COBFInfinity

Well, we don't actually know Bessent's views and I think he's more important.

Whalen has entrenched views, as do many others. It just shows how critical it is that Treasury Secretary and FHFA Director are either a) entrenched in favor of ending the conservatorship or b) at least pragmatic enough to review all options. For example, Calabria supported ended the conservatorships, but his entrenched belief that the GSEs massive writedowns post-conservatorship were legitimate only served to help keep them in conservatorship due to excessive capital requirements. Having said that, I think wild price swings are to be expected regardless of whatever early posturing the new Admin takes. That, of course, is nothing new for these securities.

As far as I know, no one at Treasury has ever given validity to the 10% moment, so I think it's meaningless. SCOTUS gave it's stamp of approval to the Net Worth Sweep, so Treasury gets all the earnings and there is no cap on rate of return. And since Treasury gets all the earnings ON TOP OF an outright 80% warrant, my cautious view is that Treasury should be assumed to get about 100% of the common stock, prior to an offer to convert JPS to common at around par value. Mr. Market clearly sees it differently, because the common shares are trading above $0.01. But for my taste, the common is untouchable.

The SPS + warrants for 80% of common means the Treasury already controls 100% of the common value. So while preferred stocks have some contractual rights protecting them, you have to come up with some sort of compelling argument why Treasury would be willing to share any material value with existing common shareholders.

I'm well aware of the current risks. What you said is, "Wait until all the restructuring risk is gone and then buy." At that point it's just another stock, with all the uncertainty removed, so there's no longer an expectation of above-market returns.

No, this is different than the question of whether they WILL be released, and on what terms. But if they are eventually released and you wait until after that has occurred to buy, the market prices will be pretty fairly valued before you get there.

Huh? If you wait until release, you will quite obviously be too late to get any material gains.

I opened the link and saw the message and formatting and was like, "Is Whitney Tilson the new Porter Stansberry or something? I'm not even going to bother starting that video." I decided to just scan the page for a few seconds before closing it and...I see it IS a Stansberry production! LOL. OMG, how embarrassing for Tilson.

Wait...18-19% of par? Did I miss something? I thought there was one case with damages and it was like 1-2% of par.

Speaking of the past year, Fairholme Funds has liquidated almost all of its already greatly reduced GSE preferred position (maybe all of it since the May 31, 2024 holdings show just a sliver left over.) One of the great believers has finally thrown in the towel.

I don't know that we can claim Calabria was "well meaning" considering his ongoing motivation to claim that the GSEs lost massive amounts of money in 2008, and he now throws in 2020 for good measure. He may have had an interest in privatizing the companies, but his ideologically driven inaccuracies didn't make it easy.

Not only is it illiquid in that a large portion of investors can't buy it at all, you also have no visibility of the bid/ask - but you can assume the spread is wide. So if you plan to buy this - again, assuming you even have an account that will allow you to - you had better plan to hold onto it for a while. P.S. Your "math question" was valid.

Yeah, there are potentially 2 ways to buy it: You are authorized to trade in the Expert Market because you are a market maker or something like that, or a brokerage firm is allowing you to buy it through them. I used to inquire if there was some way for an individual to get access to the expert market on their own, but no one seemed to know the answer, so I let it go.

Where are you buying it? Are you allowed to buy on the Expert Market?

How big is the jury? How many of them need to agree for a decision?

Just more self-serving B.S. He acts like his absurd capital levels have nothing to do with the GSEs staying in conservatorship. And now he's talking again about how the GSEs were looted, a view which he choose not to mention or use to forward his agenda during his leadership at FHFA.

Any logic for why RSX is trading at a 40% premium to NAV?

Thompson was asked about timeline for end of conservatorships. She said she'd defer to Congress on that, but that many other parties would be involved. I don't know if she's just appeasing the audience, but that's a pretty lame answer for someone who has worked at FHFA for 8 years.

I know some are excited about the actual legal relevance of this, but I'm not sure it's worth much. Is a court really going to just accept this after-the-fact declaration without depositions of many of the relevant players? Ultimately, we know that Treasury punted, not FHFA. So is Mnuchin going to provide testimony that he really would have agreed to end the conservatorships if he had more time, even though he did actually have the chance to set them on that path at the end of his term and he chose not to? Seems pretty weak. Separately, is there going to be an inquiry as to how many shares of GSE securities Trump & friends accumulated before this letter was written?

Believe it or not, I have a net profit on GSEs right now. Not a good IRR, but life goes on. And yes, I'm a complete nobody. But you're on a value investing forum promoting chasing the past performance of someone who legitimately believes every conspiracy theory that your uncle shares on Facebook. Do you know how many crypto bros have gotten way richer than Kuppy that I "obviously" should have listened to based on a few good trades? As others have pointed out, Kuppy has blown up a few times already in the past and I don't know if he was deranged back then or if it is a more recent issue. Anyway, I've made my point. Good luck.

Gregmal, I am going to upgrade your hero from politically motivated idiot to mentally unstable. I guess your logic is he had some good trades, so just assume he'll have some more. My logic says don't trust the stock picks of someone who lives in a fantasy world.

FHFA Acting Director says they will continue to build capital. I guess that's better than the opposite, but the current capital plan is still a dead end. https://www.marketscreener.com/news/latest/Prepared-Remarks-of-Sandra-L-Thompson-Acting-Director-FHFA-at-the-2021-Mortgage-Ban---36710840/

I'm not disputing that it sure seems like GSEs can be treated however the hell any POTUS wants, but securities laws would require any open market purchase program or tender to be announced in advance. Which means the prices wouldn't stay anywhere near 6% of par after such an announcement. All that said, I don't think financial engineering to maximize equity value is part of the plan here.

You were asking if they might be currently doing it. I said no. Now you're saying they could do it in the future. Those are completely different things. Treasury has not given approval.

They aren't even allowed to pay dividends, so of course they can't buy the securities. And especially without public notice.