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

[Guest cherzeca]

You all make great points. You never know with judges though. It's tough to interpret their questions and comments one way or the other. Case in point..."Salting the Earth" and "Hotel California" comments made you think those judges were sympathetic to the plaintiffs arguments, until they ruled the other way.

 

as I recall hotel California was willett, who ruled for Ps

 

I agree this question is out of left field.  the whole P claim is that the bar to relief (whether just injunctive or to damages as well) does not apply to fhfa actions that are ultra vires, as is NWS.

 

either one or more judges don't understand P claim, or they just think it best to get an unbriefed question answered.

 

[Midas79]

You all make great points. You never know with judges though. It's tough to interpret their questions and comments one way or the other. Case in point..."Salting the Earth" and "Hotel California" comments made you think those judges were sympathetic to the plaintiffs arguments, until they ruled the other way.

 

as I recall hotel California was willett, who ruled for Ps

 

I agree this question is out of left field.  the whole P claim is that the bar to relief (whether just injunctive or to damages as well) does not apply to fhfa actions that are ultra vires, as is NWS.

 

either one or more judges don't understand P claim, or they just think it best to get an unbriefed question answered.

 

Is there any in-between room possible, where the court can say that they can't issue injunctive relief due to 4617(f) but can find a way to award damages, under the theory that an outflow of money from Treasury would not "restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver"?

 

If this court somehow rules that even damages cannot be awarded due to the 4617(f) bar then the lawsuits are in a ton of trouble.

[Eye4Valu]

You all make great points. You never know with judges though. It's tough to interpret their questions and comments one way or the other. Case in point..."Salting the Earth" and "Hotel California" comments made you think those judges were sympathetic to the plaintiffs arguments, until they ruled the other way.

 

as I recall hotel California was willett, who ruled for Ps

 

My bad. What a classic comment and well thought out dissent by Willett!

[rros]

If the reason for our defeats is a shared view by both courts and government that the practice of "litigation finance" must never succeed, everybody will hide behind 4617. Regardless of how right we may be.

 

InvestorG put it in other terms by saying no ruling against the government apparatus.

 

Back in the day, Senators Warner and Corker were very vocal about this practice and called it "an industry".

 

And, as the exception that confirms the rule we may get our Pirric victory here and there laid out to us as a strong dissent.

 

But it is easier for me to believe this because I am not a law person. Legal minds probably hate this thought.

 

I hope I am wrong.

 

Edit: coincidentally, a member started a thread yesterday about Paul Singer, the king of litigation finance.

[Eye4Valu]

Did you all listen to Ackman on the recent conference call? I thought the following point he made was a good one: "What's interesting about this security is it treated really like a litigation security. Restaurant stocks penetrate very much in same-store sales, these stocks are treated really based on people's perception of progress in litigation. And I think that is not sufficiently farsighted. I think litigation will still move -- obviously if there is a -- we have a government's motion to dismiss is defeated. Stock will trade up on that but at the end of the day here you have two of the greatest businesses ever created in very strong dominant positions performing really well and we are a large common stockholder of."

 

Many if not all of the recent posts on this thread are litigation related. Is it possible that people aren't seeing the forest from the trees here?

[rros]

Where is the strength of the common coming from? Is it related to the statute of limitations referred to by Chris? As in... the lawsuit saga is over? Those in are a lost cause and no possible new ones?

[BeerBBQ]

Anyone have any thoughts on this lawsuit?

 

https://pennrecord.com/stories/511539439-class-action-lawsuit-filed-against-federal-housing-finance-agency-and-treasury-department#.W3277o7CxEd.twitter

 

[Guest cherzeca]

Where is the strength of the common coming from? Is it related to the statute of limitations referred to by Chris? As in... the lawsuit saga is over? Those in are a lost cause and no possible new ones?

 

no clue.  probably rumor mongering on the less reputable boards

[Guest cherzeca]

Anyone have any thoughts on this lawsuit?

 

https://pennrecord.com/stories/511539439-class-action-lawsuit-filed-against-federal-housing-finance-agency-and-treasury-department#.W3277o7CxEd.twitter

 

given the 5th circuit fhfa unconstitutionally structured holding, the federal court of claims is the venue for an illegal exaction claim, seeking relief from the retention of monetary benefit from an illegal action.  this assumes the unconstitutionally structured holding holds up upon rehearing/cert

 

[Midas79]

Where is the strength of the common coming from? Is it related to the statute of limitations referred to by Chris? As in... the lawsuit saga is over? Those in are a lost cause and no possible new ones?

 

no clue.  probably rumor mongering on the less reputable boards

 

Shoot, if that's all it took commons would be over $30 by now.

 

I am stuggling somewhat to find a rational explanation though. The statute of limitations thing seems more like a negative to me, if the current lawsuits all fail then no more will be forthcoming.

[rros]

... no more will be forthcoming.

So,

 

Hedge funds/litigants > gone.

Congress > gone (gave up).

Watt > soon gone.

 

Looks like the road ahead is clear for the WH to do whatever it pleases. Maybe what pleases the WH also pleases the commons?

 

Note that in a recap scenario commons will move ahead of the Jrs. The Jrs. will only move ahead of commons if the Srs. are taken out.

 

I am just impressed at the solid buying and today's gap up. Congrats to the holders.

[beaufort]

Shareholders lost Saxton:  http://media.ca8.uscourts.gov/opndir/18/08/171727P.pdf

 

Edit:  one positive is that the court interprets the anti-injunctive provision to only apply to equitable relief when the conservator is acting within its statutory powers.

 

 

[allnatural]

3-0 8)

 

Judge Stras footnote on constitutional issue:

 

"The delegation is more harrowing still. The President can only remove the

FHFA’s director for cause; Congress cannot control its budget through the normal

appropriations process; and the judiciary cannot interfere with the exercise of its

powers or functions as conservator. See Collins v. Mnuchin, No. 17-20364, 2018 WL

3430826, at *18 (5th Cir. July 16, 2018) (per curiam); see also 12 U.S.C.

§§ 4512(b)(2), 4516(a), (f), 4617(f). But unlike the plaintiffs in Collins, the

shareholders do not raise a constitutional challenge in this case. Rather, they ask us

to decide only whether the FHFA has exceeded its statutory powers and functions."

 

Shareholders lost Saxton:  http://media.ca8.uscourts.gov/opndir/18/08/171727P.pdf

[Luke 532]

3-0 8)

 

Shareholders lost Saxton:  http://media.ca8.uscourts.gov/opndir/18/08/171727P.pdf

 

Good thing my thesis doesn't depend on the courts.  With that said, a court win would be a nice bonus to speed up the process.

[rros]

Somehow, I think the power people who concocted the nws never read, considered or understood HERA the way all these judges seem to be interpreting it. Neither Krimminger nor Calabria realized what kind of door they were opening when they helped craft the law.

 

So the Obama guys simply got lucky.

 

Looking back, when trouble was brewing early on in 2008 and Hank Paulson began requesting Congress for broader authority for Treasury, it is inconceivable he may have asked for nationalization powers. Instead, and in light of his most recent interview, his idea must have been taking over whatever needed to be taken over to later liquidate, when calm returned.

 

But then, a communist President took over. Going from liquidation -that may have benefited the Jrs.- to nationalization was an easy decision for Obama who may have understood better than anybody else he could get away with it.

[Guest cherzeca]

3-0 8)

 

Judge Stras footnote on constitutional issue:

 

"The delegation is more harrowing still. The President can only remove the

FHFA’s director for cause; Congress cannot control its budget through the normal

appropriations process; and the judiciary cannot interfere with the exercise of its

powers or functions as conservator. See Collins v. Mnuchin, No. 17-20364, 2018 WL

3430826, at *18 (5th Cir. July 16, 2018) (per curiam); see also 12 U.S.C.

§§ 4512(b)(2), 4516(a), (f), 4617(f). But unlike the plaintiffs in Collins, the

shareholders do not raise a constitutional challenge in this case. Rather, they ask us

to decide only whether the FHFA has exceeded its statutory powers and functions."

 

Shareholders lost Saxton:  http://media.ca8.uscourts.gov/opndir/18/08/171727P.pdf

 

well the 8th circuit will soon hear the constitutional claims in an appeal of bhatti.  highly inappropriate for stas to comment on a claim not argued before him imo

[Eye4Valu]

Let's assume for arguments sake that the Ps actually won one of these cases and had the NWS enjoined. Would that really speed up the time table to resolution here given the likelihood of appeal? Would any administrative resolution be drastically different than what they would put forth otherwise? I'm thinking probably not, but curious what others think.

[waynepolsonAtoZ]

"But then, a communist President took over."

 

Well, if it's fair to say that Obama is a communist, then it must also be fair to say that The Donald is a Nazi.

[rros]

"But then, a communist President took over."

 

Well, if it's fair to say that Obama is a communist, then it must also be fair to say that The Donald is a Nazi.

Let me expand. Maybe none of them are on the extreme end. But whatever Obama may be, a socialist, a half-communist, a progressive leader or none of the above, he ok'd confiscating property. That was a choice.

[investorG]

3-0 8)

 

Shareholders lost Saxton:  http://media.ca8.uscourts.gov/opndir/18/08/171727P.pdf

 

Good thing my thesis doesn't depend on the courts.  With that said, a court win would be a nice bonus to speed up the process.

 

 

it's highly likely the shareholders lose or receive a small payment from the remaining court cases.  mnuchin might wait for the cases to fizzle before acting administratively.  this would also allow for another legislative crack in spring and summer 2019.  if you're out there, Mr. Mnuchin, please in the mean time stop the sweep after the 10pct moment is hit.

 

[rros]

3-0 8)

 

Shareholders lost Saxton:  http://media.ca8.uscourts.gov/opndir/18/08/171727P.pdf

 

Good thing my thesis doesn't depend on the courts.  With that said, a court win would be a nice bonus to speed up the process.

 

 

it's highly likely the shareholders lose or receive a small payment from the remaining court cases.  mnuchin might wait for the cases to fizzle before acting administratively.  this would also allow for another legislative crack in spring and summer 2019.  if you're out there, Mr. Mnuchin, please in the mean time stop the sweep after the 10pct moment is hit.

And in your view, what would the legislative approach most likely be -new Congress aside- and what would an administrative solution may look like?

[investorG]

3-0 8)

 

Shareholders lost Saxton:  http://media.ca8.uscourts.gov/opndir/18/08/171727P.pdf

 

Good thing my thesis doesn't depend on the courts.  With that said, a court win would be a nice bonus to speed up the process.

 

 

it's highly likely the shareholders lose or receive a small payment from the remaining court cases.  mnuchin might wait for the cases to fizzle before acting administratively.  this would also allow for another legislative crack in spring and summer 2019.  if you're out there, Mr. Mnuchin, please in the mean time stop the sweep after the 10pct moment is hit.

And in your view, what would the legislative approach most likely be -new Congress aside- and what would an administrative solution may look like?

 

rros, mnuchin said to congress recently he prefers an explicit guaranty at the security level.  this requires congress.  also, there's been a lot of work done in the senate committee and pat toomey or sherrod brown (if he wins his race) are the likely future chairman (depending on who wins control) and either would probably want to give it a firm shot imo.  plus, the extra time lets some of the other court cases fizzle.  finally, a legislative solution is more official and permanent.  still, there's a good chance it fails in the end.

 

a true administrative solution is likely something near the moelis plan but that's probably a late 2019 potential event.  What I believe is fair is a parallel process whereby he works legislatively but also - once the 10pct moment is hit for both companies - freezes the sweep and institutes the commitment fee in its place to get the capital build going - the companies are massively overpaying for the backstop capital committment at the moment.  And, if the warrants are the backup plan to build the wall then he wouldn't want to wait too long to get things started.

 

 

 

[rros]

3-0 8)

 

Shareholders lost Saxton:  http://media.ca8.uscourts.gov/opndir/18/08/171727P.pdf

 

Good thing my thesis doesn't depend on the courts.  With that said, a court win would be a nice bonus to speed up the process.

 

 

it's highly likely the shareholders lose or receive a small payment from the remaining court cases.  mnuchin might wait for the cases to fizzle before acting administratively.  this would also allow for another legislative crack in spring and summer 2019.  if you're out there, Mr. Mnuchin, please in the mean time stop the sweep after the 10pct moment is hit.

And in your view, what would the legislative approach most likely be -new Congress aside- and what would an administrative solution may look like?

 

rros, mnuchin said to congress recently he prefers an explicit guaranty at the security level.  this requires congress.  also, there's been a lot of work done in the senate committee and pat toomey or sherrod brown (if he wins his race) are the likely future chairman (depending on who wins control) and either would probably want to give it a firm shot imo.  plus, the extra time lets some of the other court cases fizzle.  finally, a legislative solution is more official and permanent.  still, there's a good chance it fails in the end.

 

a true administrative solution is likely something near the moelis plan but that's probably a late 2019 potential event.  What I believe is fair is a parallel process whereby he works legislatively but also - once the 10pct moment is hit for both companies - freezes the sweep and institutes the commitment fee in its place to get the capital build going - the companies are massively overpaying for the backstop capital committment at the moment.  And, if the warrants are the backup plan to build the wall then he wouldn't want to wait too long to get things started.

Amid the bad news, this doesn't sound too bad. Whatever the chances are. Thank you.

[Luke 532]

Report from CBO out yesterday...

 

Transitioning to Alternative Structures for Housing Finance: An Update August 23, 2018 Report

https://www.cbo.gov/publication/54218

CBO analyzes four alternative structures for the secondary mortgage market, in which the government would play varying roles in guaranteeing mortgage-backed securities, and provides estimates of federal costs under each approach.

[rros]

Report from CBO out yesterday...

 

Transitioning to Alternative Structures for Housing Finance: An Update August 23, 2018 Report

https://www.cbo.gov/publication/54218

CBO analyzes four alternative structures for the secondary mortgage market, in which the government would play varying roles in guaranteeing mortgage-backed securities, and provides estimates of federal costs under each approach.

So one of the options is nationalization, a status quo from today and the shortest and easiest path. All they need to do is cancel our shares and voila.