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

[Mephistopheles]

I think what's interesting is the following:

 

Perhaps more importantly, were FHFA Director Mel Watt to act unilaterally, the political backlash from Capitol Hill could put housing at even greater risk.

 

Is there chatter that Mel Watt is thinking about acting unilaterally?

 

Maybe they were referring to his comments from a few months ago?

 

It's amazing. The head of the FHFA, which technically has full control of the conservatorship according to the Government, has made it clear that the he wants the cship to end. And yet it's obvious there is no chance of that happening outside of the Courts.

 

Shouldn't this make it clear that FHFA is not acting independently??

[merkhet]

Well, Watt has thus far also said he thinks that Congress needs to enact reform.

[Guest cherzeca]

Well, Watt has thus far also said he thinks that Congress needs to enact reform.

 

he also said in a house finance hearing that the agreement (NWS) trumped the law (HERA).

 

GSE reform is cheap when treasury owns everything.  let's see what corker/hensarling (and stevens) think when NWS is vacated and shareholders have to be bought out to kill GSEs

[doughishere]

http://www.bloomberg.com/politics/articles/2016-06-14/clinton-advisers-mortgage-plan-would-tap-investors-for-billions

 

Clinton Advisers’ Mortgage Plan Would Tap Investors for Billions

 

 

 

 

Left unstated is how to deal with current shareholders, who include hedge funds and money managers who are locked in a bitter legal battle with the government over profits generated by the mortgage-finance giants.

[merkhet]

So, globally, we raised $196 billion in IPOs in 2015 versus $249 billion in IPOs in 2014. And people think they can IPO one company w/ $100 billion of private capital in a single year? I want some of what those people are smoking...

 

2014 - http://for.tn/1UxziYM

2015 - http://bit.ly/1QrAM9J

[doughishere]

So, globally, we raised $196 billion in IPOs in 2015 versus $249 billion in IPOs in 2014. And people think they can IPO one company w/ $100 billion of private capital in a single year? I want some of what those people are smoking...

 

 

Two of the papers’ authors, former White House officials Gene Sperling and Jim Parrott, have advised her campaign on housing policy.

[Luke 532]

http://www.bloomberg.com/politics/articles/2016-06-14/clinton-advisers-mortgage-plan-would-tap-investors-for-billions

 

Joe Light, author of that piece, apparently left the WSJ.

[Mephistopheles]

Does anyone follow Josh Rosner on Twitter? Apparently his account was banned and it had something to do with the GSEs? @joshrosner

[doughishere]

So, globally, we raised $196 billion in IPOs in 2015 versus $249 billion in IPOs in 2014. And people think they can IPO one company w/ $100 billion of private capital in a single year? I want some of what those people are smoking...

 

2014 - http://for.tn/1UxziYM

2015 - http://bit.ly/1QrAM9J

 

 

Merk, it goes to my theory that everyone wants to be a finance guy at some point in their lives. I actually came up with it after Obama;s speach where he was mocking GS.

 

 

GS will be the ones laughing to the  bank when they end up placing a large part of the IPO...if it happens.

 

 

 

Whats the adage? cant live with, cant kill.

[Steve_Berk]

This is one of the best summaries of the problems inherent in the questions asked during the Perry oral arguments: http://www.fidererongses.com/params/post/885629/oral-arguments-in-perry-capital-v-us-devolved-into-nonsense

 

I really hope that the judges have done more homework since oral arguments

[merkhet]

This is one of the best summaries of the problems inherent in the questions asked during the Perry oral arguments: http://www.fidererongses.com/params/post/885629/oral-arguments-in-perry-capital-v-us-devolved-into-nonsense

 

I really hope that the judges have done more homework since oral arguments

 

Good summary. It's part of why I like the breach of K question more than the APA question. That one is very simple. Is there contract? Has it been breached? (roughly translates to is there a liquidation occurring that evades the preferreds' liquidation preference?)

[Guest cherzeca]

So, globally, we raised $196 billion in IPOs in 2015 versus $249 billion in IPOs in 2014. And people think they can IPO one company w/ $100 billion of private capital in a single year? I want some of what those people are smoking...

 

2014 - http://for.tn/1UxziYM

2015 - http://bit.ly/1QrAM9J

 

yes and no.

 

ipos are generally growth speculations (as you know).  a GSE offering would have $15B of cash flow behind it.  same re aramco.  that will be a big ipo, tho saudis wont like price when market discounts for geopolitical risk.

 

after all, after NWS voided, if GSEs are to recap, a very big offering would be needed.  real point here, imo, is pershing's point, which is finance is built on trust, and there is no way GSEs raise money on the backs of a valid NWS.

[doughishere]

So, globally, we raised $196 billion in IPOs in 2015 versus $249 billion in IPOs in 2014. And people think they can IPO one company w/ $100 billion of private capital in a single year? I want some of what those people are smoking...

 

2014 - http://for.tn/1UxziYM

2015 - http://bit.ly/1QrAM9J

 

yes and no.

 

ipos are generally growth speculations (as you know).  a GSE offering would have $15B of cash flow behind it.  same re aramco.  that will be a big ipo, tho saudis wont like price when market discounts for geopolitical risk.

 

after all, after NWS voided, if GSEs are to recap, a very big offering would be needed.  real point here, imo, is pershing's point, which is finance is built on trust, and there is no way GSEs raise money on the backs of a valid NWS.

 

 

I wonder if the bill would take into account the warrants that the govt...after all they do already own 80% of the company.....er....79,9%

[doughishere]

Does anyone follow Josh Rosner on Twitter? Apparently his account was banned and it had something to do with the GSEs? @joshrosner

 

Account Suspended. He was probably trolling Carney too much.

[Guest cherzeca]

This is one of the best summaries of the problems inherent in the questions asked during the Perry oral arguments: http://www.fidererongses.com/params/post/885629/oral-arguments-in-perry-capital-v-us-devolved-into-nonsense

 

I really hope that the judges have done more homework since oral arguments

 

i agree, a good summary of the contra side.  you can go to questioning of fhfa and in particular treasury to see the pro side.  but i wont quibble, millet and ginsburg were exercising their muscles. question is where ginsburg ends up.  i do hope all judges read all briefs carefully.

[Guest cherzeca]

another thought on ginsburg and the oral argument, and a couple of other things on my mind

 

i havent spent much time with the oral argument in the past month, as you can go around in circles trying to see a firm position among the judges, and indeed, i dont think the judges really wanted to establish a firm position for themselves at the oral argument stage.  my thought about ginsburg is that while he was contemplating the reasonableness of the conservator's actions in his questioning of olson, i think he was struggling with the text of the statute in his questioning of fhfa and treasury.  recall his comment of some exasperation that treasury was flying at 30,000 feet while we have to deal with the terms of the statute.  in this regard, i do think he is going to do a careful reading of the statute and briefs and i am hopeful he pays close attention to the IU amicus, written by the former fdic general counsel, as so much of HERA was based on the FDIC act.

 

since MDL panel's decision, thapar (robinson) has already scheduled briefing and oral argument at request of parties, and sleet (hindes/jacobs), with a pending request for oral argument, well just crickets.  this annoys me as i believe hindes/jacobs is the strongest case of the lot.

 

the saxton case is also moving ahead after MDL panel decision, though more slowly than robinson, and judge reade approved an interesting order in terms of page length of the supplemental briefing:

 

ORDER granting re 81 Joint MOTION for Leave to File Supplemental Brief and to Set Briefing Schedule and Page Limitations as to 76 MOTION to Dismiss Amended Complaint : FHFA's supplemental brief in support of its Motion to Dismiss shall be filed no later than 6/16/16 and shall not exceed eight pages in length. Plaintiffs' resistance shall be filed no later than 6/30/2016 and shall not exceed eighty-eight pages in length. Defendants' reply shall be filed no later than 8/1/2016 and shall not exceed twenty-five pages in length. Signed by Chief Judge Linda R Reade on 6/13/16. (ksy) (Entered: 06/13/2016)

 

88 page length for the P resistance (as she calls it)....hm, wonder if P is going to add a motion for summary judgement, told the judge that, and she incorporated that into this somewhat unusual briefing limit, compared with govt's 8 page brief limit (probably limited to the regulatory capital claim ginned up by ginsburg).

[Steve_Berk]

This is a really good way to put it. What I'm trying to figure out is if he reads the statute the way we think it should be read, in what scenario could the motivation of the conservator bring them into compliance with the statute (he seemed to indicate that the record could show some permissible intent)? The statute doesn't say 'make a good faith effort' .... The way I see it, motivation of the conservator can serve as evidence that their actions which appear completely contrary to the statute were indeed executed for reasons that were also contrary to the statute. But to me, that doesn't mean that if they had the best of intentions that their actions that were prohibited by the statute would be ok.

 

my thought about ginsburg is that while he was contemplating the reasonableness of the conservator's actions in his questioning of olson, i think he was struggling with the text of the statute in his questioning of fhfa and treasury.  recall his comment of some exasperation that treasury was flying at 30,000 feet while we have to deal with the terms of the statute.  in this regard, i do think he is going to do a careful reading of the statute and briefs and i am hopeful he pays close attention to the IU amicus, written by the former fdic general counsel, as so much of HERA was based on the FDIC act.

[Guest cherzeca]

epstein:  http://www.forbes.com/sites/richardepstein/2016/06/15/untangling-the-gse-foolishness-the-d-c-circuit-should-upend-treasurys-net-worth-sweep/#5980c0713dbf

[doughishere]

epstein:  http://www.forbes.com/sites/richardepstein/2016/06/15/untangling-the-gse-foolishness-the-d-c-circuit-should-upend-treasurys-net-worth-sweep/#5980c0713dbf

 

been  a while

[Guest cherzeca]

"The way I see it, motivation of the conservator can serve as evidence that their actions which appear completely contrary to the statute were indeed executed for reasons that were also contrary to the statute. But to me, that doesn't mean that if they had the best of intentions that their actions that were prohibited by the statute would be ok."

 

i think ginsburg was trying to see if olson was amenable to a simple remand, for further fact-finding which lord knows can go either way, and olson wasnt biting.  i do believe that ginsburg wasnt buying the lamberth theme that facts are irrelevant because motivation was irrelevant, which leads me to believe that remand, at least, will occur.

[Mephistopheles]

cherzeca, merkhet: I was wondering what your opinions are on how much the District Court cases of Illinois, Kentucky, Iowa, and Washington DC are influenced by each other? Meaning, say the appeals court in DC affirm's Lamberth, effectively killing that case for us. How much precedence could that possibly hold over Judge Thapur in KY? I know that anything can happen, but I'm trying to assess how much risk/reward benefit the shareholders have gained by having these cases diversified.

 

Of course we have Delaware and the Claims Court which are completely separate matters, so that's diversification as well.

[doughishere]

epstein:  http://www.forbes.com/sites/richardepstein/2016/06/15/untangling-the-gse-foolishness-the-d-c-circuit-should-upend-treasurys-net-worth-sweep/#5980c0713dbf

 

 

I have so much more faith in Epstein than Olsen. They should make him lead counsel.

 

 

Edit: Theres nothing wrong with Olsen, I just think he lacks the delivery.  He needs to summon his inner Johnny Cochran if hes going to sell this.

[doughishere]

Does anyone follow Josh Rosner on Twitter? Apparently his account was banned and it had something to do with the GSEs? @joshrosner

 

Account Suspended. He was probably trolling Carney too much.

 

Rumors about say he threatened another user. That's why it was suspended. I can't confirm with a second source, though.

[merkhet]

epstein:  http://www.forbes.com/sites/richardepstein/2016/06/15/untangling-the-gse-foolishness-the-d-c-circuit-should-upend-treasurys-net-worth-sweep/#5980c0713dbf

 

 

I have so much more faith in Epstein than Olsen. They should make him lead counsel.

 

 

Edit: Theres nothing wrong with Olsen, I just think he lacks the delivery.  He needs to summon his inner Johnny Cochran if hes going to sell this.

 

Epstein is a professor. He gets to craft his argument sitting at a desk in front of a computer. It's a different thing to stand in the colosseum.

[doughishere]

epstein:  http://www.forbes.com/sites/richardepstein/2016/06/15/untangling-the-gse-foolishness-the-d-c-circuit-should-upend-treasurys-net-worth-sweep/#5980c0713dbf

 

 

I have so much more faith in Epstein than Olsen. They should make him lead counsel.

 

 

Edit: Theres nothing wrong with Olsen, I just think he lacks the delivery.  He needs to summon his inner Johnny Cochran if hes going to sell this.

 

Epstein is a professor. He gets to craft his argument sitting at a desk in front of a computer. It's a different thing to stand in the colosseum.

 

Yeah but do you think Epstein would have been better?

 

Respectfully, I truly mean it's with the utmost respect, Olsen is a much better; harder working person than I will ever be But when he went out there he just sounded un-prepared like he crammed for the exam the night before. Epstein has history with the shareholders(yes, as a paid consultant) and that would have at least superficially been better. Especially when it came to some of the questions.

 

 

Who knows maybe Epstein sucks at oral arguments? He's very good on some podcast.

 

The other thing I would note is I think like apple hired Olsen to that big fbi case so I feel like he's more of a figurehead at this point. Who knows? But it's the Judges job to look though that.

 

 

I just share my thoughts even if they are only that....anyone see a dead horse around here?