colinwalt
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Posts posted by colinwalt
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Actually, the way it works is that Fairfax pays a fee...usually Libor plus a negotiated rate. As Fairfax trades higher, the counterparty pays the difference between the strike price and market price. At the end of the swap time period, Fairfax gets the counterparty payments minus the Libor plus negotiated rate. It's not a buyback, but they benefit from it as if they bought those shares, paid a fee and reaped the gains. If Fairfax stock falls, then Fairfax pays the difference between the strike price and market price into the swap. Cheers!
So theoretically, they can go out, borrow a bunch of money, do a massive buy-back, share price spikes and the counterparty has to pay them a small fortune ....
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Thank you for sharing, nickenumbers
+1
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@sculpin - Thanks!
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FWIW, Trump seems to like Sweeney.
http://uscfc.uscourts.gov/announcements
President Trump designates Margaret M. Sweeney as Chief Judge of the United States Court of Federal Claims.
On July 12, 2018, President Donald J. Trump designated Margaret M. Sweeney as Chief Judge of the United States Court of Federal Claims.
For Chief Judge Sweeney’s biography, please click here.
Hmmm.... if I were a cynic I'd be wondering about this... I mean, isn't there some big claim in progress against the government...? but no, no way... a US President as honorable as "The Donald" would never try to influence the outcome, would he?
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@sculpin... Thanks!
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Through it's holding in Union Group, Dundee indirectly owns 16M shares of ICC Labs (ICC-X), a Cannabis producer in Uruguay. I think it's worth watching because ICC has recently moved up from $1 to $1.70 as it seems to be catching the cannabis wave. At the current price it's worth about 50 cents per Dundee share, or roughly 20% of the market cap. I guess a best case scenario would be that ICC shoots up to $5 or so on a take over or continuation of the bubble, and Union Group sells. Dundee's share of that value would be about $1.40 per share, more than half the current market cap, a not inconsiderable amount.
Thanks for noticing that and letting us know
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"now, all one has to hope for is that trump doesnt do something that gets him impeached before then."
How about
"now, all one has to hope for is that trump doesnt do hasn't already done something that gets him impeached before then."
8)
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How do you guys defined good businessman - according some analysis around, Trump investing the money from his dad in the S&P would've made him a richer man than all of his very successful businesses .... ?
Except, I think that "Most sober, clear eyes businessmen" is stretching things just a bit where Trump is concerned... no?
Agree to disagree on this one?
Sorry to disappoint, not going down this OT rabbit hole :-)
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Except, I think that "Most sober, clear eyes businessmen" is stretching things just a bit where Trump is concerned... no?
Agree to disagree on this one?
Agreed :-)
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Except, I think that "Most sober, clear eyes businessmen" is stretching things just a bit where Trump is concerned... no?
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Not sure if this was linked previously, apologies if it's a duplicate...
Robinson 11-Feb-16 Response to motion to dismiss, originally filed under seal, now unsealed... really (IMO - not a lawyer) covers everything...
http://gselinks.com/Court_Filings/Robinson/15-00109-0030.pdf
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i tried to ask a question but unfortunately they didn't get to me. It's too bad--those questions were pretty bad--it was such a good opportunity to dig in, but instead we got either softballs or questions that are unanswerable.
They did not get to my question, which was, notwithstanding the fact that the newly released documents and the mcfarlane deposition appear to support the narrative that the Treasury expected the GSE's to become profitable, how do we square that with the 10'Qs that were released Aug 8,9 and essentially say that the GSE's do not expect to make any money for the foreseeable future. So how do we avoid Judge Ginsburg's characterization that there were competing views at the time?
Sucks. Would have been a good Q.
Is there a way to ask in a follow-up email?
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Here's a link to a pdf of the latest unsealed docs:
https://assets.documentcloud.org/documents/2839971/Fannie-Mae-and-Freddie-Mac-Unsealed.pdf
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I guess we'll have to wait and see - from the earnings release: "Remaining weighted average life of 6.3 years"
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Lol at "being hedged". There is a time to admit your mistake and I think it has come (a while ago). Remember by the end of 2009 when BV was $370? It's 10% more now plus six dividends. Well at least it's not negative. But to get to that expected 15% return (he actually said it again in the last letter), he'd need almost 40% annually in the next 4 years to be on track over a 10 year rolling period. They didn't even get that between '06-'10 when they hit the jackpot!
I wish him the best of luck. I'm just not sure he's going to get there again without "any" investment risk.
I'm not going to predict 15% or not, but I think it's too early to say he's wrong about deflation, there has been and continues to be so much QE that I think the world is swimming in overcapacity - that's most likely going lead to deflation - no matter how hard the central banks try, they're pushing on a string...
I believe the policy situation worldwide (since the 2000 bubble) is akin to trying to stop wildfires, eventually you fail and you end up with the "mother" of all wildfires...
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What are everyone's thoughts on the issues raised in this article?
4623 lead to an action taken by the regulator. The nws was a conservateur's action. Possibly, very different things. What is being challenged is the action of the latter. I may be wrong on this.
There's also this:
“It’s hard for me to envision that we would be able to make enough every single quarter to cover the dividend payment,” said Ms. McFarland.
I supppose the response to this is that there's the PIK provision...
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Also, the quality of commentary from merkhet and you cherzeca is outstanding and I believe that keeps us all as reasonably informed as can be expected. Appreciated!
+1
I'm incredibly grateful that cherzeca accepted my nudging to join COB&F so we could all benefit from his insight.
Merkhet has been an incredibly valuable member of this thread for as long as I can remember.
+1
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author states: "There are some pitfalls, though. For one, current investors in Fannie and Freddie, many of whom have mounted vigorous legal challenges to the government sweeps, would probably be out of luck"
obviously she doesnt understand that if NWS invalidated, govt will have to buy shareholders out...which is why this plan will go nowhere. govt only wanted to set stage for reform by paying zip to public shareholders through NWS. when govt goes to plan B, i dont think it will want to pay the price...especially to greedy hedge funds (like you and me...ha!)
Yep thats what I was thinking.
Timothy Howard doesn't think much of it....
http://howardonmortgagefinance.com/2016/03/25/a-risk-sharing-postscript/
"We just now are crawling out from under the ruins of our last experiment with securitized risk sharing—the collateralized debt obligations (CDOs) that were supposed to be the answer for how to finance the riskier tranches of private-label securities (PLS)—and already we see a proposal to give a variation on that theme another try."
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Which is more speculation. :)
In any case, my edit to the above post then becomes relevant. Let's play it through.
What does a valid NWS world look like? Let's say that they try to excise the assets from Fannie & Freddie. How do you do that? Do you spin off the new common stock to the government preferred shareholders? That would seem to require another amendment because the government preferred shareholders have access to cash flow and not the residual ownership of the corporations. How do you even structure a spinoff that flows through to preferred shareholders? (These aren't just rhetorical. I can't think of an instance of seeing this, and I literally do not know.)
And then that brings up a completely new question for litigation. Assume the NWS is valid. Excise the assets of the GSEs. Doesn't this bring up a new question of whether this is now a de facto liquidation that occurred without the benefit of various protections afforded to people in the various capital structures that happen during an actual receivership?
And assuming this doesn't get resolved before the next Admin takes over - why would the next Admin want to fight to the death in the hope that they win and then end up having to deal with this sh*t?
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BTW, Bruce can blow up even if he wins litigation eventually. All that needs to happen is continued redemptions from his funds because of bad performance. Assume that litigation win comes in 5 years (yeah, I know people suggested that things will resolve faster - do you legal types have a litigation maturity graph? what's the best/median/worst case?). If FAIRX continues underperforming for couple more years, he can lose enough capital to need to sell FNMA positions into weak market. That's one of the reasons I think his position is crazy.
Anyway, I should shut up. Yo.
On the other hand he has a large cash position after selling AIG - maybe it won't be enough, but it seems to me that there's a large margin of safety there.
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Somebody asked if Bruce was crazy to put 16% into this. OK, I will answer without resorting to Eminem: IMO, he is crazy. That's somewhat based on his other positions too, BTW.
The counterargument to the "Bruce knows sh17, so he increases position" is "Bruce is blinded by his positions and biases and so he increases position". I'm in the second camp, but I don't give a crap about Bruce, his motivation, his performance and his fund, so I'm not gonna argue about it here.
You can do anything you set your mind to, man
Yo
Brings to mind all those people who thought Bill Miller walked on water... until... it all blew up...
(BTW: I asked the "is he crazy for the > 16% position" + said I didn't think so, but I often don't have a clue about this stuff)
FNMA and FMCC preferreds. In search of the elusive 10 bagger.
in General Discussion
Posted
https://howardonmortgagefinance.com/2021/06/28/an-unexpected-ruling/