no_free_lunch Posted March 27, 2017 Share Posted March 27, 2017 The problem I have with the obamacare/fannie link is the US ran a trillion dollar deficit per year under Obama. So it's not like everything was perfectly balanced to begin with. It wasn't plugged with anything other than debt the way I see it. The only value to this stuff, in my opinion, is to gauge what the Trump admin might do. If you start to see it enough about this in the media it could be him prepping the public for a recap of fannie mae. Link to comment Share on other sites More sharing options...
REDACTED Posted March 27, 2017 Share Posted March 27, 2017 Assuming the ruling stands up to en banc review the CFPB owes it's continued existence to the severability clause in Dodd-Frank. What is likely to occur with the FHFA as HERA has no such clause? Link to comment Share on other sites More sharing options...
Desert_Rat Posted March 28, 2017 Share Posted March 28, 2017 https://www.bloomberg.com/news/articles/2017-03-28/fannie-freddie-fix-is-focus-of-senators-push-across-party-lines Link to comment Share on other sites More sharing options...
rros Posted March 28, 2017 Share Posted March 28, 2017 https://www.bloomberg.com/news/articles/2017-03-28/fannie-freddie-fix-is-focus-of-senators-push-across-party-lines It is likely that Corker is seeking to extend his jumpstart fix to continue to handcuff Treasury. Link to comment Share on other sites More sharing options...
Luke 532 Posted March 28, 2017 Share Posted March 28, 2017 Former FDIC chairman article today on the GSE's... https://www.americanbanker.com/opinion/a-no-brainer-for-trump-team-recapitalize-the-gses Link to comment Share on other sites More sharing options...
muscleman Posted March 28, 2017 Share Posted March 28, 2017 https://seekingalpha.com/article/4058468-favorable-landscape-investors-seen-yet Compare these two. Most are the same but FnF is added in 2017. This was done days after they met Trump+Mnuchin. Seems to indicate something? https://www.icba.org/news-events/press-releases/2017/03/16/icba-announces-2017-community-banking-policy-priorities https://www.icba.org/news-events/latest-news/2016/03/08/icba-announces-2016-community-banking-policy-priorities Link to comment Share on other sites More sharing options...
undervalued Posted March 28, 2017 Share Posted March 28, 2017 Anyone adding more to FNMAS? It's been trading at its lowest since Trump's election last Nov. Link to comment Share on other sites More sharing options...
beaufort Posted March 28, 2017 Share Posted March 28, 2017 I added to FMCKJ last week. I view the higher yielders as interchangeable (FNMAS, FNMAT, FMCKJ) and the lower yielders as interchange as well (FMCCH, FMCCK etc). I also don't distinguish between Fannie and Freddie. I have added sporadically based on price since the election. Link to comment Share on other sites More sharing options...
Guest cherzeca Posted March 28, 2017 Share Posted March 28, 2017 new SA article by rule of law guy: https://seekingalpha.com/article/4058606-fannie-freddie-litigation-thesis-remains-viable-perry?app=1&auth_param=16s4kh:1cdlfbu:337ae6bdd0f8c73b14c49bff34db4990&uprof=44&dr=1 Link to comment Share on other sites More sharing options...
TonyG Posted March 28, 2017 Share Posted March 28, 2017 missed that guy Link to comment Share on other sites More sharing options...
beaufort Posted March 28, 2017 Share Posted March 28, 2017 I am enthused by the following from ROLG's article re capacity to issue senior prefs [edit: with the terms of the NWS]: However, it is clear that Perry majority held this in the context of Perry plaintiff claims that the NWS violated the conservator's duty to rehabilitate, and preserve and conserve assets. Hindes/Jacobs asserts a wholly different claim, that the NWS violated the conservator's power to issue preferred stock, a claim nowhere made by Perry plaintiffs and nowhere considered by the Perry circuit court. Hindes/Jacob's claim invites no second-guessing of the conservator's business judgment negotiating stock terms under a broad discretionary grant of conservator power to manage FNMA's business under conservatorship, but simply a focused analysis as to whether the applicable statutory law relating to permissible stock terms has been violated. HERA mandated that FHFA shall step into FNMA directors' shoes, and the FHFA's power to include any particular terms in an issue of preferred stock must be measured by the power FNMA directors had to issue preferred stock having such terms. These are Delaware corporate law shoes, and they are ill-suited to fit the terms of the NWS. Link to comment Share on other sites More sharing options...
Desert_Rat Posted March 28, 2017 Share Posted March 28, 2017 FNMAS... FMCKJ... Maybe I'll proven wrong on others crazy dividend dreams but I won't pay 40% more, and usually higher, for the same stuff. For example, FMCCJ ($50) cost $8.51 today. When I add, I always add the lowest cost stuff. Link to comment Share on other sites More sharing options...
Desert_Rat Posted March 28, 2017 Share Posted March 28, 2017 I am enthused by the following from ROLG's article re capacity to issue senior prefs: However, it is clear that Perry majority held this in the context of Perry plaintiff claims that the NWS violated the conservator's duty to rehabilitate, and preserve and conserve assets. Hindes/Jacobs asserts a wholly different claim, that the NWS violated the conservator's power to issue preferred stock, a claim nowhere made by Perry plaintiffs and nowhere considered by the Perry circuit court. Hindes/Jacob's claim invites no second-guessing of the conservator's business judgment negotiating stock terms under a broad discretionary grant of conservator power to manage FNMA's business under conservatorship, but simply a focused analysis as to whether the applicable statutory law relating to permissible stock terms has been violated. HERA mandated that FHFA shall step into FNMA directors' shoes, and the FHFA's power to include any particular terms in an issue of preferred stock must be measured by the power FNMA directors had to issue preferred stock having such terms. These are Delaware corporate law shoes, and they are ill-suited to fit the terms of the NWS. I thought the original agreement disallowed further equity raises. The following covenants apply to the GSEs as part of the agreements. Without the prior consent of the Treasury, the GSEs shall not: Make any payment to purchase or redeem its capital stock, or pay any dividends, including preferred dividends (other than dividends on the senior preferred stock) Issue capital stock of any kind Enter into any new or adjust any existing compensation agreements with “named executive officers” without consulting with Treasury Terminate conservatorship other than in connection with receivership Sell, convey or transfer any of its assets outside the ordinary course of business except as necessary to meet their obligation under the agreements to reduce their portfolio of retained mortgages and mortgage backed securities Increase its debt to more than 110% of its debt as of June 30, 2008 Acquire or consolidate with, or merge into, another entity. https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/2008-8-7_SPSPA_FactSheet_508.pdf Link to comment Share on other sites More sharing options...
Guest cherzeca Posted March 29, 2017 Share Posted March 29, 2017 @rat this relates to the NWS, which is an amendment to the spsp agt. Link to comment Share on other sites More sharing options...
waynepolsonAtoZ Posted March 29, 2017 Share Posted March 29, 2017 "When I add, I always add the lowest cost stuff." I like to have a few shares of FMCKJ/FNMAS just in case I need to raise some cash quick. Link to comment Share on other sites More sharing options...
Sunrider Posted March 29, 2017 Share Posted March 29, 2017 new SA article by rule of law guy: https://seekingalpha.com/article/4058606-fannie-freddie-litigation-thesis-remains-viable-perry?app=1&auth_param=16s4kh:1cdlfbu:337ae6bdd0f8c73b14c49bff34db4990&uprof=44&dr=1 Chris - do you agree with this fellow's legal analysis? Thanks. Link to comment Share on other sites More sharing options...
Desert_Rat Posted March 29, 2017 Share Posted March 29, 2017 @rat this relates to the NWS, which is an amendment to the spsp agt. Yes, but how could the NWS 'violate the conservator's power to issue preferred stock' if issuing such stock was already forbidden? Link to comment Share on other sites More sharing options...
Luke 532 Posted March 29, 2017 Share Posted March 29, 2017 new SA article by rule of law guy: https://seekingalpha.com/article/4058606-fannie-freddie-litigation-thesis-remains-viable-perry?app=1&auth_param=16s4kh:1cdlfbu:337ae6bdd0f8c73b14c49bff34db4990&uprof=44&dr=1 Chris - do you agree with this fellow's legal analysis? Thanks. My hunch is they have the exact same opinion :) Link to comment Share on other sites More sharing options...
waynepolsonAtoZ Posted March 29, 2017 Share Posted March 29, 2017 "Chris - do you agree with this fellow's legal analysis?" What can he say about his legal analysis? Link to comment Share on other sites More sharing options...
DocSnowball Posted March 29, 2017 Share Posted March 29, 2017 It is an interesting read - I've been struggling with whether this investment has a margin of safety, or is speculative after Perry. If the judgment is based on reasonable expectations at time of purchase, what was reasonable expectation for a purchase post 2008? Mine after reading prospectus and reviewing earnings reports was that one day in the future either recap or liquidation will occur and the shares are not worthless. Hard to stand by that conviction after Lamberth and Perry. Must be hard looking at this as a lawyer! Even the non lawyers like me are still stunned by this ruling. Link to comment Share on other sites More sharing options...
PLynchJr Posted March 29, 2017 Share Posted March 29, 2017 How can anyone reasonably think this has any margin of safety? Is it really up for discussion whether this is speculative or not? A big fat zero on this investment is entirely possible. :o Link to comment Share on other sites More sharing options...
DocSnowball Posted March 29, 2017 Share Posted March 29, 2017 One scenario for zero is if nationalized. Others? Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted March 29, 2017 Share Posted March 29, 2017 How can anyone reasonably think this has any margin of safety? Is it really up for discussion whether this is speculative or not? A big fat zero on this investment is entirely possible. :o Every investment has the potential to be a zero. The question is what is the probability? Most members in on the trade obviously believe that the probability is more remote than you want seem to think it is. Link to comment Share on other sites More sharing options...
Eye4Valu Posted March 29, 2017 Share Posted March 29, 2017 I agree with Christian, a.k.a. Rule of Law Guy, that other legal avenues remain. I have always thought the U.S. Court of Claims was the most important legal avenue, even before Perry. Others liked the chances in Perry, but probably hoped for a quick payoff more than anything. Let's see what Mnuchin and Sweeney do. Hindes/Jacobs and Collins could certainly be helpful. It's always darkest before dawn. Link to comment Share on other sites More sharing options...
Spekulatius Posted March 29, 2017 Share Posted March 29, 2017 One scenario for zero is if nationalized. Others? If the zombie status remains as it is right now, the common and preferred are zeros too, it just will take a long time until all hope isn't gone and the stock prices adjust accordingly. Link to comment Share on other sites More sharing options...
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