FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[Ismael]

DC Circuit Judge Kavanaugh wrote an opinion that the CFPB is unconstitutional because it is an independent agency with a single head.  The FnF Texas lawsuit is claiming the FHFA is unconstitutional for the same reason. 

[Guest cherzeca]

DC Circuit Judge Kavanaugh wrote an opinion that the CFPB is unconstitutional because it is an independent agency with a single head.  The FnF Texas lawsuit is claiming the FHFA is unconstitutional for the same reason.

 

on 3/20 the collins Ps will file a consolidated brief on the constitutionality of the fhfa as a removable only for cause single director independent agency in the texas southern district, while we will see the DOJ (trump) views on the cfpb director’s similar structure on 3/17 in the dc circuit.

 

this gives rise to the remarkable possibility that, if indeeds the DOJ (trump) sides with phh, fhfa will not only be doing battle in collins all alone, but that the collins Ps can prominently cite DOJ’s position contra fhfa in their brief.

 

one wonders whether the DOJ and fhfa may suffer additional friction or fissures in matters relevant to GSE litigation.

 

in one sense, the unconstitutionality claim against fhfa is stronger than against cfpb since HERA does not have a severability clause. a judge may be less willing to cure the removal for cause only clause if the statute doesn’t have a severability clause that authorizes a judge to do so.

[Luke 532]

http://www.housingwire.com/articles/39497-united-states-flips-sides-supports-phh-in-case-against-cfpb?utm_source=dlvr.it&utm_medium=twitter&utm_campaign=housingwire

[undervalued]

Rolling stone article http://www.rollingstone.com/politics/news/why-is-the-obama-administration-trying-to-keep-11-000-documents-sealed-20160418

[Mephistopheles]

That article is a year old...Obama ain't even president anymore lol

[undervalued]

That article is a year old...Obama ain't even president anymore lol

 

N/m I got the article from twitter links for #fanniegate 5 hours ago.. not from google news.

[Luke 532]

Sweeney order... https://t.co/VeKRY7ICib

[Guest cherzeca]

Sweeney order... https://t.co/VeKRY7ICib

 

not optimal, trusting fox to decide re 11000 other hens.  a sneak peek would have been far preferable...Ps will likely have to go through another motion after govt responds to order

[Luke 532]

Sweeney order... https://t.co/VeKRY7ICib

 

not optimal, trusting fox to decide re 11000 other hens.  a sneak peek would have been far preferable...Ps will likely have to go through another motion after govt responds to order

 

Yeah, I thought it was odd leaving it up to the defendant's interpretation.  Here's what Peter A. Chapman has to say and the order attached.

 

Judge Sweeney entered an Order today:

 

    (A) directing the government, by Apr. 17, 2017, to review the 11,000 documents withheld from Fairholme in light of the rulings on Fairholme's motion to compel, turnover all non-privileged documents to Fairholme, and file a status report confirming those actions;

 

    (B) adopting the 345-day briefing schedule proposed by their parties; and

 

    © requesting additional filings about whether the government should be required to pay Fairholme's costs for bring its motion to compel.

Sweeney_3-7-2017.pdf

[Guest cherzeca]

Sweeney order... https://t.co/VeKRY7ICib

 

not optimal, trusting fox to decide re 11000 other hens.  a sneak peek would have been far preferable...Ps will likely have to go through another motion after govt responds to order

 

Yeah, I thought it was odd leaving it up to the defendant's interpretation.  Here's what Peter A. Chapman has to say and the order attached.

 

Judge Sweeney entered an Order today:

 

    (A) directing the government, by Apr. 17, 2017, to review the 11,000 documents withheld from Fairholme in light of the rulings on Fairholme's motion to compel, turnover all non-privileged documents to Fairholme, and file a status report confirming those actions;

 

    (B) adopting the 345-day briefing schedule proposed by their parties; and

 

    © requesting additional filings about whether the government should be required to pay Fairholme's costs for bring its motion to compel.

 

it would be nice if some new senior trump guy in DOJ just tells DOJ staff to hand over all of docs (subject to seal)

[waynepolsonAtoZ]

"not optimal, trusting fox to decide re 11000 other hens."

 

Still, Sweeney may have sensed that the Trump Administration might look at this "policy call" and reverse course. Seems possible.

 

"Sneak peek" would still be possible even if the Administration wants to keep the stuff secret.

 

Here is where WH might disagree with Treasury/DOJ and get them to change course.

[Eye4Valu]

A Circuit Split would create a high probability of SCOTUS granting certiorari on APA claims. Case now before the Sixth Circuit. Cases to eventually come before the Fifth, Seventh and Eighth Circuits. Just need one of those Circuits to find Judge Brown's dissent persuasive. SCOTUS review not entirely out of the realm of reason.

 

 

[Luke 532]

Solicitor General pick, Noel Francisco, is friends with Charles Cooper.  Cooper turned down the offer for Solicitor General but it looks like we'll get the next best thing (regarding the GSE's).

 

Franciso has been a host to a fundraising event at Cooper's home (see attached image).  Funny how it was for Cruz as President.

 

Information credited to Jared Levine (@JaredALevine on Twitter)

[hardincap]

Also, Cooper and Francisco are connected in the CFPB case.  Cooper representing plaintiffs and Francisco is involved (see attached image).

 

?? phh was argued by ted olson, who is with gibson dunn

 

I dont think the fundraiser connection means anything

[TwoCitiesCapital]

Is there even a chance for them to place it in receivership? The companies are making so much money. The job market is at its highest. The companies will be making even more money as interest rates go up. What would be the basis for them to even consider it?

 

Political ill-will. Politics has nothing to do with good outcomes, logic, or solutions. It has everything to do with getting your way and/or making sure your opponent suffers.

[Luke 532]

Also, Cooper and Francisco are connected in the CFPB case.  Cooper representing plaintiffs and Francisco is involved (see attached image).

 

?? phh was argued by ted olson, who is with gibson dunn

 

 

My mistake, edited original post.  Thank you.

[Luke 532]

Delaware remanded by Judge Sleet.

 

From Peter A. Chapman...

Judge Sleet entered an order today remanding Mr. Pagliara's books and records request to the Delaware Chancery Court.  Judge Sleet rejected FHFA's contention that HERA's succession provision alters or prempts the normal procedure for a shareholder to inspect a Delaware corporation's books and records, and was persuaded by the D.C. Circuit's recent Perry decision that shareholders' direct claims against the GSEs weren't wiped away by HERA.

Sleet_3-8-2017.pdf

[investorG]

Steven Mnuchin quote on Mar 1 2017:

 

"I've been involved in the financial markets for over 30 years and there's 2 things I am 100 percent convinced of:  markets are not efficient and...."

 

best of luck everyone!

 

[Guest cherzeca]

Delaware remanded by Judge Sleet.

 

From Peter A. Chapman...

Judge Sleet entered an order today remanding Mr. Pagliara's books and records request to the Delaware Chancery Court.  Judge Sleet rejected FHFA's contention that HERA's succession provision alters or prempts the normal procedure for a shareholder to inspect a Delaware corporation's books and records, and was persuaded by the D.C. Circuit's recent Perry decision that shareholders' direct claims against the GSEs weren't wiped away by HERA.

 

this is getting into some serious legal weeds, but here is my latest thought process, based upon judge sleet's decision in pagliara:

 

judge sleet in his decision to remand in pagliara has just indicated to the hindes/jacobs Ps that it's direct claims that NWS breached Ps' rights as preferred and common stockholders under delaware general corporation law are not preempted by HERA.

 

now, the crucial claim that hindes/jacobs wishes to pursue is that the NWS is an invalid preferred stock under dgcl.  it's initial strategy was to assert this claim as an APA claim, saying that the NWS violates the APA since it is invalid under state law.  this would be precluded if judge sleet follows perry on HERA's anti-injunction 4617(f).  sleet hasnt addressed this point.

 

but in my view, hindes/jacobs should be able to assert that, in determining a proper remedy for breach of Ps' shareholder rights, instead of resorting to the standard money damages remedy, hindes/jacobs should be able to argue that because the NWS is invalid under dgcl, fhfa has unclean hands and a proper unjust enrichment remedy should be granted (which a delaware chancery court routinely grants), which would place Ps in position they were in before the invalid NWS was issued.

 

this would get at the invalidation of the NWS as a remedy for a contractual breach by an instrument that was invalidly issued, as opposed as a direct claim under APA.

 

this line of thinking would also apply to hume's case in perry.

 

EDIT:  fhfa/treasury would argue that any equitable remedy is not permitted by HERA.  My line of thinking above is that Ps are bringing a contract breach case for money damages, which is clearly permitted by HERA.  If Treasury's unclean hands leave Plaintiffs with no adequate remedy at law for a breach of contract case, and treasury would be unjustly enriched by having an illegal nws remain outstanding, then the court can grant a remedy that is appropriate in connection with an action, such as a breach of contract, which is clearly permitted by HERA.

 

this comes down to whether issuing the nws is a power of conservator under HERA, but it would be determined in connection with an action that is clearly permitted by HERA, breach of contract, and it would be determined only in the remedy portion of the case.

[orthopa]

Some of the variable preferred series are trading much cheaper relative to the higher div preferred and common then they have historically FWIW.

[Luke 532]

Trump meeting ICBA today...

http://www.cnbc.com/2017/03/09/trump-to-meet-with-us-community-bankers-on-regulatory-costs.html

 

ICBA last month...

ICBA: Let Fannie, Freddie Build Capital (February 17, 2017)

https://www.icba.org/news-events/latest-news/2017/02/17/icba-let-fannie-freddie-build-capital

[Luke 532]

Trump meeting ICBA today...

http://www.cnbc.com/2017/03/09/trump-to-meet-with-us-community-bankers-on-regulatory-costs.html

 

ICBA last month...

ICBA: Let Fannie, Freddie Build Capital (February 17, 2017)

https://www.icba.org/news-events/latest-news/2017/02/17/icba-let-fannie-freddie-build-capital

 

Looks like Mnuchin and Cohn are there, too.  See attached image.

[hardincap]

meeting is focused on dodd frank regulatory relief. probably unlikely f&f gets much if any airtime

 

edit: yep no talk of f&f http://www.icba.org/news-events/press-releases/2017/03/09/icba-community-bankers-meet-with-president-trump

[Flynnstone5]

I find the price action concerning. This just feels like it's back to what's the next leg of bad news to drop.

[Spekulatius]

Is there even a chance for them to place it in receivership? The companies are making so much money. The job market is at its highest. The companies will be making even more money as interest rates go up. What would be the basis for them to even consider it?

 

Political ill-will. Politics has nothing to do with good outcomes, logic, or solutions. It has everything to do with getting your way and/or making sure your opponent suffers.

 

Self interest. The NWS is immensely profitable for the government right now, why give it up? Mnuchin works for the government now and Trump, who will need every penny he can get hold of for his projects? Why give away the goose who lays golden eggs now every 6 month? I would expect the governement trying to dump FNM/FRE when the housing market goes bad and these entities become liabilities for them.