COBFInfinity

The only part of this bet I care about is that the loser also gets something valuable.

right. Ackerman is too much of a tool not to be used as a tool by C/Mn. the collins reply brief was due 11/23, filed 11/19. you almost never see an early filing. https://www.supremecourt.gov/DocketPDF/19/19-422/161278/20201119155421721_11-19-20%20Collins%20Merits%20Reply.pdf The article was certainly a trial ballon. This has been telegraphed for essentially years now so not sure why the MBS market would be suprised by this. I dont have access to an instrument to tell by pricing or otherwise if they were or will be "surpised" but I doubt that to be the case. Apparently Sherrod Brown has come out and said he thinks Mnuchin is the worst Treasury Secretary of all time so he wont lose any friends there by doing the PSPA. Calabria has said that the lawsuits go away with the 4 PSPA and with the timing here that very likely maybe the case. For optics there may not be a "settlement" as much as plaintiffs drop the case no? It would be in their best interest depending what's in the 4th PSPA to preserve Calabria for as long as possible and let his removal play out through the legal system. Someone please tell me if Im off on this but once there is a 4th PSPA within 30 days FHFA should request recap plan. FnF then have 45 days to respond and in turn FHFA has 60 days to approve. So we are looking out no further then 4.5 months from the PSPA amendment to know the final fate of the Jr Preferred. Hopefully sooner as one has to imagine JPM and MS have been sitting on plans for months and just tweaked it Wednesday night. Worst case by middle of Q2 2021 we should finally know our fate. there may very well be some kabuki theater with this process, no settlement (for optics) but T going to scotus and saying collins is moot because 4th A...and if it is to be moot, Ps need to get everything they are asking for...or maybe there is some backchanneling so that Ps will agree case is moot if 4th A does X, but there won't be a formal settlement agreement with Ps. once a 4thA is agreed to by fhfa and T, then yes fhfa can immediately ask for CRPs, which can be a part of a consent decree. If the SCOTUS case is not ended, one way or the other, and it is decided that the 3rd amendment needs to be overturned, can someone hostile to GSE recap come along and use the exact same legal arguments to overturn a 4th amendment?

Market seems it has given up on this trade. Its the only explanation I see to pfds trading significaly below 2019 highs. It will be a slow recognizion Simply put, the junior preferred isn't worth much unless the senior preferred is written down. We've been led to believe that will happen, but until it does the JPS probably won't go much higher. But if the senior preferred is written down, I think Mr. Market's recognition will be very rapid.

Current feelings: https://memepedia.ru/wp-content/uploads/2019/06/dont-give-me-hope-meme-3-768x409.jpg

Good find. But of course, history of delays implies it will still be next quarter!

They may have sources, but they interpret everything in the most anti-GSE way they can.

Gasparino saying the same thing. The curious thing is that there was below average volume and no real price action based on the resignation news today. So smarter money than me appears to have been unaffected by this. But as I said yesterday, the smart money already has the preferreds at 27% of par, so they already weren't believers in an imminent recap.

Yeah, he is reading a lot into it considering that no reason for the resignation was given.

Kind of sad that Coronavirus should only be discussed in Politics section.

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.

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.

So your view is that everything Calabria has said and done has been a headfake? To what end? If he didn't want to end the conservatorships, he could be doing a lot less. And I guess I could imagine a scenario where Calabria is just wasting everyone's time within the FHFA making busywork capital rules, etc., but where your view doesn't seem to make sense is that JPMorgan and Morgan Stanley were hired as investment banks. That step did NOT need to happen if this is all just a big game and the investment bankers are certainly smart enough to have sniffed out if this was all a hoax. Also, the GSE CEOs seem to believe that Calabria has a real plan.

Tim Howard's goals are not the same as the rest of us here, so I'm not particularly interested in what he would LIKE to happen. I understand that it may happen.

I don't know who MTH is, but he/she is counting on SCOTUS a lot more than I am. I would much rather have a decent settlement now than shoot for the moon with SCOTUS and risk coming away with nothing.

When you talk of settlement, are you just talking of Collins plaintiffs or are we still looking at a global settlement which was the expectation all along? Is it realistic to get a global settlement before December 9 just based on how many parties are involved and the time needed to hammer that, not even accounting for the possibility that some plaintiffs might be willing to gamble on the courts at this point?

The problem with that idea is that Mr. Market will probably reduce your position for you before you get a chance.

As a reminder, it's best to keep your political opinions out of this discussion. With people on the right and left both claiming 100% certainty about their team winning - guess what? Someone is wrong. The rest of us in the real world know that there is uncertainty as to what happens. With the GSE's, it obviously does matter who wins POTUS and it makes sense to consider the different paths the GSE's will take based on that fork in the road. But it is not helpful for people to chime in with, "Well, I know Mr. XYZ is going to win", implying that we should not factor any uncertainty into this investment.

I assume they have changed their minds since then, but no more than a month ago ACG Analytics had been predicting the capital rule would be finalized before the election. So yet another delay. The idea that if Trump loses, Treasury and FHFA are going to settle the lawsuits before SCOTUS hearing and wrap everything up in our favor with PSPA amendment and consent decree by mid-January looks less and less likely. Theoretically, it can be done, but the reality is nothing has been achieved in a timely manner throughout this process. I've been in the junior preferreds for 6 years and I'm not going to throw in the towel now when they are still at 30% of par, but I have to admit I'm as worried about the outcome now than I have been at any other time. With all the steps that Calabria has made in the right direction, nothing of any permanence has truly been accomplished. If the NWS hasn't been written down by early December and the case goes to SCOTUS, there is a real possibility that we come out of this with nothing.

Charles De Vaulx Fund Raises $1.7B! created on: August 27, 2009, So you re-started an 11-year old, 1-comment discussion instead of starting a new one? Bad etiquette. Creates confusion.

Is this thread wrong? It sounds like Charles de Lardemelle is the one with the new fund, not de Vaulx.

That obviously depends on when you bought and at what price. There are people who bought in mid-2014, before Lamberth's terrible decision, that are still losing money. There are those, like me, who bought a few months later at 1/3 the price and are doing just fine. Alas, I added last September after the en banc decision and those shares are down about 30%. Always need to look forward, though, so the issue is not what your performance has been, but what you think it will be. It sure seems that Calabria wants to end the conservatorships, but it would appear that until the NWS is officially ended, Mr. Market no longer has much confidence in this story. Can't blame anyone who has lost faith after the many delays and inability to get final justice from the courts.

Bloomberg link doesn't work. What is the fund?

I really don't understand why someone would choose FNMAP or the other low variable rate issues at this point. FNMAP's coupon, if turned on, would be 0.06% right now! You can buy a wide variety of Fannie and Freddie preferreds with coupons of at least 4.5% for a similar price as FNMAP. Until recently, there was at least a noticeable discount for those low coupon issues, but that's mostly gone right now. It would clearly be counterproductive in the long run for these preferred issues to be converted to common at anything close to par. I guess we'll eventually see whether the urgency to meet the capital requirements outweighs what is favorable for long-term company finances.