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It is inappropriate that they waited until the 'lame' duck to potentially remedy the absurd NWS and unfortunately there is a real chance -- which the market agrees with @ 35pct of par pricing -- that they don't have the capacity and/or courage to act before they depart.

potentially, a) some creative warrant alteration b) capital rule buffer relaxation with new FHFA head c) no action which allows capital to build organically Also, I suspect some long pref holders short common as a hedge and chose to cover. We have invested alongside mostly hedge funders in the jr pref -- many of them are a) trapped longs and/or b) fearful of ruining their year with a gap down.

It looks like this is regarding CARES with Powell. I would not be surprised to see someone on the committee (warner) ask about the GSEs with his letter out there needing a response. Expections for anything in the near term before wed should be low. could go either way. Mnuchin may prefer to face the questioning with a press release out, to which he would just refer If it's not the last moment possible, it's fruitless to anticipate potential action - based on their own behavior.

Interesting. That's not how others have described it but I can't say your view sounds wrong.

Good point. Even if we get a 4th amendment, the pool of long term trapped longs aching to exit would likely be large enough to cap price gains somewhat.

They waited until the last possible day for the letter agreement. January is likely the decision point on whether a 4th amendment occurs. From commentary on this board it appears the Collins case probably needs to go ahead on Dec 9 to avoid a quick firing of Calabria at will soon after Biden's inauguration.

This is getting really interesting! Hoping and speculating we will see something concrete after all. Speculating? I don't know how much more this can be telegraphed at this point. Most savvy investors won't pretend the Americans who wake up and sell these securities today are idiots.

They probably regret it too because it likely cost them the election -- less than 50k votes combined was the difference in az/ga/wi.

why's the common under so much pressure? those buffers could melt like butter when calabria is likely kicked out in mid 2021.

Except it mentions "immigration, trade, health care, China and school choice", but not housing. Nonetheless, it's been clear for a couple weeks that the Trump admin is making whatever moves it wants now with zero concern about what anyone thinks about it. Senate Republicans are even willing to put the completely unqualified Judy Shelton on the Fed Board just to make Trump happy. So setting aside whether you like or dislike any of these other moves, it does imply that Mnuchin would be willing to finish off the NWS and let the GSEs recapitalize, but will Calabria be scared off by the talk that Biden's Adminstration will target him for removal if he makes any big changes in the next two months? It seems that Calabria has the decision to make - does he want to keep the job or does he want to stamp his legacy on the GSEs while he has the chance? P.S. While all this sounds good, my preferreds remain stuck at about 27% of par value. There is a very low chance Calabria can convince a Biden admin to keep him if the FHFA head becomes fire-able at will. But I agree @ 27pct of par value, the market does not even come close to believing in a 4th amendment that the message board and twitter community has mostly convinced themselves is coming.

Like many others here, I was in this trade before Trump even started his campaign in 2015, so clearly my naive assumption all along was that the courts would be on our side. But while there is a possibility that the courts could finally come through for us, as a preferred holder I would gladly accept a deal between Mnuchin and Calabria to write off the senior preferred and settle the lawsuits. If you hold the common stock, perhaps some would prefer the gamble that the lawsuits yield a bigger payday, but that's a risky play, if you ask me. We have no inkling on the stance of the plaintiffs - Berkowitz et al, but one would think they have some incentive to cut a deal with this admin rather than take their chances with SCOTUS or Biden admin. If I was in their shoes, I'd be making some efforts... efforts, yes. but the bid-ask is probably too much still with jr pref @ 30pct of par. By fighting in Court the govt continues to unethically and perhaps illegally turn the screws on tens of thousands of its citizens.

If we go SCOTUS, it matters to me because I don't see anything to force the UST under Biden to write down the SPS. Even after a SCOTUS win. what about a negotiated resolution if Plaintiffs win? Both sides probably wouldn't want to see the $125bn transfer from Tsy to the companies.

By taking them? Why would the Dems reverse themselves and set the twins free? Lawsuits They can't nationalize them (or their securitization functions) which was the plan hatched under Obama due to the lawsuits, so the second best option for Dems is to release them. The third option, preferred by the far right, is to destroy them via onerous regulation (i.e. Calabria's plan). Dems are less likely to choose this than Rs. fourth option: indefinite conservatorship

This likely reflects Mr. Tim Howard's political views. Also IMO his primary objective is advancing FnF's homeownership mission over the shareholder / NWS issues.

While that would be nice and just, the Jr pref @ 30-35% of par with sellers everywhere is a clear signal that nothing is likely to happen and we're on a hold course until the June SC ruling. We were likely abandoned by the Trumpers who narrowly lost the EC by ~50k votes due imo in part to their repeated punting of this issue and the inability for FnF to support the economy in a more robust manner this year.

how does this square with your earlier comment that if Collins settles at SC then the Collins 5th circuit en banc -- which ruled Calabria can be fired by Biden -- goes into effect? squares perfectly. ask yourself some questions. is Collins 5thC decision in effect now? YES. was that decided before Seila? YES. does SCOTUS trump 5thC? YES. is there an open question whether Seila applies to fhfa? YES. if collins settles before SCOTUS decides collins, does the open question whether Seila applies to fhfa persist? YES. if C receives a removal without cause and he wants to fight it, can fhfa make the same arguments in federal district and circuit courts that are being made now before SCOTUS, that Seila doesn't apply to fhfa? YES. will this all take time if C decides to pursue this path? YES. should you be in this investment if you dont understand above? NO not saying C will take this path, but he can take this path. ok. i went off track in your first question - I thought the Collins 5th Circuit en banc decision goes on 'hold' when the SC decides to review the case. no?

how does this square with your earlier comment that if Collins settles at SC then the Collins 5th circuit en banc -- which ruled Calabria can be fired by Biden -- goes into effect?

no the 5th C en banc remains after any settlement that terminates the cert grant. not the same situation as when a C grants en banc review of and thereby vacates a merits panel decision. the law on APA claim would remain split among circuits If this is true there likely won't be a Collins settlement, at least on the constitutional angle. Biden could fire Calabria on Jan21 rather than 5 months later or possibly not at all if the SC finds FHFA director to be different than CFPB. a settlement on both collins claims suits both C&M. while I dont see Biden admin focusing on GSEs right out off box given that housing is doing well and Biden needs to show action on pandemic, settling collins will give C ability to resist any Biden at will firing for the year it would take to settle. but again I do not see Biden trying to terminate C at will especially since Biden would need senate confirmation of replacement which Rs will still control and the replacement would have to go through SBC which will be headed by Toomey, who is pro recap/release 2 major assumptions in this: R's win one or 2 of GA senate runoffs and Biden's intentions on housing - both could easily be wrong. Also what does this mean: "settling collins will give C ability to resist any biden at will firing for the year it would take to settle". IMO if your original statement is true that a settlement on Constitutional simply reinforces the en banc -- which may or may not be true -- then the best we can likely hope for over the near term is a settlement on APA or simply a 4th amendment outside the legal realm. yes I expect Rs to control senate. I have clarified my post to say " settling collins will give C ability to resist any Biden at will firing for the year it would take to end litigation process." apart from that, I can explain it to you but I can't understand it for you ok but it still doesn't make sense to me. if 5th circuit en banc ruling on constitutionality is entrenched and activated with a collins settlement at SC then Biden could fire Calabria in 10 weeks - which is likely not Calabria and Mnuchin's goal.

no the 5th C en banc remains after any settlement that terminates the cert grant. not the same situation as when a C grants en banc review of and thereby vacates a merits panel decision. the law on APA claim would remain split among circuits If this is true there likely won't be a Collins settlement, at least on the constitutional angle. Biden could fire Calabria on Jan21 rather than 5 months later or possibly not at all if the SC finds FHFA director to be different than CFPB. a settlement on both collins claims suits both C&M. while I dont see Biden admin focusing on GSEs right out off box given that housing is doing well and Biden needs to show action on pandemic, settling collins will give C ability to resist any Biden at will firing for the year it would take to settle. but again I do not see Biden trying to terminate C at will especially since Biden would need senate confirmation of replacement which Rs will still control and the replacement would have to go through SBC which will be headed by Toomey, who is pro recap/release 2 major assumptions in this: R's win one or 2 of GA senate runoffs and Biden's intentions on housing - both could easily be wrong. Also what does this mean: "settling collins will give C ability to resist any biden at will firing for the year it would take to settle". IMO if your original statement is true that a settlement on Constitutional simply reinforces the en banc -- which may or may not be true -- then the best we can likely hope for over the near term is a settlement on APA or simply a 4th amendment outside the legal realm.

no the 5th C en banc remains after any settlement that terminates the cert grant. not the same situation as when a C grants en banc review of and thereby vacates a merits panel decision. the law on APA claim would remain split among circuits If this is true there likely won't be a Collins settlement, at least on the constitutional angle. Biden could fire Calabria on Jan21 rather than 5 months later or possibly not at all if the SC finds FHFA director to be different than CFPB.

The Democrats are favored to sweep. Thus I guess we'll find out in the next 10 weeks - the last 5% of Trump's presidency - if the administration will admirably correct the NWS wrong. Good luck to everyone!

Word on the street is that PSPA is coming around Thanksgiving. I guess the likelihood of this depends on if you believe the market has any predictive power. I believe it does and therefore am skeptical.

If they had led with courage they'd likely be monetizing warrants at this moment to pay for a politically beneficial program of their preference. Rather mnuchin hid behind lawyers the past 20months post-watt and fought to further legitimize the illegal and/or unethical NWS. Could cost them the election when combined with the housing stimulus a semi-capitalized FnF would have provided in 2020.

if Mnuchin settles collins wouldn't the fhfa director removal go away also - and so a challenge to his constitutionality would start anew?

The capital rule delay, assuming the final rule comes out by Halloween, may be orchestrated such that a potential 4th amendment / settlement in the lame duck session looks less 'lame' than if the rule was finalized in May - Mnuchin can say he needed to wait for it. If Trump wins, I'd expect things to progress slowly but hopefully with higher likelihood of success. Collins goes to trial, Calabria remains entrenched high on power. If Tsy wins Collins, then the sr pref is partially monetized and if they lose the courts give Mnuchin the cover he likely covets. If T loses, it obviously gets dicey. From what I've read here Calabria can stay in power post Jan-21, perhaps a lot longer, if Mnuchin does the right thing and settles Collins before the admin turnover (which obviously is a big if). A new legal challenge to Calabria's constitutionality would have to arise which could take years to flow through the system. This would be a potential scenario consistent with Calabria's testimony, unless I'm mistaken above.