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

[Guest cherzeca]

thapur in robinson case has indicated that he's ready to rule on the govt's motion to dismiss.. do we get that ruling any day now?

 

im assuming sleet in delaware case is ready to rule on the certification motion as well, also due any day now?

 

thapur should be ready to roll, based upon his prior comments.

 

sleet is another matter in terms of timing, but the ball is back in his court, and the motion to ask del supreme ct to decide principal issue of case is before him.  only thing to fear is that sleet somehow finds that federal law controls. 

[Guest cherzeca]

today is a good day to compare price action in fmnas v fnma.  my takeaway is that fnma benefits from momo day traders who are clueless but know a good day chart when they see one, and are much more likely to trade fnma than fnmas.  so apart from considerations of valuation and risk, i think fnma stands to benefit more than fnmas from good news.  fwiw

[Mephistopheles]

Woo!

 

So what this means is, if the DC Appeals Court rules to remand for further fact finding, then the Government's main argument that HERA bars judicial review is crumbled in like 10 cases spread across the country, while simultaneously we are likely to see more documents to enforce the plaintiff's arguments in all these courts. Am I reading this right?

 

[Guest cherzeca]

Woo!

 

So what this means is, if the DC Appeals Court rules to remand for further fact finding, then the Government's main argument that HERA bars judicial review is crumbled in like 10 cases spread across the country, while simultaneously we are likely to see more documents to enforce the plaintiff's arguments in all these courts. Am I reading this right?

 

basically right.  my view is that the risk of having lamberth alone running things on remand is no longer there since other cases continue under other judges (ie more reasonable judges). while dc app ct's rejection of fhfa's main argument would not be binding in other courts, it should be persuasive.

[TwoCitiesCapital]

Woo!

 

So what this means is, if the DC Appeals Court rules to remand for further fact finding, then the Government's main argument that HERA bars judicial review is crumbled in like 10 cases spread across the country, while simultaneously we are likely to see more documents to enforce the plaintiff's arguments in all these courts. Am I reading this right?

 

basically right.  my view is that the risk of having lamberth alone running things on remand is no longer there since other cases continue under other judges (ie more reasonable judges). while dc app ct's rejection of fhfa's main argument would not be binding in other courts, it should be persuasive.

 

I'm only surprised that the equity/preferred's haven't rallied more on the news. I've been adding on the recent developments because these things traded at this price a few months back before any of these developments.

[muscleman]

8)

MDL panel decision on govt's motion to consolidate cases: denied.

 

+1.  thanks luke

 

Is government allowed to appeal this decision? I searched around but couldn't find any. The panel consists of seven judges so I assume the decision is final.

[merkhet]

http://www.jpml.uscourts.gov/sites/jpml/files/28_usc_1407.pdf

 

There shall be no appeal or review of an order of the panel denying a motion to transfer for consolidated or coordinated proceedings.

[Eye4Valu]

I don't see why the share prices in either would rally substantially based off the ruling. The ruling is better than a ruling for consolidation would have been, but it's not that big of a deal either.

[TonyG]

What happens with Pagliara's inspection of F&F books ?

[Guest cherzeca]

I don't see why the share prices in either would rally substantially based off the ruling. The ruling is better than a ruling for consolidation would have been, but it's not that big of a deal either.

 

i disagree.  i think the biggest risk in fnma before this mdl decision was not whether perry app ct would affirm, but whether if remanded, lamberth would have all cases under his fat thumb and screw Ps again.  that can't happen now. lamberth can screw perry Ps but he can't screw all Ps.

 

pagliara's cases now move forward, and they will be expedited per del corp statute re "books and records" requests

[Luke 532]

Interesting tweets from Jon Prior (Politico) attached.

[Guest cherzeca]

I don't see why the share prices in either would rally substantially based off the ruling. The ruling is better than a ruling for consolidation would have been, but it's not that big of a deal either.

 

one more point, considering hindes/jacobs.  i think this is the best case on the merits for Ps.  if the case was reassigned to lamberth, this would have the potential be a total cluster-f.  with sleet, i think getting the issue to the delaware supreme court will be more likely.

[Eye4Valu]

I guess my point is that it's beneficial but not a dispositive outcome. A reason for a rally, but not a substantial rally. Appreciate your points though Christian, they are good as always!

[Eye4Valu]

This kinda goes without saying, but I think if they win some of these cases, we'll see a substantial rally. Glad they weren't consolidated, trust me. I have a pretty penny in FNMAS/FNMA.

[doughishere]

https://twitter.com/carney/status/737666479882133505

 

What a clown. "No news", are you fucking kidding me?

 

https://twitter.com/carney/status/737668426630627333

 

Should have sold.

[doughishere]

http://twitdoc.com/view.asp?id=274193&sid=5VKH&ext=PDF&lcl=GSE-letter-to-Watt-and-Lew-6-1-16.pdf&usr=JonAPrior

Here's the June 1 letter, led by Rep. Capuano

[Guest cherzeca]

I guess my point is that it's beneficial but not a dispositive outcome. A reason for a rally, but not a substantial rally. Appreciate your points though Christian, they are good as always!

 

thanks.  i dont mean to be argumentative, but i have the sense that mr. market agreed with your point, and i just wanted to make clear that i think this panel decision has great bullshit-avoidance value

[doughishere]

Big Win for GSE Plaintiffs ToddSullivan

 

The FHFA and Treasury had tried to consolidate all the various GSE lawsuits into one. It was yet another stall tactic to delay the various suits progress in their respective courts. To some degree it worked, cases by in large were stalled pending the outcome of this panel.

 

The government lost. The cases will immediately resume and we can get on with discovery and litigation.  The WSJ will tell us of course this ruling in meaningless. I guess the question to ask them would be “if it meant nothing, why was the government trying to consolidate?” …. You can ask it but you won’t get an answer.

 

It is so sad to see how the WSJ has become ruled by a naked political bias. It opinion pages are wholly useless now for those seeking any type of impartiality. On its opinion pages you will find not a single piece that supports plaintiffs in the GSE litigation. I’ll ask the question I asked before and have not gotten an answer from them….”how is that possible?”. I only see two options: either those in charge will simply not allow it (pure editorial bias) or the entire group is plagued by a dangerous “group think”. While they have become the perfect counter to Krugman and the  NYT’s opinion pages, that still really sucks. They should want to be better ….and this is coming from a Reagan Republican….

 

From the order:

 

On the basis of the papers filed and hearing session held, we conclude that centralization is not necessary for the convenience of the parties and witnesses or to further the just and efficient conduct of the litigation. These actions arise from the agreement in August 2012 between FHFA and the Treasury Department to enter into the third amendment of their preferred stock purchase agreement. Specifically, most plaintiffs allege that the third amendment constituted a de facto nationalization of Fannie Mae and Freddie Mac that extinguished the private shareholders’ economic interests in the companies by replacing a fixed quarterly dividend with a variable dividend equal to Fannie Mae’s and Freddie Mac’s quarterly earnings, if any, less a small and decreasing capital reserve.

 

Plaintiffs opposing centralization argue that there are not sufficient common disputed facts to warrant centralization, and that discovery will be minimal. Defendants have not persuasively refuted these arguments.

[doughishere]

Conservatives May 12, 2016

http://www.housingwire.com/articles/37023-conservative-groups-join-growing-push-to-recapitalize-fannie-mae-freddie-mac

 

 

Civil Rights October 29, 2015

http://www.housingwire.com/articles/35487-major-civil-rights-groups-join-push-to-recapitalize-fannie-mae-freddie-mac

 

 

Democrats June 3, 2016

http://www.housingwire.com/articles/37186-congressional-democrats-join-push-to-recapitalize-fannie-mae-freddie-mac

 

 

Hedge Funds ---This should be obvious.

 

 

WashPo December 21, 2015

http://www.housingwire.com/articles/35874-washington-post-recapitalizing-fannie-freddie-is-a-recipe-for-housing-disaster

 

 

 

NYT---Is gretchen Pro Recap and release?...I can seem to find a specific article.

 

 

 

 

 

Seems like the Obama Administration(Edit:and the Corker Administration, Interesting what people agree on.) is the only one two out of touch with america on this issue. Just an observation. Ohh yea the WSJ is firmly entrenched with the administration........ I have said nothing anyone else hasnt. I just put it all together. politics makes strange bedfellows.

[Luke 532]

We'll have a ruling from Judge Thapar (Kentucky) the first week of July at the latest, possibly earlier.  See note 5 on the image attached.

 

"If the MDL Panel denies the motion to transfer, the Court will rule on the motions to dismiss within 30 days of receiving notice of the MDL Panel's decision from the parties."

 

The parties gave notice to Thapar this week so the clock is ticking on the maximum 30 day wait until his decision is ordered.

[Mephistopheles]

We'll have a ruling from Judge Thapar (Kentucky) the first week of July at the latest, possibly earlier.  See note 5 on the image attached.

 

"If the MDL Panel denies the motion to transfer, the Court will rule on the motions to dismiss within 30 days of receiving notice of the MDL Panel's decision from the parties."

 

The parties gave notice to Thapar this week so the clock is ticking on the maximum 30 day wait until his decision is ordered.

 

Yep, and given he's ready to give a ruling so quickly, I suspect it must mean he feels strongly about this issue one way or another. Does anybody have a guess on what his views are on such matters based on past rulings?

[Guest cherzeca]

We'll have a ruling from Judge Thapar (Kentucky) the first week of July at the latest, possibly earlier.  See note 5 on the image attached.

 

"If the MDL Panel denies the motion to transfer, the Court will rule on the motions to dismiss within 30 days of receiving notice of the MDL Panel's decision from the parties."

 

The parties gave notice to Thapar this week so the clock is ticking on the maximum 30 day wait until his decision is ordered.

 

 

Yep, and given he's ready to give a ruling so quickly, I suspect it must mean he feels strongly about this issue one way or another. Does anybody have a guess on what his views are on such matters based on past rulings?

 

Couldn't find much. He does have affiliation with federalist society fwiw. My sense is that if Ps wanted to consolidate with him they have a good view as to how he is disposed.

[Luke 532]

http://www.valueplays.net/2016/06/06/the-one-thing-democrats-and-republicans-increasingly-agree-on/

[Eye4Valu]

Todd's been smoking the hopium. I think the WaPo article reflects Washington's thinking at the current moment.

[Eye4Valu]

Bruce highlights that Washington's thinking is changing, slowly but surely.

 

Dear Investor,

 

Last week we witnessed further progress with respect to our investments in Fannie Mae and Freddie Mac.

 

The United States Judicial Panel on Multidistrict Litigation denied the government’s attempt to consolidate individual lawsuits from around the country. Cases brought in Delaware, Kentucky, Illinois, and Iowa will now proceed in their respective districts.

 

The Court of Federal Claims continues to shine a bright light on the defendants’ misdeeds by unsealing dozens of incriminating government documents, and the Court is now focused on the remaining stash of 12,000 documents that the government has refused to turn over and that we believe will further prove our claims.

 

Our Congress is waking up to the disingenuous behavior of the current Administration toward Fannie Mae and Freddie Mac and its negative effects on all constituents. On June 1, 32 Congressional Democrats sent a letter to Federal Housing Finance Agency (“FHFA”) Director Mel Watt and Treasury Secretary Jacob Lew expressing their “concerns about your agencies’ policy of requiring Freddie Mac and Fannie Mae to operate without adequate capital,” and emphasizing that the Housing and Economic Recovery Act of 2008 (“HERA”) “includes a number of provisions expressing Congress’ intent that the GSEs be operated in a safe and sound manner … The fact that the GSEs are currently in conservatorship, and that Congress has not enacted further legislation post-HERA, does not justify an agreement between FHFA and the U.S. Treasury to ignore HERA’s mandate.”

 

The court of public opinion is beginning to understand Fannie Mae and Freddie Mac's outstanding performance during both good and bad economic times – when the companies are allowed to function without political interference.

 

It is outrageous that two profitable shareholder-owned companies remain captive in the longest government conservatorship in history, one in which the government has usurped over $250 billion from the conservatees and threatens to destroy what many believe is the most productive credit market in the world. You can't make this up.

 

In the coming weeks, we anticipate further legal developments in the D.C. Court of Appeals and U.S. District Court for the Eastern District of Kentucky, among others.

 

We also expect Fannie Mae and Freddie Mac to continue their progress in sensibly serving residential mortgage markets and homeowners.

 

The facts, law, and common sense dictate that we will win this fight.

 

Kind regards,

 

Investor Relations

 

To view the Order Denying Transfer linked above, please use the following website address: http://www.fairholmefundsinc.com/Documents/Order20160602.pdf

 

To view the Letter from Congressional Democrats linked above, please use the following website address: http://www.fairholmefundsinc.com/Documents/Letter20160601.pdf

 

 

Fairholme Funds, Inc.

4400 Biscayne Blvd.

9th Floor

Miami, FL 33137