SnarkyPuppy

So the Treasury had the clear opportunity to embarrass Obama / create political cushion for a recap/release (Tim Howard speculates mnuchin hasn't been forthcoming bc of the legal losses and therefore has no political capital to do so... how was this not the perfect opportunity to change that by giving up all docs..?) The legal thesis is not playing out as expected. The administrative thesis is not playing out as expected. Call a spade a spade.

Do these really affect you that much lol. Plenty of positives happening in the world. Think it's a matter of perspective and what you choose to focus on

Zcash has been on my list to look further into, but so far I haven't. There are so many interesting projects out there that there isn't enough time to look into them all. Bytecoin is another one and I just heard about EOS recently which looks interesting too https://steemit.com/@eosio I really like the article Liberty posted above: https://stratechery.com/2017/tulips-myths-and-cryptocurrencies/ I think that if this is a bubble it is more analogous to the late 90s internet bubble. A lot of development, a lot of money poured into a lot of different ideas, but most of them will fail. It is probably too early to know which ones will be the Amazon.com's or the Ebay's and which ones are the pets.com or the Netscape's. I only own Ethereum(ETH), bitcoin(BTC), Monero(XMR), & Dash(DASH). And that is the order from my largest holding to my smallest at today's prices. Thanks

rkbabang - thanks for your insight, definitely learning a lot observing your posts. Have you looked into ZCash? JPmorgan just did a deal with the founders (http://www.coindesk.com/jpmorgan-partners-zcash-team-add-enterprise-security/). Also, Naval Ravikant (https://www.farnamstreetblog.com/wp-content/uploads/2017/02/Naval-Ravikant-TKP.pdf) has publicly talked about having a position in ZCash. Curious if you have any thoughts/if you own?

"Trump budget estimates $fnma and $fmcc will give $142bn for "deficit reduction" over next 10 years under NWS; http://bit.ly/2rMPqj4 "

Considering moving my total position to Fairholme given my (legally inept) concerns re: private settlement. Don't really love exposure to Sears though (I can't short for personal reasons).

I'm seriously worried about a private settlement. Not sure the nuances of timing between the announcement of the settlement and ceasing trading of the shares on the OTC, but in theory you settle the cases with the existing plaintiffs and wipe the current shares so no new hedge funds can sweep in and restart the process.

"Rule of law" / "this is unfair" thesis continues to get obliterated. I'm not happy about it, but let's call a spade a spade.

Was clearly implying a settlement.

Yes, you win. Isn't that all you ever wanted?

I'm not so sure optics matter, but given Mnuchin is now a politician that hopes to get stuff done over the next 4 (8?) years then the hedge funds win coupled with teachers and cops losing is much more damaging to him than hedge funds win but so do teachers and cops. The latter is based on the principle that shareholders of all kinds deserve something (no bias). The former is based on the principle that Mnuchin doesn't care about anybody but hedge funds (bias). That likely wouldn't go over too well for his next 4-8 years in office. With all do respect, this is not investable information.

At what percentage of par were the retail shareholders converted? That certainly could happen, but probably unlikely given the optics that the hedge funds won, pensions (teachers, cops, etc.) lost and taxpayers lost* (by paying some money to hedge funds). That really would be hedge funds (and one mutual fund) won and everybody else lost (pensions by losing their investment, taxpayers by paying money to hedge funds). In other words, all investors except hedge funds (and Berkowitz) lost. *of course, taxpayers don't lose (except the pensions) but that would be the optics of the situation. Why are you so sure optics matter? It's immaterial if just the hedge funds win versus if hedge funds+ other shareholders win.

But you agree that there are potential situations where a housing bill that doesn't drastically alter the GSE/govt backstop model can still wipe out shareholders?

Desert_Rat- thanks for the response. I am just going to use quotes from specific areas of your post or else this will get too messy with embedded quotes. "I'll disagree with both those points. One, I'm reading and listening to a growing number of supporters of our cause, whereas 5 years ago we deserved it. So much so that I think a nice base has settled under the preferreds and I'd be highly surprised if we dropped into the $2's again. Two, Judge Brown's statement about banana republic indicates there was nothing at all strong about the appeal court's decision." It's wonderful that Judge Brown wrote that. We still lost the appeal. So back here in reality, this was a massive negative. "The reasons I own today is because this does constitute the greatest 'taking' in US history. There is no valid argument against that although many have tried. Even the two judges who struck us down did so because, not only did they fail to acknowledge the political element, HUD, which primarily caused the mess, but also because they aren't accountants - they had no idea how forced the conservatorship was." But there has been a valid argument against shareholders. See Perry appeals case. I know you disagree, but the facts that matter so far dictate otherwise. "(I'm not aware of Citibank deal. Are you referring to Wachovia shareholders?)" I'm referring to the Citigroup bailout deal where the government converted the preferred shares at a haircut to par, yet a private shareholder (foreign country, can't remember) was converted at par. There's "retail shareholder" risk here in any "settlement", IMHO. "I really don't understand how anyone could even imagine a bill that substantially changes the way housing finance has been done in this country for 70 years; that supports the 30 year; that Congress is able to tweak on occasion, would pass. I can't. The Dem's can't. Where are the votes coming from that would side with tossing out a highly successful housing finance platform? Christ, Congress can barely tie its own shoes." Really? You can't imagine any scenarios where the jr preferreds are wiped out? You should go all in then since this is such a home run. Agree with cherceza that the preferreds are a good gamble at current prices. But for very different reasons than those posted by yourself. Indignation has proven to be a losing thesis (so far).

I don't disagree. I'm largely playing devils advocate to spur conversation. I'm very confident this will scenario above is one of the most likely, if not the likeliest scenarios which is why I own shares. But there's a few ways in which the current capital is dealt with and if we're going through congress, it's pretty clear there's a lot of animosity against shareholders (probably self created).

You could argue that governments providing some layer of regulation could be a catalyst for increase in layman use.

Mnuchin's tone flipped once the court rejected the appeal, so I think it's safe to say that he isn't exactly in our corner anymore. If he can accomplish what he prefers while screwing us is another matter. Mnuchin isn't pro-FnF shareholders, he's pro-Treasury. That's his job. I haven't seen anything from him to indicate that he wants to specifically help or screw FnF shareholders. Given that some people included Mnuchin's relationships with shareholders as a positive in the investment thesis, I would give Mnuchin some credit for showing integrity in his job and not overtly favoring them. I still don't think Mnuchin will go out of his way to screw shareholders. To me, he has been consistent that FnF need to continue to exist because they provide necessary liquidity and would, as private shareholder-owned companies, also provide private capital as a buffer to taxpayer support in the event of crisis. But neither is he going to cut a deal that hands shareholders a huge windfall profit for no reason. Yeah, no. I get the gist of what you're saying, and with that I agree, but stealing because you can, because Lew did, is still wrong no matter how you slice it. Anyone in Mnuchin's position should be standing up and saying no, I won't be part of this. That's not to say he isn't doing exactly that behind closed doors. These high level arguments, i.e. "this is theft / rule of law in our country" argument, have done absolutely nothing for this investment. You can actually make a strong case that the court has so far very strongly ruled that it isn't wrong / isn't theft. We obviously have our own opinions on the issue, but the court has so far said they're wrong. Your personal opinions may simply hold the bag at the end of this. The reason I still own this has nothing to do with these nonsensical claims regarding "obamacare theft" and "rule of law" and "mnuchin is shareholder friendly" (incredible amounts of bias at play to think that this guy cares at all about shareholders and is on any "team" - in all reality he probably hasn't spoken to Berkowitz and Berk is just as in the dark as the rest of us). It's also a major risk that Mnuchin settles with the plaintiffs in the private lawsuit, and any other major hedge funds who own the preferreds outside of public markets, screwing the retail shareholders. If he does this at the same time as ending the current GSE structures and the shares stop trading, a new hedge fund cant swoop in and continue the lawsuits. The reason I still own this is because it's an incredibly messy situation and I'm not sure the government can come up with a clean solution without at least paying out contractual rights on preferred shareholders to end the lawsuits, but as I said I worry heavily about a private settlement (ala Citigroup deal which converted public shares at much less than par, but some private shareholders at par). The problem is, there's a strong case to be made that "new" GSE's will be established (probably utility-like FNMA/FMCC with new charters) and as part of that reform shareholders will be wiped and some form of new capital will be brought in. Once again, there's a school of thought that "not a single investor would provide capital to a new entity if shareholders are wiped out", and once again I don't think this argument is entirely bulletproof. If you make explicit what historically has been implied, and if you remove any actual real risk that taxpayers will need to step in again, there will absolutely be people lining up to purchase government regulated oligopolies. Give investors a certain level of return related to risk, and capital will come in.

What? He hasn't done this. And I'm not sure if he's a beacon for the enemy of "lying and deceit" (he will tell you he is, believe me). Not to make this political, but stop being ridiculous.

So basically this entire thing is predicated on the fact that Mnuchin secretly wants shareholders to prevail because he was once on a board with Berkowitz

Mentioned in an earlier post that she's trying to pay for tuition. Can't see how this ends poorly ::) Either college is all paid for or no college. Poor Berkowitz has 35% of his fund in this and now he has to worry about someone going to school I think recent interview he said he will lose 12-15% if things doesn't work out. Depends on timing. He had 35% of his fund in it as of the last report and as high as 40% in it when prices were at their highs pre-perry decision.

Mentioned in an earlier post that she's trying to pay for tuition. Can't see how this ends poorly ::) Either college is all paid for or no college. Poor Berkowitz has 35% of his fund in this and now he has to worry about someone going to school

Mentioned in an earlier post that she's trying to pay for tuition. Can't see how this ends poorly ::)

All commons, switched from preferreds to commons. There is no chance that they will restore dividends and no chance they will pay at par in next 2-3 years. That would be the only way to be in preferreds. False sense of security does not work for me. I hope you understand the risks involved in holding commons are tremendously higher. There are quite a few ways (in my opinion, the most probable ways) where preferreds are made whole without a dividend being paid.

80% pref 20% common

Plan is Watt will be gone soon. President Trump will soon have the right to fire him. Watt will not matter. One at a time. I also read that the FHFA deputy, Bob Ryan, was VP at Wells Fargo, WFC is out to steal GSE business. They think everyone is dumb. Haven't seen anyone mention this, but I think it's pretty clear trump will just get rid of anyone that doesn't follow his plan (assuming his plan is to end conservatorship)