DRValue

I have a bunch of different prefs but mainly fnmas, fnmaj, fmckj. The less liquid fnmaj always traded at a pretty steep discount to fnmas due to liquidity and offered a big coupon with more upside

Craig Phillips was aware of it and agreed with it under Mnuchin in Treasury. IIRC Ackman's thesis is that the commons increase when conservatorship ending is announced, which means less dilution, which means a higher share price, which means less dilution, which means a higher share price...

Yes, you're right but they're never going to pay it back so the only way to get rid of it to raise capital is to convert or re-term, so to me essentially it is capital due to the anticipated end state. Mnuchin agreed to allow each co. to raise $70b through SPO to pay off the liquidation pref I believe, I cannot see how anyone would ever provide any capital to give it straight to the government. This whole thing comes down to what's more practical and to me, conversion of SPSA seems unnecessary and overly punitive but it doesn't mean others see it that way. I also cannot shake Bill Ackman being in the commons. I certainly see prefs as the safer option that they are but I just wonder how he could be that wrong, compared to someone like me....

Held Prefs and commons for years and over time switched mainly to Prefs due to dilution risk. Considering upping my commons with a Pref hedge. Minds are probably made up at this point as to what you think will happen, I'm not trying to convince anyone of anything perhaps just to state where I see the wind blowing. A review of key points as I recall them (jump in if any of this is inaccurate): Trump has written explicitly that he would have privatized the companies had it not been for his inability to replace the head of the FHFA The 10% moment has been crossed, maybe even higher now. Prior to the net worth sweep terms, the government has been repaid Shareholders have won the fair dealing court case To raise capital all significant litigation must be over Marc Calabria has stated that Treasury lawyers think the government must somehow be compensated for the liquidation preference and a cramdown would be necessary The companies are accruing net worth following Mnuchin's amendments Republicans have the House and Senate Rumours are swirling to end the conservatorships in 100 days Larry Kudlow may have bowed out of Tres.Sec position due to 'complex investments' With Trump's second term and the letter, I would be comfortable saying I believe recap and release probability is greater than 50%. The 10% moment along with the winning court case can give legitimate cover to amending the SPSA, especially with the added sweetener of $150b from the warrants. Re-terming the SPSA to the 10% moment would end significant litigation. Marc Calabria's comment regarding Treasury lawyers potential need for a cram down is redundant if the SPSA is deemed paid off with an amendment. The permission to accrue net worth is a 'bright line' between the 10% moment and the net worth sweep. With the Republican sweep there is no better time to go through with recap and release and lock in any reforms they wish to make. The 100 day rumours are just rumours but the noise is promising. Larry Kudlow bowing out due to investments is a good sign he would have a conflict of interest in any recap and release proceeding so cannot be involved, assuming he is not willing or cannot transfer the assets to a blind trust. Current opinion is that; Recap and Release happens SPSA is amended and deemed paid off, possibility of the excess going back to the companies Capital Rule amended to be more realistic and also lower G-Fees Warrants are exercised Capital Raises (maybe) This leaves the common valuation. As a starting point, the $150b number is thrown around a lot, maybe I've seen higher, but this is a reasonable starting point. If the only government dilution is the warrants as the SPSA is paid off, with 9b shares outstanding between the two this leaves a share price of $20.83 when the government sells and exits. interestingly, the combined companies net worth is currently c.$146b, not far from the $150b which would be exceeded next quarter and any sale at that amount could easily be achieved as is represents the book value of the businesses, no flowery valuations needed. For capital requirements, if you consider 2.5% of held mortgage assets as the requirement that puts capital requirement at $197b. Taking off the $146b that leaves $51b to find. With another year's earnings of c.$11.5b for Freddie and $17.25b for Fannie, with a capital raise of $22.25b this is done in 12 months. I would argue $22.25b is very achievable. Raising $22.5b at $12 a share dilutes by 1.875b shares. Going back to the $150b sale value and including the dilution you end up with a market cap of $226b or $20.78 per share for the combined companies. What are everyone's thoughts, please? I am an armchair investor. I am considering upping my common long with a pref hedge. This is not financial advice .

Setting the politics of Toomey's tweet aside, it's good to see a call to end the conservatorship. I'm sure I've heard similar from Congress before and let's be honest, what can they actually do to force the regulator / treasury to do it?

It's total nonsense. The twins are now just political tools now.

Anyone expecting the capital plans to be filled with an 8k? Pretty material but not sure it'll be public till earnings?

https://podcasts.apple.com/us/podcast/banking-with-interest/id1506774121?i=1000561763860 Such a mess.

Will the lamberth trial be televised?

I'm really sceptical on this 'investment' now although I'm still holding. The govt wanted them gone/policy tools and even if the nws is reversed or they're allowed to 'leave conservatorship' they've deliberately made the capital requirement so high they're uneconomical. There are no honest actors involved in the regulation as if there were, CRTs would be gone and capital required would be lowered. With homes being bought up by investment Co's and Obama wanting a policy of Americans being "well housed" home ownership doesn't seem like a desired outcome. The status quo could be maintained for however long its desired. A possible incentive is the warrants and up to $100b but with the national debt as high as it is ($100b is next to nothing by comparison) and no one acting to realise it, I just don't think they care about the money.

Anyone have any guess to when Collins en banc opinion?

Also, take a look at etherisc (DIP). Decentralised insurance platform. Flight delay insurance live. Hurricane insurance product soon. Again yield on token can give you a valuation in time.

I made a low effort thread on link way back. Thesis was basically that I don't know which currency wins but smart contracts need data and this project is basically first mover institution coin miles ahead of any competitor. In other words, if chainlink can't do it no one can. Haven't read much of this thread but have you seen Eric schmidt now advising? Link will be easy to value once the yield on the token is known.

That was a total waste of time, Thompson will do nothing.

'Defer to Congress' When? You've had 13 years.