merkhet

I wrote to Berkshire, and I was informed that the letter comes out on the 28th.

I liked this book as well.

This is a big deal. This is the first time that someone with Gretchen Morgensen's clout has jumped on board with this story. Should be interesting moving forward.

Ackman had some comments on Fannie & Freddie at the Harbor Investment Conference. http://www.valuewalk.com/2015/02/bill-ackman-harbor-conference/

You had to sign in last year, but you needn't prove you were a shareholder.

You've hit the nail on the head. The question is whether the amounts paid to Treasury must be classified as a totally kosher Net Worth Sweep of 100% of the profits. If not, then the question is whether they count as a repayment of principal -- and there's no specific provision in any of the documents that outlines exactly how that occurs. And if they don't count as a repayment of principal... what do they count as?

It's March 25, 2015 @ 10am. Best, Rob

+1

To make CNBC look good. And that's a pretty amazing feat.

Ah, I misread your comments to seem as if Klarman's lack of innovation was somehow a failing. My bad.

I seem to be butting heads against you today. First on the Berkowitz thread and again here. :) I'd ask the question of whether being an innovator is a necessarily a goal worth having. I mean, if you can follow the Buffett playbook to a tee and be very successful, is there something inherently wrong with that? I'm thinking back to something Pabrai mentioned years ago about people having some intrinsic bias against copying other people's innovations -- as if that was something bad or to be looked down upon. (I think it came with a story about competing gas station attendants.) Alternatively, I rather enjoyed the story about how Burger King didn't have a real estate division -- it just built next to McDonalds. :P

I'm a little fuzzy on this one as well, but as I recall, the Goodhaven guys left because Berkowitz was always going to be the one making the decisions -- might have been the same thing with Fernandez. Meaning, there was never going to be three co-CIOs or two co-CIOs. There's some difference between knowing you're never going to be the BSD at the top and leaving because you weren't being listened to...

Bridgewater once operated under that standard, but now that Dalio has seeded control to his #2, that no longer seems to be the case. I have the utmost respect for Berkowitz since he's brought a number of things to my attention over the years through his 13-Fs, but I recall David Einhorn saying that he reached out to Berkowitz in order to give him the short thesis on St. Joe, but he never heard back. (That said, I don't know how to corroborate whether that was true at the time and/or whether Berkowitz eventually called him back.)

The administrative reforms I think the GOP dislikes are the parts that help poor people. That's what the Democrats don't want reversed.

Not dumb at all. Most people don't have any legal training or experience, so it's sort of like trying to guess into a void. It can theoretically stretch on for a very long time. There are cases against the government that go on for twenty years. The issue with this case is that it will be difficult to keep the status quo going without, in my opinion, harming the housing market. There are practical/economic concerns that would tend to suggest that this is not a stable arrangement. So, my current ongoing theory is that this administration would be reticent to hand the GSEs over to a Republican administration which could un-do the administrative reforms Watt has put in by firing Watt and putting their own FHFA administrator/conservator into the role. That's my best guess. I think, however, that litigation will have cleared it all up before then. And I've gone a while now without putting up my usual disclaimer, which is that this is coming from the same person who figured that the Lamberth opinion would have broken the other way. So take that for what it's worth. :)

what does this mean in english? Seems like the Judge dismissed it because Continental Western is a subsidiary of Berkley Regional Insurance co., which was one of the Plaintiffs in the District Court case that was dismissed last Fall. I think the Judge is saying they are the same entities for all intents and purposes, therefore they can't have two cases in two different courts with identical complaints. Merkhet would probably be able to give a more eloquent answer. You explained it well. My eloquent answer was that the judge in Iowa dismissed the case. :) notorious, what explanation are you looking for here? (1) Is it a question as to whether dismissed is a term of art that means something different in legal terms versus colloquial usage? (2) Is it a question of why the judge dismissed the case in the Iowa courts? (3) Is it a question of what this means for the remaining cases? (4) Is it a question of what this means for the investment thesis?

Judge in Iowa dismissed the case. 254581989-Fannie.pdf

I think a lot of people are fighting the last war and just assuming that a large asset price dislocation will lead to an '08/'09 redux.

Plaintiffs can challenge the privilege before Sweeney, and I'm assuming that they will.

Looks like Berkowitz added to the preferreds and the commons after the Lamberth decision.

Presumably, you're running smaller amounts of money, so you can be more nimble than Berkowitz and fish in smaller bodies of water. Plus, he has to deal with daily redemptions and you don't. You have significant advantages over him in those regards.

A funny side note. At one point, the Government lawyers objected to the fact that Plaintiffs had requested discovery from the GSEs and wanted to depose the CEOs. Sweeney's response was to say "Hold on. I don't understand. Why are you objecting on their behalf? They have lawyers. If they wanted to object, they should object. Your entire case is premised on the fact that this case should be dismissed because FHFA is not the government once it steps into the role of conservator. So why is Justice objecting on behalf of a private entity?" Hilarious.

Ah, I assumed he just ignored base metals and was talking about energy companies.

He said that for smaller mining companies, it's like there's a promoter sitting atop an empty hole. Where'd you see the "not cheap enough" answer?

Interesting status conference today. (1) I'm sure no one on this board is calling the judge's chambers, but apparently, other people/shareholders have been doing so, and it's starting to piss her off. She's not allowed to have communications with anyone other than counsel for the parties. (2) She's probably going to grant the government's request to extend the discovery period for no more than four months. (She was very emphatic about this being the upper bound.) So, we're probably looking at discovery ending around July 27th, 2015. (3) She's already decided to deny the government's motion for a stay. The order should be coming out soon.