that he wants to work with congress (A), i have seen no evidence to date that mnuchin has worked with congress. has anyone heard corker or anyone else on senate banking committee say that anything in draft #29 incorporates anything from mnuchin? if he really wanted to "work with" congress, rather than "wait out" congress, wouldnt you think there would have been evidence of that? Excellent point. More like let congress fall on its face. I the most recent hearing in the Mnuchin Corker exchange Corker explains how difficult of a problem this is and Mnuchin mentions working with congress, and you hear Corker with a quick and flippant "yeah". Probably because he has helped very little as assumed here. In the same breath Congress probably hasn't asked for Mnuchins help as 1) its shows they are inept, 2) likely would be a bill/process they would highly disagree with. The devils advocate would say there is no guarantee Mnuchin is friendly to shareholders but I believe his lip service to this point in regards to working with congress is knowing full well congress has no interest in where his help would guide them.

B), He has a master plan.

+1 I would argue the most likely outcome is the one we least expect which would be mnuchin acting sooner then later. Why wait till the balance of power could shift away from him? He is working with Congress as he said he would and letting them put out a bill in anyway they want, if they cant get their act together as noted above then he is on the record saying he will. Clearly based on the last hearing the admin options have been hashed out too. FWIW Paulson (in his latest letter to shareholders) is still of the belief this gets done sooner then later. In light of the connection to mnuchin he has this could be very relevant or just bias on his part. Depends if you believe the relationship is relevant or not but shouldnt be ignored with where we are now with things.

SCOTUS is a waste of time to worry about or hope for. The notion that a court is somehow going to right a wrong and shower people with money is a foolish notion and complete waste of time. Move along from that and contemplate Mnuchins admin options since it appears congress has little to offer. Money made investment is going to be made from realization of a % of par +/- dividends for the preferred and future earnings for the common based after dilution and the success or not from the new business model.

Phillips' comments put him closer to mba plan than moelis, according to tim howard. philips said if c+w fails he will give it another chance after aug, and gave zero indication that he would consider administrative action. still want to go all in? Not all in but did add more. I think we have hashed out over almost 950 pages either you go with your gut and push your chips in or pull em out. Mine are still in with Berkowitz, Paulson, Ackman and Perry

Would have to ask the legal guys but wouldnt it be documented somewhere if he or pershing square was party to a lawsuit? I certainly was fooled by Corkers comments during the hearing to then read a draft of his bill a couple of hours late. My probably biased interpretation of watching it over is that Corker knows legislation has little chance of going though by asking Mnuchin what adminstrative options the treasury has and bouncing recievership off of him. Its back to in Mnuchin we trust. We are either going to live or die by him. I know its healthy to have a leery approach and trust no one but I have not seen to date any action or comment by Mnuchin that would lead me to believe shareholders cant trust him. That remains to be seen of course.

So what side of his mouth is Corker talking out of? He says he sees a fair solution but puts out a receivership bill? Then full out asks Mnuchin if he would put the companies in recievership just to see if the shit he is throwing sticks. It seems as if he is just throwing out some crazy shit knowing full well it wont fly so he can go back to those he represents and says sorry I did my best. Not my problem. He questioning of mnuchin regarding administrative action tells me he himself sees it coming and knows the bill is too extreme. His bill is one thing but his senate testimony seems like an olive branch from someone who sees defeat on the horizon.

https://finance.yahoo.com/news/senate-release-housing-finance-reform-184405526.html Apparently Trump (Paulson?) doesn't like Corkers bill either.

And its own mini-Jumpstart in section 802(b)(1). Section 802(b)(2) ties Watt's hands: So receivership plus seniors in place equals zero for all commons and junior prefs. This is what Corker calls fair? hopefully its a negotiating starting point. and then in the end, the sr pref is canceled. my view, fwiw, on today is that mnuchin is undecided on whether a compromise can be found with corker in the next 6 months that appeases all parties. if so, we'll find out soon enough what happens to us. if not, then maybe the watt utility plan is a potential fallback, either in 2019 congress (if dems take over) or administratively (as a last resort). Correct, Sr Preferred Stock Purchase Agreements Section 808 still open to discussion. Does this section reference just the Sr Preferred themselves ie cancelled or the entire SPSA from the start? Is this where shareholders get their pound of flesh?

I think its important to not only hear but read corker say this. Bold my emphasis. "I actually believe that we have an opportunity to do something, its a very complex topic that matters, we have an administration that is willing to work with us, and I think for the first time we have an opportunity because of just all of the things that have occurred that, we have a lot of interest out there lets face it. We have people who have shareholders, we have shareholders in these entities today, and um, and I understand some of the rubs that have existed there (NWS). I think we have an opportunity to really though deal with all of the interests in a matter that is fair (some form of shareholder compensation), but also move our nation ahead in a manner that we dont have these two behemoths that are basically 100% right now backed by the federal government. Corkers understands shareholders complaints, and see this as an opportunity to move forward in a way fair to shareholders and to remove 100% of the responsibility from the US gov. Im buying more preferred. ;D

Just watching the hearing now. I think there is no doubt Corkers is heavily considering if not has already written receivership into his bill. He essentially bounces it off Mnuchin as an administrative option if congress doesnt act. In that light previous reports that his bill would make preferred almost whole meshes with his shareholder comments today. Cant say unless blindsided by a big change I would have any issue with a Corker bill at this point after reading the tea leaves.

Ive asked before and will ask again. Any reason to not go all in on preferred at least? This sounds narrow minded but only downside I really see left is that % return on agreed compensation/reinstatement etc of preferred is undesirable, ie 40% of par after waiting a couple more years and no div.

Another big volume day in FNMAS with little movement in price.

https://www.americanbanker.com/news/small-nonbanks-send-gse-reform-wish-list-to-senate https://www.americanbanker.com/news/backers-of-senate-gse-plan-reject-claims-that-its-too-conservative Lots to chew on in these articles

At the risk of going a little off topic this list is way longer then I thought! https://projects.propublica.org/bailout/list

Im going to have to go back and do some reading but if memory serves GM common was wiped in that "reorganization" or bankruptcy correct? Anyone quickly know what happen to the preferred there? I know this case is arguably different but it still involves the gov, UST, and shareholders. Im going to start reading at a minimum here https://seekingalpha.com/article/135638-general-motors-officially-wiping-out-common-shareholders FWIW Idk if anyone has a good recollection of what happened in each of the Financial Crisis bailouts but i think at a minimum may give some idea of what treasury might want to do to be additionally compensated.

Who knows and unfortunately activity and research like this couldn't be more useless. I think its time to put a conspiracy theory or that maybe the manager of a 529 fund "knows something"

My 2 pennies 1. Corker hasn't squawked about the capital buffer since it happened even though he was very against it last summer. Wonder why that is? It hasnt changed much I guess but when he engaged Watt at that one senate hearing he said that a capital buffer went against what was going on/or talked about/or what he was thinking if I remember correctly. 2. As much as Joe Light may have an angle against shareholders in his reporting he did report preferred shareholders would get treated favorably in the CW bill. The talk of receivership obviously is making and should make common holders nervous but for whatever reason in that drastic scenario preferred shareholders were still recognized. If that is the worse case scenario and he is the enemy working for the banks why would anyone hold common with a ~350-400% upside on some pfd issues? Secondly and blindly what is there to worry about. If the worst enemy is willing to recognize preferred shareholders what me worry? Just wait it out right? 3. FHFA does carry a lot of clout and their idea does seem to be much more favorable to shareholders in language but how favorable still remains to be seen. The utility structure though seems as if it would effect eps thus commons valuation vs a par for preferred. 4. Paulsons latest letter still mentions that he sees a favorable outcome, and there is still the political connection between Trump, Paulson, Mnuchin, Berkowitz which I think ultimately is what makes the outcome favorable or not. Without influence from these guys I think there is little to no empathy from congress and if so just enough to get a deal through. 5. Whats most bothersome is time. This has taken long enough and the latest information points to this taking longer. 6. Contemplating all of that I cant say other then waiting longer Im all that annoyed or worried about the final outcome yet as a preferred shareholder then I was last month. I would say just the opposite if I was a common holder. All of those heavily in common called CW 2.0 DOA and thats fine but now Watt is suggesting a utility model which after at least 80% dilution would lead to suggestively substantially lower rates of return and equity dilution and warrant selling by the gov that would overhang for presumably another couple of years. 7. As optimistic as I am it still could be a year or two until any resolution but if par is a possible outcome its worth the wait. Other then a token amount of speculative common I cant wrap my head around a large common position. There are many on other websites who stubbornly still fail to believe that they could end up with a zero or a heavily diluted share with a fraction of earnings power. Obviously a lot anchoring bias to an idea that money was stolen and someone is going to swoop in and give it all back. For those that do hold more then just a speculative amount of common how do you still justify it now with what we know and what level of return are you looking for to justify the position? An investment in this has always been binary, but, the preferred seems to have an added put politically, valuation wise (par), and more so legally then common. Outside of taking a paper loss on avg cost or an unrealistic dream of endless valuation and riches I dont see why a switch to preferred wouldn't make you sleep better at night for the reasons above.

I have seen this part brought up in several places. At this point I don't see why the warrants are illegal or on what grounds a lawsuit would be brought if they were exercised. Certainly anyone who bought shares after the conservatorship already knew about the existence (and thus possible future exercise) of the warrants. I dont think the warrants were illegal and I think to contest the legality of the bailout you have to put yourself in the time and place of what was going on . It will be a high bar to hurdle that it was completely illegal when you had BAC, WFC, C, GS, GE, Dupont, GM, etc etc needing a bailout from the gov or WEB. Every day there was talk of a huge financial institution possible going belly up needing gov support. Gov got warrants for nearly all of those bailouts too. The Net Worth sweep a different story, different time, different place. I believe this is also why Berk isn't contesting the original bailout. Way to difficult to say it was illegal at that time. Im trying to think but cant think of a mechanism that could preclude any more lawsuits in a newco or recapitalized company. If the gov exercises the warrants that means common still exists. I'm sure there is something that you holding common past a certain date or after restructuring would preclude you from suing. Such as accepting shares in the new company or cash selling the shares in the open market as a payout after gov exercises warrants. Who wouldn't accept either, or sell out of shares early with full notice and carry on a lawsuit? That doesn't of course mean you love the return you would get though. I think treating pfd favorably is a whole different world then common treated favorably. Prf getting treated favorably would mean par and maybe a div. Common treated fairly would mean you just don't get completely wiped out. Gov could treat common fairly and newco could dilute the shit out of common holders for years and earnings could blow if new competition is substantial.

How many common share did Ackman have again? As easy as it is to think "smart money" has been selling out of common due to knowing something about what may happen with common shares its likely just retail selling out.