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

[Midas79]

Speaking of my Twitter posts, the President's Budget appears to be giving a tell that they want FnF's footprint reduced by artificially increasing g-fees, with the extra proceeds going to Treasury so shareholders wouldn't benefit.

 

https://twitter.com/midas79_/status/1227314350106578946

[Luke 532]

Metzner (ACG)...

Calabria speaks at Harvard. Capital Rule published by the end of March. #GSEs #housingfinance

[Guest cherzeca]

I would hope that my high degree of expectation is warranted that after the 90 day comment period, after a prior round of fhfa rule promulgation and comment period, we have a workable capital rule that. balances taxpayer protection and capital raising concerns.  which would put us at the end of July, when scotus should have decided seila (which I expect to be a big win for GSEs) and set the stage for a come to Jesus negotiation leading up to recap and release

[investorG]

I would hope that my high degree of expectation is warranted that after the 90 day comment period, after a prior round of fhfa rule promulgation and comment period, we have a workable capital rule that. balances taxpayer protection and capital raising concerns.  which would put us at the end of July, when scotus should have decided seila (which I expect to be a big win for GSEs) and set the stage for a come to Jesus negotiation leading up to recap and release

 

if that was their intention why would they wait until the peak of election season for a politically risky headline(s) when they could do the same thing now (assuming the SC held Collins)?  The only reason I could see is if they successfully cobble together a large private placement at the same time with a broadly respected investor(s), and that deal was not available now.  I don't believe the capital rule or seila outcome is a prerequisite for a potential 4th amendment.

[Luke 532]

Fed Chair Jay Powell on GSE reform: "I think in the long run it’s very important that GSE reform happen… it’s not really ideal to have the entire financial system riding on the federal government in the long run."

[Luke 532]

$FMCC CEO on conference call ”Our top strategic priority...is to exit conservatorship responsibly...We hope to actively begin a search for our own financial advisor (for capital raise) in the coming weeks and hope to report on progress on that in the near future”

 

Focusing on exiting conservatorship, good.  Begin a search, as in haven't begun already, yuck.  Maybe they were waiting for FHFA to pick theirs to, shall we say, guide their decision.

[Midas79]

$FMCC CEO on conference call ”Our top strategic priority...is to exit conservatorship responsibly...We hope to actively begin a search for our own financial advisor (for capital raise) in the coming weeks and hope to report on progress on that in the near future”

 

Focusing on exiting conservatorship, good.  Begin a search, as in haven't begun already, yuck.  Maybe they were waiting for FHFA to pick theirs to, shall we say, guide their decision.

 

As long as the search doesn't take too long I'm not worried about it not having been started yet. We're still 6 weeks away from the capital rule and there is little, if anything, FnF's advisors can do until then.

[Guest cherzeca]

rule of law guy's latest:  https://seekingalpha.com/article/4324008-for-fannie-and-freddie-shareholders-road-to-litigation-settlement-runs-through-seila

[Midas79]

rule of law guy's latest:  https://seekingalpha.com/article/4324008-for-fannie-and-freddie-shareholders-road-to-litigation-settlement-runs-through-seila

 

Good stuff!

 

If SCOTUS really does find in favor Seila and grants retroactive relief (vacating the CID), I agree that this gives the Collins plaintiffs a ton of ammunition to get the NWS retroactively vacated, whether by court judgment or settlement. However, could someone else come in later and try to argue that the entirety of the PSPAs/conservatorships should be voided for the same reason? That would open a whole can of worms that I don't think many want to mess with.

[Guest cherzeca]

rule of law guy's latest:  https://seekingalpha.com/article/4324008-for-fannie-and-freddie-shareholders-road-to-litigation-settlement-runs-through-seila

 

Good stuff!

 

If SCOTUS really does find in favor Seila and grants retroactive relief (vacating the CID), I agree that this gives the Collins plaintiffs a ton of ammunition to get the NWS retroactively vacated, whether by court judgment or settlement. However, could someone else come in later and try to argue that the entirety of the PSPAs/conservatorships should be voided for the same reason? That would open a whole can of worms that I don't think many want to mess with.

 

that person would be barred by the statute of limitations

[Williams406]

cherzeca,

 

Thanks for that--we need to get that ROLG posting here!  ;) I really appreciate the detailed look at the litigation profile.

[hardincap]

thanks cherzeca. its not obvious to me at all why SC will rule CFPB unconstitutional, when en banc upheld constitutionality 7-3 (not even close), overruling kavanaugh's opinion. can you pls elaborate?

[Guest cherzeca]

thanks cherzeca. its not obvious to me at all why SC will rule CFPB unconstitutional, when en banc upheld constitutionality 7-3 (not even close), overruling kavanaugh's opinion. can you pls elaborate?

 

dc circuit 9th circuit very liberal.  warren-ites.  calling CFPB unconstitutionally structured at scotus is an easy call imo.  remember 12-4 in 5th C that fhfa is unconstitutionally structured.  likely 5-4 in scotus, maybe kagan makes it 6-3

 

edit:  Seila is coming to scotus from 9th circuit.  also very liberal.  my bad

[hardincap]

thanks cherzeca. its not obvious to me at all why SC will rule CFPB unconstitutional, when en banc upheld constitutionality 7-3 (not even close), overruling kavanaugh's opinion. can you pls elaborate?

 

dc circuit very liberal.  warren-ites.  calling CFPB unconstitutionally structured at scotus is an easy call imo.  remember 12-4 in 5th C that fhfa is unconstitutionally structured.  likely 5-4 in scotus, maybe kagan makes it 6-3

 

you're counting kavanaugh, but its very possible he'll recuse himself right?

[Guest cherzeca]

thanks cherzeca. its not obvious to me at all why SC will rule CFPB unconstitutional, when en banc upheld constitutionality 7-3 (not even close), overruling kavanaugh's opinion. can you pls elaborate?

 

dc circuit very liberal.  warren-ites.  calling CFPB unconstitutionally structured at scotus is an easy call imo.  remember 12-4 in 5th C that fhfa is unconstitutionally structured.  likely 5-4 in scotus, maybe kagan makes it 6-3

 

you're counting kavanaugh, but its very possible he'll recuse himself right?

 

good god no!  seila is up to scotus from 9th circuit.  kavanugh has had zero participation in seila and has absolutely no reason to recuse

[hardincap]

https://www.cnbc.com/2019/12/17/progressives-demand-kavanaugh-recuse-from-cfpb-supreme-court-case.html

 

lets hope not

 

 

 

 

[Guest cherzeca]

https://www.cnbc.com/2019/12/17/progressives-demand-kavanaugh-recuse-from-cfpb-supreme-court-case.html

 

lets hope not

 

impartiality has a precise meaning.  this stupid "progressive" proposal is a dead dog, and dead dogs dont hunt

[Sunrider]

rule of law guy's latest:  https://seekingalpha.com/article/4324008-for-fannie-and-freddie-shareholders-road-to-litigation-settlement-runs-through-seila

 

Chris, as always clear and to the point - much appreciated!

[Luke 532]

Q4 2019 earnings for Fannie and Freddie accelerate #GSE reform timeline. #ACGAResearch

 

Timeline attached...

ACG_Timeline_2-14-2020.jfif

[Luke 532]

Interesting... FHFA renames the "Division of Conservatorship" to the "Division of Resolutions"

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Realignment-of-its-Agency-Structure.aspx

 

In a structural revamp, FHFA’s Division of Conservatorship will be renamed the Division of Resolutions, and will continue to prepare the GSEs for exit from conservatorship. But it will also work on developing post-conservatorship structures and tools. https://www.insidemortgagefinance.com/articles/217075-fhfa-adds-three-new-divisions?v=preview

 

Emphasis added in bold is mine.

[investorG]

rule of law guy's latest:  https://seekingalpha.com/article/4324008-for-fannie-and-freddie-shareholders-road-to-litigation-settlement-runs-through-seila

 

Thank you.

 

Is the SC more conservative than the 5th circuit en banc (7-9 outcome)?

 

For a non-lawyer, the retrospective relief sounds somewhat arbitrary on what it applies to and could make for messier legal outcomes regarding other random decisions the cfpb / fhfa have made in recent years?

 

[Luke 532]

Bloomberg as President would push to merge Fannie and Freddie...

https://www.marketwatch.com/story/bloomberg-to-push-for-financial-transactions-tax-and-fannie-freddie-merger-2020-02-18?mod=mw_share_twitter

[Guest cherzeca]

rule of law guy's latest:  https://seekingalpha.com/article/4324008-for-fannie-and-freddie-shareholders-road-to-litigation-settlement-runs-through-seila

 

Thank you.

 

Is the SC more conservative than the 5th circuit en banc (7-9 outcome)?

 

For a non-lawyer, the retrospective relief sounds somewhat arbitrary on what it applies to and could make for messier legal outcomes regarding other random decisions the cfpb / fhfa have made in recent years?

 

retrospective relief is precisely not arbitrary...you give P the relief it is seeking.  this is the traditional understanding of judicial power, to hear actual cases and controversies and apply the law to redress the P's injury, not to clean up some statute.  forget about liberal v conservative, not  a useful construct in this context, rather think in terms of scotus moving back to a more traditional scope of its power.  this has been a big thing with Thomas and he has patiently urged the court to focus on limiting its own conception of judicial power which is very much in tune with the current makeup of court

[Guest cherzeca]

Bloomberg as President would push to merge Fannie and Freddie...

https://www.marketwatch.com/story/bloomberg-to-push-for-financial-transactions-tax-and-fannie-freddie-merger-2020-02-18?mod=mw_share_twitter

 

the first mention of GSEs in this presidential election cycle...probably the last as well

[investorG]

rule of law guy's latest:  https://seekingalpha.com/article/4324008-for-fannie-and-freddie-shareholders-road-to-litigation-settlement-runs-through-seila

 

Thank you.

 

Is the SC more conservative than the 5th circuit en banc (7-9 outcome)?

 

For a non-lawyer, the retrospective relief sounds somewhat arbitrary on what it applies to and could make for messier legal outcomes regarding other random decisions the cfpb / fhfa have made in recent years?

 

retrospective relief is precisely not arbitrary...you give P the relief it is seeking.  this is the traditional understanding of judicial power, to hear actual cases and controversies and apply the law to redress the P's injury, not to clean up some statute.  forget about liberal v conservative, not  a useful construct in this context, rather think in terms of scotus moving back to a more traditional scope of its power.  this has been a big thing with Thomas and he has patiently urged the court to focus on limiting its own conception of judicial power which is very much in tune with the current makeup of court

 

If they grant backward looking relief then what's to stop a flood of lawsuits from people who have felt wronged by the FHFA or CFPB for any other matter over the past few years?