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


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This sure does make you wonder what is happening behind the scenes.  Politically, I suspect that neither the White House or members of Congress want any headlines to the effect of "hedge-funds earn millions/billions in legal victory against Treasury". 

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This sure does make you wonder what is happening behind the scenes.  Politically, I suspect that neither the White House or members of Congress want any headlines to the effect of "hedge-funds earn millions/billions in legal victory against Treasury". 

 

And I'm sure they wouldn't mind a headline to the effect of "taxpayers earn $200 billion profit on Fannie/Freddie bailout"

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You know I re-read the original Forensic Look by Adam Spittler and Micke Cklin last night. I think about the Ugoletti testimony, the other testimonies,  former White House National Economic Council senior adviser Jim Parrott deposition. What if in some of these depositions they lie under oath? Is that even possible these days? And all i can think is that this just screams House of cards style scandal. All you need is a whistle blower to come out and talk about whats in the redacted documents.

 

Just imagine that. Start up the hearings.

 

If I were the Republicans thats exactly what i would want, especially in an election year. Yeah it'd be nice to screw over hedge funds and reap the tax payers $200B. Thats good fantastic. But I gatta think, What better way to get you street cred than going after the Obama administration for breaking the 5th amendment, a massive Enron style accounting scandal....not by business but by insiders at the Treasury and with the Obama administration knowledge(maybe, maybe not). I mean thats some Iran–Contra shit right there. Then on top of all that you can sit down and say...Look at us were pro-business, pro home owner, pro Constitution. You can now have something to really taint his legacy. Shit it might even be grounds for impeachment.

 

 

Again a bit conspiracy theoryish but i dont think its all that impossible.

 

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This sure does make you wonder what is happening behind the scenes.  Politically, I suspect that neither the White House or members of Congress want any headlines to the effect of "hedge-funds earn millions/billions in legal victory against Treasury". 

 

And I'm sure they wouldn't mind a headline to the effect of "taxpayers earn $200 billion profit on Fannie/Freddie bailout"

 

I absolutely agree.  I understand doughishere's point, but don't see any repubs taking this angle.  Populism is sweeping across the US as evidenced by the leading candidates (on both sides) for president.  I don't think politicians of either side want ANY association (real, imagined, direct, or indirect) with hedge-funds. 

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This sure does make you wonder what is happening behind the scenes.  Politically, I suspect that neither the White House or members of Congress want any headlines to the effect of "hedge-funds earn millions/billions in legal victory against Treasury". 

 

And I'm sure they wouldn't mind a headline to the effect of "taxpayers earn $200 billion profit on Fannie/Freddie bailout"

 

I absolutely agree.  I understand doughishere's point, but don't see any repubs taking this angle.  Populism is sweeping across the US as evidenced by the leading candidates (on both sides) for president.  I don't think politicians of either side want ANY association (real, imagined, direct, or indirect) with hedge-funds.

 

Who cares about the hedge funds, at worst you are netural towards them. You dona atta boy them publicly....You get to do what youve been trying to do for the last 8 years..screw over the Obama administration.

 

What better way to play the populism part then to get up in front of the people and say "Look at Obama, he wants to take away your business without just compensation?" You think Joe the plumbers is gonna hate the hedge fund guy or Obama more?

 

Even Libertarians like Richard Epstein dont like what Obama has done despite not exactly loving Fannie and Freddie. I think Epstien even says that him self somewhere. If you can convert the Libertarians you can get the far right.

 

 

I hate to get into this. Its more of a political discussion and its my experience that Value Investors stay away from politics as much as possible....but it is pretty juicy.

 

 

The other thing that got me thinking about this is how Bethany Mclean talks about this on the few clips ive seen from her....Enron was before my time so all i have to go off is google searches, books and vids. But man, she looks like shes been down this road before.

 

A friend of mine uses the quote "Where theres smoke, theres fire." Normally I hate it, I like to see the fire before i shout it but...... maybe im just getting too excited.

 

 

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Nick Timiraos reoportedit was blocked this morning.

 

 

I think Nick is just re-iterating that Sherrod Brown has a hold on the bill.

 

Could anyone please help me understand how congress works?

Who is Sherrod Brown? Why can this senator along block a bill? Does he have super voting power?

 

Your first question would take too long to answer. Senator Brown sits on a committee that governs bills having to do with banking and housing, and therefore, he has the ability to put an indefinite hold on a bill that prevents it from coming up for a vote. It has nothing to do with voting power.

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Merk, i get it. I sound like the crazy bird lady. And I will be the first to admit there is no evidence.

 

 

Is there anything that crazy about what's said in the forensic doc even if the dir signed off on it?

 

Don't know about crazy, but a little odd, yes.

 

"Why did federal regulators design a financial support program for Fannie and Freddie on the basis of academic estimates of future

performance rather than tried and true statutory accounting and claims-paying ability (which is the standard for all regulated

mortgage insurers)?"

 

http://www.fairholmefundsinc.com/Reports/FAIRX2015SemiAnnual.pdf

 

This non-lawyer agrees with merkhet: from a legal perspective this doesn't seem relevant.

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Ive poststed this in a number of forums. Page 41 of Bethany McLeans book states...

 

"A member of the group that sets federal accounting guidelines later explained that government wasn't actually going to exercise its right to take ownership of Fannie and Freddie. Instead, the bailout was designed this way because "driving the stock market value to zero" would "prevent current shareholder speculation resulting in speculators taking advantage of government intervention at the expense of others," according to the minutes of the meeting that became public in 2015"

 

What meeting was this? Where are those minutes located? Anyone know?

 

I got a little outta hand yesterday....apologies.

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Ive poststed this in a number of forums. Page 41 of Bethany McLeans book states...

 

"A member of the group that sets federal accounting guidelines later explained that government wasn't actually going to exercise its right to take ownership of Fannie and Freddie. Instead, the bailout was designed this way because "driving the stock market value to zero" would "prevent current shareholder speculation resulting in speculators taking advantage of government intervention at the expense of others," according to the minutes of the meeting that became public in 2015"

 

What meeting was this? Where are those minutes located? Anyone know?

 

I got a little outta hand yesterday....apologies.

 

http://www.fasab.gov/pdffiles/oct08mins.pdf

 

http://www.fasab.gov/pdffiles/dec08mins.pdf

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I'm a big fan of Ackman and McLean, and have high hopes for these cases against the Govt. But, I don't think the argument that F&F have no capital is a great one. They have unlimited capital in the form of full backing of the U.S. Government borrowing capabilities and printing press. It's not like they'd be left for dead in the event of a crisis, assuming this status quo remains.

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I'm a big fan of Ackman and McLean, and have high hopes for these cases against the Govt. But, I don't think the argument that F&F have no capital is a great one. They have unlimited capital in the form of full backing of the U.S. Government borrowing capabilities and printing press. It's not like they'd be left for dead in the event of a crisis, assuming this status quo remains.

 

That sums up the $400B argument.

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I'm a big fan of Ackman and McLean, and have high hopes for these cases against the Govt. But, I don't think the argument that F&F have no capital is a great one. They have unlimited capital in the form of full backing of the U.S. Government borrowing capabilities and printing press. It's not like they'd be left for dead in the event of a crisis, assuming this status quo remains.

 

That sums up the $400B argument.

 

Just saying that I think there are many great reasons to be bullish: violation of 5th amendment, illegal under Delaware law, the dangerous precedent set, the risk of public release of documents. But the lack of capital is not a real problem when you're backed by unlimited funding when needed. Makes for great talking points though.

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I'm a big fan of Ackman and McLean, and have high hopes for these cases against the Govt. But, I don't think the argument that F&F have no capital is a great one. They have unlimited capital in the form of full backing of the U.S. Government borrowing capabilities and printing press. It's not like they'd be left for dead in the event of a crisis, assuming this status quo remains.

 

That sums up the $400B argument.

 

Just saying that I think there are many great reasons to be bullish: violation of 5th amendment, illegal under Delaware law, the dangerous precedent set, the risk of public release of documents. But the lack of capital is not a real problem when you're backed by unlimited funding when needed. Makes for great talking points though.

 

The lack of capital is the political argument that gets them airtime because most tax-payers who bailed out companies once don't look so favorably at the possibility of having to do it again. The networth sweep eliminates any chance that the GSEs could ever recapitalize on their own and leaves taxpayers on the hook for bailout after bailout after bailout every time the economy hits a rough patch...

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