waynepolsonAtoZ

"sorry. i would put it this way: the scenario in which the pref does not do well is also a scenario where the common also does not do well. i can see where the pref does well and the common does less well, and also where the pref does well, and the common does better." The common would do better if there is less earnings dilution, preferred would do better if there is more.

Just a note that the Tfud index on the preferreds is at 17.5052%, which is based on $284/$1,625, average closing price divided by the total redemption value of the FnF preferreds (ignoring the one with a redemption value of $105,000). It was at 10 percent not so long ago. It does seem a little surreal and it could get dampened by a bad appeals court decision, but I'm hoping that that won't happen. Still, 17.5% implies that there is still plenty of upside here.

FCC case, does someone have the cite? Is it a net neutrality case? I've argued elsewhere that Internet service should use the common carrier model, not the "information service" model. Not a lawyer, but I understand that the FCC has the authority to decide which model to use. Regulation ends up being different depending on which lane is chosen, slightly anologous to FHFA being able to decide between C and R. Scalia agreed: http://www.theatlantic.com/technology/archive/2014/05/net-neutralitys-little-known-hero-antonin-scalia/361315/ I imagine the big players supported Trump and that we'll see various kinds of "choking" and picking favorites by the major telecoms going forward.

The SPSPAs signatories are Treasury and FNMA and FMCC, although really FHFA signed on their behalf for all practical purposes. So, Treasury and FHFA can do a 4th Amendment or whatever without involvement of Congress. Treasury has said they want Congress to restructure, but that was basically just a stalling tactic IMHO.

So, the list of preferreds is missing FREGP, a $50 preferred, with a 5.81 percent indicated dividend rate. So, the last time I calculated the T-Fud index I used a numerator of $175, which was the total price of the various preferreds. I ignore FNMFO, which has a redemption value of $105,000. So, the denominator I use to calculate the so-called T-FUD index is $1,625. So, the last time I calculated the T-Fud, the result was an average price to redemption value of 10.7778%. This is, obviously, over a week out of date, I think the tfud is around 15% now.

I've calculated the upside for commoners is $24 billion, but that assumes that the warrants are issued. Please feel free to take that $24 b times five if you want to do so. It's conceivable in the era of The Donald. Upside for preferreds is $28 b assuming return to redemption value. In an era of pay-to-play politics these numbers may be all that matters.

In terms of pay to play politics, finan recap with $200 billion going to recapitalize the GSEs would involve considerable I banking fees, say at a four percent rate to make it simple. That's what, $8 billion? Not to mention selling Treasury's warrants with the $ flowing to Tsy, that could be many billions for I bankers. It's also full employment for "experts," consultants, lawyers, bankers, public interest and I don't know who else. Also, there is the question of what to do with the Senior Preferred Stock that can never be repaid. There's also the court case and so on. Gridlock in Congress so treasury would be at the wheel.

I believe you re totally not analogous. But, I'm not a lawyer so I don't really know (or care for that matter). Just fooling around to distract myself at the end of this terrible election season.

Judge Brown dissents on "qualified immunity." She sides with law enforcement and thinks what they did in the 1st search was within the bounds of their discretion, although the 2nd one wasn't, keeping in mind that law enforcement had to act quickly despite imperfect and asymmetric information. Stretching the point to apply to GSEs, is the 3rd Amendment deserving of the equivalent of qualified immunity? I don't think so and the discovery that has been given to the appeals court makes it clearer that what Tsy/FHFA said was the basis of the 3rd Amendment wasn't actually the true basis. Still, a court will be cautious when overturning the gov't. Again stretching a bit, I've always thought that a judge would have a hard time second guessing Tsy/FHFA at the time of the 2008 financial crisis, but what they did on August 17, 2012 seems different. I think the discovery stuff helps. I also think that Judge Brown will tend to be reluctant to agree that HERA of 2008 gives Tsy/FHFA "unqualified immunity," i.e., that can do whatever it wants without court oversight. Constitution in exile federalist society type judges like Brown and Ginsburg would tend to be skeptical about giving a regulator like FHFA too much discretion, not to mention that the Tsy isn't supposed to oversee (direct and supervise) FHFA, which is pretty clearly what it does via the SPSPAs. I can see why this decision took awhile. Brown had to finish her dissent and then Judge Rogers had to explain why the majority "dissented from the dissent." That takes time. This isn't unlike what happens when a three member public utility commission deals with when there is a dissent in a big case. Most decisions are immediately issued, but the orders in big cases with dissents can take much longer.

Q. Re that mandamus re 56 documents “executive privilege” at the federal court of claims, is this something a magistrate judge could take care of or would it be a three judge panel? A. There are no magistrates at the Court of Appeals level, so I think the question is: does the petition go straight to a merits panel (such as would review any normal appeal) or does it go to a rotating motions panel? The Federal Circuit’s operating procedures indicate that it would be the latter. See IOP 2.9. Either way, however, a three-judge panel would review the petition. It’s unclear to me whether any order issued by the motions panel reveals the names of the judges who considered the petition. http://www.cafc.uscourts.gov/sites/default/files/rules-of-practice/IOPs/IOPsMaster1a.pdf

Rather than a line of credit, would it be financial recapitalization, i.e., raising a $100 b of book common equity capital that you are talking about?

An attorney referred me to the attached document and pointed me to page 6. This has to do with the legal standard re a mandamus. In_re_Queens_University_at_Kingston.pdf

Thks. I had thought that the honorable Judge Sweeney had written an appeal proof decision, if there is such a thing. I would think that this would be the kind of case where a court would be expected to act expeditiously. Confidentiality agreements or the equivalent are used all the time in discovery. I assume that "documents produced under seal" is like a confidentiality agreement on steroids. I had to sign a confidentiality agreement in one of the cases I'm involved in. One has to take that seriously. I'm not a lawyer, but lawyers would (I understand) be subject to sanctions if they somehow violated a confidentiality agreement and were caught doing so.

Just a quick question/comment. I gather that the Court of Appeals for the Federal Circuit is completely separate and distinct from the Court of Appeals, DC Circuit. I guess the idea might be that "executive privilege" is a specialized issue and so they send it to the Federal Circuit rather than the DC Circuit. An implication of that specialization might be that they are "used to" the issue and have procedures in place to deal with it expeditiously. Judge Sweeney already did the in camera review, so the Federal Circuit would look at it again de novo, but with the benefit of having read Judge Sweeney's decision.

Still, it sounds as though they are making it harder for "putbacks" to occurs (reps and warranties), which isn't great for GSE equity investors. Separately, I watched the Hamilton (PBS) doc online last night. It's excellent (as is the musical), but I didn't really like the comments by Hank Paulson and Geithner. Hamilton's plan to have the federal gov't pay back the states' debt may have in some sense been the first "bailout," but at least he didn't pick winners and losers. Unlike Paulson and Geithner, who were punitive to FnF and AIG.

I would go, but for the $2,895 entrance fee.