Mephistopheles

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?

Has anyone successfully bought the preferreds through a Fidelity account? My family and I have some accounts there and just tried purchasing preferreds today, and it didn't work. Called up Fidelity and apparently they have blocked ALL FNMA and FMCC preferreds from puchases from ALL clients, regardless of low or high net worth or type of account.... They told me since they don't pay dividends, they are considered too "high risk" and so they won't allow them. Yet they allow the common, and I settled for those. What a stupid policy.

Gary Cohn on CNBC says Mnuchin will make GSE reform one of his early priorities once he gets the job

I think ultimately the common benefit the most, because in order to combat the inevitable political firestorm of benefiting hedge funds, Trump needs to show the people "well look how much money the taxpayer made". People are worried about capital levels and share dilution but the way I look at it is: this Administration and Congress is different than the last, in that they want to roll back Dodd-Frank, loosen capital requirements. And they'll have a similar attitude with F+F, especially since their own interest is at stake. IPO the warrants, and allow capital to build up over many years is the way I see it. Maybe the most they will do is swap the preferred for common.

Liquidation preference at par value + legal provide the "margin of safety" here. Someone hinted at the fact that it's possible the plaintiffs in the major cases negotiate a settlement privately that could screw public shareholders - some on this board mentioned it's not possible but still not sure I can think of every potential scenario within this space. The citi bailout paid par to private preferred shareholders (I know this is different, Fairholme holds the same shares we do), but it just generally scares me a bit. Other than that, only a recap fully financed by only retained earnings seems to hurt the preferred holders (I own ~20% common as a backstop against this) Honestly this is my only real concern. If it wasn't, then I'd be 100% in. Yes it sounds legally impossible, but when has that stopped Trump from doing anything? Besides, if the government can come in and take 100% of a company, what is stopping them from giving that company to their friends? Yes we have the best corporate law in the world, and Delaware is held in high regard, but again, that hasn't stopped the Govt thus far, 4+ years later. The only reason the shares have jumped is because of the Trump-Paulson connection. If HRC was President, we would still be depressed. What gives me hope is that Trump needs that warrant money for all of the Government spending he wants to do, which of course wouldn't be possible unless all shareholders benefit. Having some faith that the Judicial system - Sweeney, Brown, etc wouldn't allow such a deal, helps.

Lol, I thought of that. But then wouldn't the management company have recourse towards the dead person's estate? Like can't they send the estate to collections or potentially sue for the fees?

So basically take a 100% loss on it? Ouch.