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I support this post. it makes good sense --- the warrants can fund most of the public portion of the $1trn infrastructure plan

stopping the sweep could've changed the tone of the forward discussion in regards to some real action rather than words or hope. i'm obviously looking at this from the outside without any knowledge of future strategies but it's disappointing to me that they don't have an urgency to right a major wrong. the table was set for them with a simple sweep stoppage + reiteration of bipartisan reform and they punted. I wish everyone good luck --- looks like we'll need some.

not sure a dollar is a dollar. as far as I can tell there's the standard monies appropriated by congress and then some other slush funds which are far smaller than the other category and likely the source of the subsidy payments. I suppose so but do you happen to know how much of Obamacare is funded by this slush fund? I don't and it simply seems odd - if it was material, then surely Trump could just turn of that discretionary tab and disable Obamacare that way :). In other words, for me, unless someone can show me that a very material part of Ocare is funded by money not appropriated by law but from some sort of kitty, then I don't buy ... let's not forget, this argument was put into the public domain by the "Elvis is an alien and not dead/national enquirer type crowd". ;-) his article on mar13 I thought was compelling. then combine that with link in my original post, suggests to me at least it's more likely than not. anyway, thanks for your thoughts.

not sure a dollar is a dollar. as far as I can tell there's the standard monies appropriated by congress and then some other slush funds which are far smaller than the other category and likely the source of the subsidy payments.

Where did you see that in this filing? All this filing says is that it dropped support for FHFA. BTW, could this imply that Mnuchin and Watt don't get along? Otherwise FHFA could have just filed that they don't think they are constitutional either. What I observed is that this country seems more divided after the election and all Democrats would oppose ANYTHING the Republican says, without any rational thinking. they only asked to remove 1 footnote which means the rest of their 30page brief stands? it appears tax reform will take the rest of this year. add in immigration, healthcare, and infrastructure, there's little-no room on the agenda for housing reform probably this and next year. so we're likely at the mercy of administrative/fhfa actions and the courts, or a long winter imo.

if your goal is a full recap / release / pre-2007 then yes he will disappoint. if you're looking for the rule of law, and a housing system that includes reformed GSEs with some other competition, he might just be your man. time will tell.

after reading Jerome corsi's reports and the executive summary of the link below, I believe it's far more likely than not that FnF profits have at least in part been used to plug holes in Obamacare, in particular the cost sharing reduction program -- which provides subsidies to insurance companies to help pay exchange participants' deductibles and copayments. the expected funding need for this program is $130bn over 10 years. waysandmeans.house.gov/wp-content/uploads/2016/07/20160707Joint_Congressional_Investigative_Report-2.pdf so what does trump do now that paul ryan's plan failed, does he expose this situation and vindicate corsi if it's indeed true? trump is on record now saying Obamacare will explode and the House Republicans have not only failed to fund this CSR program but they successfully sued the Obama admin to stop the payments (under a stayed appeal now I believe). In addition Congressman Chaffetz' short open records bill the other day seems like an attempt to shed light on the situation. any thoughts?

... game set match?? are you joking? the roadblock to a fair outcome is far more likely coming from congress (direct and indirect as it relates to other agenda items) than from fhfa. if I had to bet, mnuchin and watt get along fine. if trump's approval rating was 60pct instead of 40pct, likely there would be more aggressive actions to change things. (this dynamic is also most likely why the HC bill failed, his popularity isn't high enough to allow him to get what the admin prefers). I thought everyone was in agreement Congress wasn't required for Tsy to act in a way favorable to shareholders. This filing seems to be explicitly a very positive sign - why is this wrong? unless he gives up on the hard right wing republicans and goes for the democrats + moderate R's to pass his agenda on taxes, infrastructure, immigration, housing, and healthcare, then trump has a razor slim margin to pass legislation using only R votes in congress --- he has to be careful not to piss off some of them. also in this filing the trsy is STILL fighting the plaintiffs on the NWS. and it's likely that watt would go along with mnuchin if he wanted a 4th amendment and/or to stop the sweep. Watt is a traditional democrat, a group that has been pro-GSE in the past. but you may be right --- if I am wrong and watt is acting as a roadblock, mnuchin wants to bypass congress at some point and this case is won by the plaintiffs, then it's a major positive.

we all can hope. unless we've misread mnuchin and the other cast of appointees, fear of political backlash is the only material reason to sweep this week. I personally hope they stand up for what's right but the market and tim howard suggest otherwise. it may be one of those things where what's best for the long term doesn't align with short term preferences.

... game set match?? are you joking? the roadblock to a fair outcome is far more likely coming from congress (direct and indirect as it relates to other agenda items) than from fhfa. mnuchin and watt probably get along fine, even if mnuchin would rather to appoint someone else. if trump's approval rating was 60pct instead of 40pct, likely there would be more aggressive actions to change things. (this dynamic is also most likely why the HC bill failed, his popularity isn't high enough to allow him to get what the admin prefers).

technically, can watt pause the sweep on his own? I mostly agree with the market and tim howard that mnuchin would prefer to have a plan in hand before moving on the NWS. but I don't think he would get in the way if watt decides it's time to pause it and takes full ownership of the decision. thank you

news headline from mnuchin this AM that public funds from infrastructure are expected around 200bn with the rest from private. the warrants could fund this. although not directly related, ben carson mentioned the words white house, housing, and infrastructure in the same sentence in an interview the other day.

per today's article, less 2017 congressional action likely means more room for mnuchin to act administratively --- an option he explicitly left open in the confirmation hearing. I wish everyone great success!

Steven Mnuchin quote on Mar 1 2017: "I've been involved in the financial markets for over 30 years and there's 2 things I am 100 percent convinced of: markets are not efficient and...." best of luck everyone!

did you listen to the Hamish hume call? the breach claims will take a year at least, discovery, motions, etc. takings longer in sweeney. and the end result is either a loss or a win where --- absent any other solution --- the damages could very well be a less than the current securities value. in addition, if someone didn't buy pre-2012, then they might be shut out in the takings claim. they need to go through with the cases to keep some leverage in any political negotiations and in case all political solutions fail. but the call to me suggested all the legal juice is in the APA injunction for the NWS where we need a texas or Midwestern judge to see the craziness of the 3rd amendment. i'd welcome any thoughts where i'm wrong. Yes, I listened to the call. Most of your comment is merely that it might take longer. That has little to do with whether it incentivizes Ps to beg to settle as that has more to do with the fundamentals of the breach claims than how long it takes them to litigate it. (Again, I feel the need to point out that I hold only preferred shares. It's probably true that the common shareholders would beg to settle at this point.) Moreover, you should re-listen to Hume's discussion on page 69. He specifically talks about why he thinks the court is wrong. Alternatively, you could read what the court wrote and see where they misapplied Delaware law. Either method should bring you roughly to the same conclusion. I do not know about the Delaware case, maybe that's a better ticket. the discussion about pre-2012 distinction could be wrong in the breach of contract cases, yes. but he said it's firmer in the Sweeney takings case. moreover he said the stock price in 2012 is a key factor in determining damages. i doubt fairholme is excited about spending another 1-2 years doing this and either losing or winning and getting awarded a few bucks in damages, well below current price levels. the apa injunction was/is the meat on the bone it appears.

Mnuchin has said he wants GSEs to continue without govt ownership and with safety to taxpayers...which says to me rebuilt with private capital. So that seems to me that mnuchin is going to have to come to Ps for settlement in order to clear path for additional fundraising. So while this decision was an abomination it accomplished enough for Ps for mnuchin to understand that he needs settlement to pursue his plan. mnuchin is smart. unless I am missing something he knows the perry + fairholme plaintiffs have a weak hand vs. current preferred share pricing. what would he offer them to settle besides a comprehensive political solution --- which is currently premature? if mnuchin wants to settle it's with all plaintiffs including the regional APA injunction ones i'd guess - which once again brings back to a comprehensive political solution. I see no legal settlement at this moment. if apa had been remanded I would have a different view. edit: another potential positive via the legal channel is sessions, after looking at the 12k documents, decides he's not comfortable defending the gov'ts case and they simply revert back to the prior deal (no nws). i'm guessing this would be easier to do in jan18 due to the jumpstart language (would the overage payments be treated as sr preferred paydown or would govt have to resend cash due to non-relinquish language) but not sure.

did you listen to the Hamish hume call? the breach claims will take a year at least, discovery, motions, etc. takings longer in sweeney. and the end result is either a loss or a win where --- absent any other solution --- the damages could very well be a less than the current securities value. in addition, if someone didn't buy pre-2012, then they might be shut out in the takings claim. they need to go through with the cases to keep some leverage in any political negotiations and in case all political solutions fail. but the call to me suggested all the legal juice is in the APA injunction for the NWS where we need a texas or Midwestern judge to see the craziness of the 3rd amendment. i'd welcome any thoughts where i'm wrong.

As discussed long ago, my concern is do they amend their claim and/or focus on ownership prior to the NWS allowing major prfd P's to settle while everyone else who purchased after the sweep gets screwed. I have less and less faith that any of the litigation is going to help us. As said in the audio, typically conservative judges respect property rights. The question is does the admin respect property rights enough to protect shareholders despite court cases. It seems to me the admin needs some cover in order to make a settlement that benefits shareholders and I can't understand why the Sessions DOJ continues to follow the Obama obstruction theme. Only silver lining in this is that I invested solely on the premise we would win the litigation. If HRC had won, I think common would be at a $1 or less and prfd close by. after listening to that podcast I believe the plaintiffs would beg to settle now. but what's in it for the govt to settle since likely the other apa / injunction cases march ahead? the real settlement is a political solution where everyone wins --- sweep stops, sr preferred canceled, warrants utilized in some form, capital is raised, the companies are reformed and after some time released. also the plaintiffs would be crazy to want an en banc review, based on this podcast, a waste of time and money imo. just move on with the breach + takings claims, watch the other apa/injunction claims, and hope for supreme court on apa if political avenue stalls. edit: at these prices the main arguments for holding preferred over common are dilution and liquidation imo. courts, not so much, at the moment, unless you bought a long time ago.

wow - so insightful. thank you. the takings and breach of contract seem much less relevant or powerful than the APA claims or political solution imo. the takings and breach of claims will take a long time and even if you win the damages payment is likely to be a loss or maybe a limited win from here bc of the stock prices (I know it's only 1 factor) in 2012. also in the Sweeney case it's less clear if you needed to own pre-sweep to win a damage. it's clear to me we need one of the other lower courts to take judge brown's view on the APA OR a political solution. good luck everyone! ps - great speech last night.

I understand your frustration with one court (Perry) being partially affirmed (arguably the part that impacts pref shares the least), but keep in mind that there are many cases still pending... Delaware, Sweeney, Collins, etc. With that said, I totally can understand why somebody would want to sell a portion of their holdings given the uncertainty. Markets, and people make up the markets, mostly hate uncertainty. I'm standing pat because I still really like the potential reward given the risk. for me it's a bet on America. Either you think someone --- a politician(s) or a judge -- will provide justice or you don't. there is plenty of room for everyone to share in the outstanding work the employees of FNMA and FMCC have produced. all that said, we're only a week removed from a couple setbacks so there's likely more shareholder turnover involved over the near term. after a major gap drawdown it takes time. Judges and politicians often don't provide the justice we seek or think we deserve. Good luck to all! of course. there is risk. regarding politicians i go back to the roster: mnuchin, ross, Paulson/berkowitz, carson, mulvaney, Blackwell. regarding judges, all it takes is one? (with the assumption that sessions wouldn't appeal).

I understand your frustration with one court (Perry) being partially affirmed (arguably the part that impacts pref shares the least), but keep in mind that there are many cases still pending... Delaware, Sweeney, Collins, etc. With that said, I totally can understand why somebody would want to sell a portion of their holdings given the uncertainty. Markets, and people make up the markets, mostly hate uncertainty. I'm standing pat because I still really like the potential reward given the risk. for me it's a bet on America. Either you think someone --- a politician(s) or a judge -- will provide justice or you don't. there is plenty of room for everyone to share in the outstanding work the employees of FNMA and FMCC have produced. all that said, we're only a week removed from a couple setbacks so there's likely more shareholder turnover involved over the near term. after a major gap drawdown it takes time.

if trump delivers justice, he will have a handful of community bankers + policemen + nurses in his office ---- they sold tens of billions of preferred securities to pension funds and community banks a mere months before the conservatorship. keep in mind i'm not talking bad about hera, some times investments fail. but the nws has stunk since the day I first read about it.

are you sure about that? I am not sure, but from what I read, certain aspects of Obamacare needed to be funded specifically and only by congress, rather than some general fund. the Obamacare adjustment is proving to be very hard to get through ---- the administration, if there's truth in this, could say the ACA is in worse shape than thought, the prior administration plugged holes with housing profits, even more reason why we have to fix it.

if you read the blog post link from schwab's post above and you read the executive summary of the joint congressional investigative report into the source of funding for the aca's cost sharing reduction program (the link is in the blog post) which talks about an investigation of treasury and HHS where the Obama admin did not cooperate then can anyone say for sure that FnF sweeps didn't pay for aca cost over-runs? Can you say for sure that they did? no - did I say they did for sure?

I'm glad you said it. I too have read about this situation for a long time. It's not new. What is new is the possibility that it will be used in the battle against ACA. Any headlines that put the theft of FnF front and center is really great for us. good point. we have limited visible support, any extra could help.