Mephistopheles

Looking back at Bruce Berkowitz' interview on CNBC from September where he announced support for Trump, he mentioned that he's making his decision based on those who will be working in his administration including running Treasury. I wonder if Mnuchin was in consideration back then, and if Berkowitz was referring to him, and in regards to FNMA. Clearly Bruce's prediction came true, haha. I'm really looking forward to this being resolved quickly.

What would help though is if they count the excess dividends as repayment of capital, and adjust the 10% accordingly. So if in 2013 they swept $100 billion, and owed only $18.7 as per 10%, then that $81.3 billion extra not only counts as repayment, but then in the next year the 10% counts only for about $100 billion. So the 2014 excess would be anything over $10bn in dividends, and so on. I agree that having to pay $19 billion a year in dividends for all these years leaves nothing for the common, but there is certainly a range of possibilities in retroactive maneuvering.

Not very material for Trump. Ericopoly also used non recourse leverage (warrants/LEAPS) while shorting downside exposure in related competition- neither of which are applicable here. I was being facetious about the 100%. But having said that, I think Trump likes every single penny coming his way, material or not, and he's a total sellout. That's why he does things like appear in wrestling matches and run a scam university.

This hasn't been mentioned enough, but Trump has between $1-5 million invested in each of 3 Paulson funds, lol. Pg 35/92: http://2016election.procon.org/sourcefiles/trump-financial-disclosure-form.pdf I think this may be an Ericopoly, put 100% of your net worth in, type of situation... Edit: I will bet anyone $100 that Paulson has been buying aggressively since the election, probably both prefs and common. I wouldn't be surprised if he's got like 10-20% of his funds in there.

Which scenario? If they deduct the dividends already paid in a settlement, as Fairholme's lawyer suggested

That would be an awful scenario; I still don't get why that makes sense as a settlement.

I think by far the highest risk is a Trump impeachment. Democrats hate him, Republicans love Pence, and Trump is a maniac. If Pence gets in, it's probable that he'll do Hensarling's and Corker's bidding rather than Paulson's. Perry affirmance is also a risk though a smaller one imo.

Just to go back to this. If we are all buying more based on Trump winning - then those who are in the loop must be doing so as well, unless it counts as inside info, which I don't think it does. What are the odds that Paulson/Berkowitz knew Mnuchkin's thoughts before we all found out this morning? Very high imo. Paulson was obviously in on it before even Mnuchkin was appointed, as an economic advisor. In fact I can't imagine them not buying hand over fist since the election.

I think if Trump gave two shits about optics, his cabinet wouldn't look anything like it does now. I would have bet a hell of a lot of money that we wouldn't see another GS guy in Treasury for a generation.

Same reason we assume Paulson still owns it? lol

Are you referring to the position he sold to Icahn? I know he bought back in after that.. but maybe he sold out again ?

Not that I've checked, but it's not likely they appear in any of his filings as they are not 13-F securities. It is for this reason they also do not show on Fairholme's 13F. That's what I thought, but someone mentioned how he's the largest owner of Freddie so I figured it's public. Maybe it's from previous filings? I know Fairholme did away with it but then started showing them again in filings... Paulson is in the preferreds. I was fortunate enough to get a meeting with him back in February 2014. He said that it was the firm's largest position (though I'm unclear whether that's largest within a single fund or across all funds). And I have no idea where you guys are getting the idea that Paulson or Berkowitz have added (common or preferreds) since the election. Is this out there somewhere or is it conjecture? It was just an example. But I mean in general, if you're managing billions of dollars, the common is easier to build/increase a significant position in. I can understand why they preferred the preferreds when their only hope was the Courts, as you've explained in regards to Takings or Contract law. But now they have muscle in the Executive branch, so why not use it to their advantage? Berkowitz definitely owns the common, so I just don't see him screwing that position over. There are 3 classes: senior, junior, common...and I think it's the senior that'll be left holding the bag. Under Obama/Hillary, it might have been the common.

Not that I've checked, but it's not likely they appear in any of his filings as they are not 13-F securities. It is for this reason they also do not show on Fairholme's 13F. That's what I thought, but someone mentioned how he's the largest owner of Freddie so I figured it's public. Maybe it's from previous filings? I know Fairholme did away with it but then started showing them again in filings...

As far as common vs. preferred. The common, being the most liquid, is easiest to build a large position in. While Berk and Paulson own the preferred - assuming they dramatically bumped their position since the election, it must have had to involve the common. Icahn owns the common as well. I highly doubt the solution, whatever it may be, will be terribly dilutive for the common. They will use the excess dividends as a repayment of capital, but may go further by reversing the 10% dividend for all the repayment after it happened, retroactively. So if they repaid $100 billion in 2013; then the dividend thereafter should only be on the remaining $88 billion, and I bet they adjust for that too. The really remote but very lucrative possibility for the common is they do away with the warrants altogether. Point being, rather than benefit the junior preferred at the expense of the common, why not benefit the jr pref AND common at the expense of the senior preferred? That's exactly what I'd want if I were Paulson/Berkowitz/Icahn.

Which set of filings for Paulson shows his position? He has like 20 different reporting companies and the only 13Fs I found don't show the holdings.

He's also used GM in other examples/scenarios, well before T&T even joined/BRK owned GM. I remember an old speech in which he was talking about having a clear one liner understanding of why you own a stock, and he used GM as an example. I recall him talking to students telling them to say to themselves "I bought 100 shares of GM because...". The point was to come up with a back of an envelope reason, not to pitch GM. Buffett is not one to drop hints like that, so I wouldn't read into it. The more likely reason he used GM is because it's a well known American brand. He's made it clear, like when asked about airlines in the very same meeting, that he doesn't talk about current investments. So I really don't think he was trying to send some hidden messages with this GM joke.

It's just a link to the general stock index page on Bloomberg

Decades old joke

He's not taking the offer: http://fortune.com/2016/11/16/jamie-dimon-donald-trump-treasury/

The only way I am aware of PA activity is through 13G filings of individual companies. So SRG for example: https://www.sec.gov/Archives/edgar/data/315090/000119312515399523/d103925dsc13g.htm

Every single one of the positions is listed "4", so it can't be it...

I'm confused. what should be tax exempt? Capital? I'm referring to income taxes which REITs don't have to pay as long as they pay out something like 90% of taxable income as dividends. This applies to GAAP taxable income. Obviously if depreciation > maintenace capex, they generate more free cash than net income; but this wouldn't make a difference as far as whether the REIT is tax exempt or not, correct?

How can you tell it's in his PA?

Here's my question. If they didn't return that excess capital > net income, would that still be tax exempt at the company level? As long as they pay out all of their net income?

I remember Buffett specifically being asked about airlines on CNBC in the last several years given all of the consolidation. He said he still wouldn't invest unless it turns into a duopoly business.