Mephistopheles

Are you referring to them banning cnn and nyt from the "gaggle"? Yep, quite scary

Yep, a concern I've raised repeatedly. I feel this possibility doesn't get discussed enough. Maybe better to sell some and buy Fairholme (and short Sears and Joe, lol)?

No position but in agreement with this. It starts getting speculative when you have to read between the lines and analyze tones. If Trump had not won (a seemingly improbable event), I can't imagine these securities would be trading anywhere near current market prices. I think a lot of the parsing is based on the narrative post-Mnuchin comments in November of last year. That's just what people choose to focus on. And, surprisingly, people (including on this board) seem to be ignoring the fact that the breach of implied covenant (dividends) and the breach of contract & implied covenant (liquidation preference) case gets to move on in district court -- something all three judges agreed on -- though that may be a function of ownership considerations (common vs. preferred). At least for me, I have very little faith in Lamberth given our previous experience. It's also largely because I'm not a lawyer, but based on my elementary reading, it just didn't seem like he gave a shit. So I take the DC case as a free call option, but I have higher hopes for Sweeney (again based on my amateur reading of the cases).

Trying to summarize everything with a 10,000 ft view: 1) Mnuchin once again expressed that conservatorship is not the answer. Together with previous comments that a) he doesn't want taxpayers at risk and b) he wants to preserve the 30 year mortgage, it's obvious that he wants privately owned solution. 2) So the question is, will he do this by a) bringing in new capital and screwing over current shareholders, or b) by returning the companies to their current shareholders? -IMO (a) is much harder, because he'd have to deal with the existing shareholders simultaneously. And how exactly would this work? Would he have to wind them down first, and then sponsor new companies, bring in new private capital? Is there any reasonable way for them to transfer the assets and obligations of FNMA/FMCC to a new private sector company with new shareholder capital? I'm not an expert here but I feel it would a total mess while also having to deal with the legal battles. And let's not forget that the clock is winding down and these companies will need a new Treasury draw at any moment. -(b) is the more practical solution. Yes it rewards hedge funds, but it's the quickest solution. Put an end to the legal battles, NWS, recap, privatize, not have to worry about future capital shortfalls. He has expressed several times that he wants the quickest possible solution. Not only does he want it, but it's better politically given the almost zero equity left, as well as the lawsuits. And this also brings in huge warrant profits for Trump to spend - wind down doesn't do that. He could of course recap them and make them public utilities and have the Govt reap the profits year after year, but that wouldn't be consistent with 1) not putting taxpayers at risk, 2) taking the huge political and financial windfall from the warrants. I think Trump would rather have 79.9% of the equity minus jr. preferred up front rather than have 100% of the net income for 4 (ok maybe 8 ) years.

Mnuchin on CNBC: -Says they've assembled a team at Treasury to work on F&F -Spoke with Mel Watt and Hensarling about a solution -Says the companies have been in this state for too long -Won't happen before tax reform, which they're aiming for before August recess -Reiterated want for bipartisan solution

Cooper: "We are continuing to evaluate the implications of yesterday’s decision, but at a minimum, it certainly strengthens our conviction that the Net Worth Sweep amounted to a taking of property in violation of the Fifth Amendment." Sounds great but they could also be talking their book. Do you really expect them to come out and say the opposite? haha

Interesting that the common is up 10% today yet the prefs continue to go down. Short covering?

They should have just bought BRK as a cash substitute lol

Florida Man Tried to Blow Up Target Stores to Hurt the Company's Stock Wow, Eddie Lampert really needs to stay away from retail

Too many Buffett disciples charge way too much. Even the oft-touted Ruane, Cunniff & Goldfarb (Sequoia Fund) ... 1%+ for essentially a large cap fund. Why not 0.50%....? Yes! On second thought, why not do it for free? Maybe they can sell ads on the investor letters and sponsor the annual meeting. Lol +1 Meanwhile Buffett's fees were huge as a % of assets (well deserved).

He doesn't do either of these for the same reason, as pointed out by oddball - marketing and brand value

I and several others talked about this last year - instead of having Wall Street equity analysts, why not a panel of value oriented hedge fund managers? I think Pabrai, Tilson, or even someone like Ackman would be happy to sit on a panel. I don't why this hasn't happened yet as I think it's a win win for everyone (except the equity analysts!). I think I'm going to write Buffett a letter suggesting this format.

Are you saying that it's zero chance only because some cases are class action, or because of other reasons too? Curious to know your thinking. In regards to the class action case, couldn't greenmail still be possible if: a) plaintiffs drop all charges in the class action, b) agree to a completely separate deal with Treasury? So it wouldn't be a settlement as part of the case rather its own separate deal.

I think the GOP bends to Trump on this one, just like they have on free trade almost overnight. Bigger risk, at least imo, is some sort of shady deal that benefits Trump's friends at the expense of the rest of us. That's what's keeping me from going all in.

So this assumes that the warrants are reversed or the strike price goes up to $10 minimum. Bold predictions imo, but nice spreadsheet. Hadn't seen this, but I like the basis. I just don't see where such an adj. on warrants is such a far out idea. We know they're going to be adjusted in order to be able to raise capital and as a likely part of settlement. Doesn't Trump/Mnuchin desire to achieve overall larger goals outweigh the idea that they choose massive dilution as the answer? Well they can always raise some additional capital on top and also convert the junior prefs...and allow a retained earnings buildup as well. Based on their ideas regarding financial regulation, I wouldn't be surprised if all they do is retained earnings + reverse the 10% dividend back to 2012 (include excess dividends as Sr pref repayments). That should allow a minimum amount of capital while still maximizing the value of the warrants at $0 strike. Imo they will keep the strike at $0 as that not only makes a great political headline but helps fund his infrastructure ambitions.

So this assumes that the warrants are reversed or the strike price goes up to $10 minimum. Bold predictions imo, but nice spreadsheet.

my biggest concern is lamberth II. you never know. im actually hoping mnuchin settles with Ps before dc court rules on the appeal If that's your concnern, even if they rule on appeal, he can still settle any of the other cases and Ps ultimately make out great

+1 +1 Also, I know he's Buffett's favorite investor and all, but I believe his returns have sucked for like 10 years or so. Goes to show that pessimism doesn't help so much.

But people are investing now based on potential dilutuon. They would just adjust for the 79.9 when investing

On the other hand lower taxes may spur home buying. First let's figure out whether we can even get our money back :P

Federal Home Loan Mortgage Corp. 50,025,248 7.875%, Series Z (b)(e) $ 410,207,034 5,750,575 5.570%, Series V (b) 37,666,266 2,726,100 6.550%, Series Y (b) 18,128,565 1,614,250 0.680%, Series M (b)(e) 17,837,463 1,308,929 1.340%, Series B (b)(e) 14,332,772 1,119,600 5.100%, Series H (b) 13,961,412 519,142 1.680%, Series L (b)(e) 5,684,605 450,000 5.900%, Series U (b) 3,123,000 437,340 5.660%, Series W (b) 2,777,109 200,000 5.000%, Series F (b) 2,500,000 Does anyone know where the "Series Z, V, etc" designations come from for the Freddie prefs? Unlike for Fannie, I can't find a reference to these letter series names in any of the circulars or 10-k.

Re: dividend yields. I just can't see them turning on the 7-9% dividends given the lack of capital, and esp in this rate environment. Either the prefs will recap the common or all dividends will be put on hold for like 10 years imo.

I have FNMAS, FNMAH, and FMCCL, in that order of current dollar amounts. Of those 3, liquidity is best on FNMAS and discount to par is best on FMCCL. FNMAH is in the middle on both metrics. I haven't bought any shares in the past 10 months, own too much already. I have FMCKJ. This is similar to FNMAS but currently trading less than FNMAS. Did you buy that only because of liquidity or is there another reason as well? Trying to figure out why some are so much more popular than the others (aside from liquidity).

I used to strictly buy based on discount to par - so used to have only FMCCL and a couple other Freddies. Then decided to sell half of them and buy the cheapest FNMA ones on discount to par. Then I started diversifying a bit in case any one class gets fucked or if they restart dividends and the near 0 variable rates get screwed. Also as other posters have mentioned, each class has to vote if there is a recap to common offer, more reason to be diversified. I still can't get myself to pull the trigger on FNMAS and FNMAT, the most expensive ones which as of now are at 40% of par, and seem to be the most popular among everyone. I have FNMAL, FNMAK, FNMAG, FNMAO, FNMAP, FMCCL, FMCCG, FMCCI, FMCCN, FMCCS, FMCCJ.

Do you mean FMCC or FMCCL?? Lol, that's the one preferred they allow? I've bought through fidelity. Ask to be transferred to the fixed income desk and they'll let you buy. I told the guy I was a fund manager (which is true) and they stopped giving me so much shit. Yea, I called again and spoke with a manager and this is the option I got. So I made the trade over the phone and got the online rate. Interesting, did you need to get special approval for this, or were you always able to do it. What tickers did you buy? And what kind of account do you have if you don't mind me asking?