Wiggins

Alive.

Question for Midas or anyone else who has thoughts on this: Can the GSEs issue new stock for a capital raise that is senior to existing JPS? I think existing JPS certificates say no, but the SPS was made possible by HERA. My answer is yes -mainly for the reason that FHFA/Treasury will do whatever the hell they want-, but it could start a whole new round of takings claims. Interested in thoughts on this.

Class certification by Lamberth was underrated. I think this should have been news. There will be a trial in Lamberth's court next year regarding a breach of the implied covenant of good faith and fair dealing with respect to stock liquidation preference and dividend rights. I am getting the popcorn ready. How can there not be damages when the Treasury lied and then "siphoned" $300 billion out of the GSEs? In a case like AIG there was no money, but with the GSEs they have of course been highly profitable. I think Lamberth just may be the one to unwind the Treasury's Orwellian tales of greedy hedge funds awaiting a windfall or the Government "rescuing" the GSEs. Any shares bought today have the same rights as all others.

I'm 100% JPS but thinking about taking a common stake in case there's a ruling or announcement causing preferential accumulation of common vs. JPS. So far I have been piling in to the JPS since they're still so ridiculously depressed (e.g. some are still under 10%), but seriously thinking about a common position.

Nice work! I have been thinking we could be setting up for another move up similar to that seen Dec '18 to Jan '19. I think there was heavy tax loss selling in '18 and then investors got back in with a new basis and there was additionally some optimism over releasing the GSEs at that time. Now, especially after the Drumpf letter my thesis is that Dec '21 to Jan '22 will be a repeat.

How is everyone doing? Did anyone else buy post Jun 23rd SCOTUS?

The verbiage of this letter is breathtaking (e.g. "steal the retirement of hardworking Americans"). Any press is good press. This is good press and will get at least some traction in the courts and in the news. Expect court filings soon

Thanks for sharing these thoughts. I'm glad the arbitrage and/or trading of the prefs is working for you. Please keep us posted. Fannie is trying to buy back CAS notes in a tender: https://www.prnewswire.com/news-releases/fannie-mae-announces-tender-offer-for-any-and-all-of-certain-cas-debt-notes-301424020.html I would like to think now that the infrastructure bill is out of the way that they're trying to clean up the balance sheet in preparation to exit conservatorship, though I'm not counting on it. My plan is to keep holding and hope that Lamberth helps us.

Midas it is good to see you check in! Are you actively trading the prefs? That seems like it could work but would take a lot of time and patience. That's great if it works though.

I started adding significantly to my stake right after the miserable SCOTUS ruling. Glad I did that. I think it's still "oversold" by a lot.

This guy has been pumping a lot lately, has 23K followers and a big stake according to his feed:

Agreed, and for what it's worth which is not much, the interest referred to some sort of standard court interest like 6% and did not refer to dividends.

No one knows for sure, of course, and judges have latitude in what constitutes equitable relief, but I hear some attorneys that are knowledgeable about the case think preferred shareholders are entitled to par value plus interest from the time of the breach, which was the beginning of 2013.

Thank you for revealing your knowledge on this subject.

My original post on it was actually a comment not a question and I wasn't looking for a debate on whether it was actually happening because I don't think it is. But your comment raises an interesting point which is your assertion that the GSEs are constrained from taking certain actions. I view the GSEs as de facto extensions of the Biden administration given the SCOTUS ruling, and view them as very unconstrained given the SCOTUS ruling. I see any action or inaction as more of a willful choice of the administration, rather than lawful constraints. Perhaps I'm wrong about that. But who would stop the administration from doing whatever the hell they want?

Not the same thing. Besides, with Treasury's approval they can basically do anything. If they finally decide to make a move (the Admin, that is), then it would be a smart move.

Not sure where your info comes from... HERA? I know they can't get rid of SPS without Treasury approval.

In the Lamberth case, Plaintiffs and defendants both agree all current stockholders are parties to the case, so Lamberth will likely certify those classes. Perhaps this will give comfort to those wishing to buy. This has been a disappointingly protracted process but I think we can all agree the GSEs are building capital, receivership is in the rear view mirror, and they're here to stay. I feel good about it, just a question of time and timing. On another note, this reminds me a bit of a distressed debt picture where you have shareholders opining that a corporation should buy back corporate debt for pennies on the dollar. That almost never happens (but occasionally does). The GSEs could be buying back preferred shares for pennies on the dollar and retiring them. It would be a smart move but I seriously doubt they're doing it. http://www.glenbradford.com/2021/10/fnma-fanniegate-1080/

Been adding since the SCOTUS decision. It's a steal here.. crazy.

Survival of claims is good. I haven't seen any indication that Biden would do anything and DOJ continues to stupidly fight in court. But the fact the administration had the cojones to get out of a losing war has given me a sliver of hope. The conservatorships are similarly the product of multiple administrations and the way forward really couldn't be clearer particularly with the just published stress tests. They also got an infrastructure bill passed. So maybe they can focus on this.

I listened to the oral argument today and agree with the comment posted by Tim Howard on his blog today. I am not encouraged at all and felt the Judges were trying every stupid argument imaginable to find the exits. Thumbs on the scales of justice. I hope allnatural's analysis is correct, but I could believe anything now. Looking forward to Lamberth

But your analysis is all hindsight as well, including characterizing in retrospect whether we are dealing with a bear or bull market. I think the securities were oversold. Any good news or even neutral news out of Lamberth's court and we'll double from here irrespective of whether the thesis ultimately prevails. My reasoning in the short term is that skittish investors have forgotten there are other trials and/or have just become fatigued but news from Lamberth and/or Schwartz will be a reminder that there are other ongoing trials which have a decent chance. Part of the recent uptick I think was folks saw that some big institutions increased their holdings after SCOTUS. You're on record as saying the bottom is not in. I say we're there and time to load up. We'll see who's correct soon enough.

Thank you it's an excellent resource. I'm not much on technical analysis, but I think a lot of the selling is over. Volume has dropped and prices are beginning to go sideways and/or inch up. I think the next catalyst could be happenings in Lamberth's court, and prices could move accordingly.

thank you this is an excellent resource