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

[Midas79]

I haven't read the opinion yet, will try to do so soon. I thought the Collins case was another angle of attack, so how does the Perry appeal opinion factor into this? It seems to be yet another lazy decision based on Lamberth.

[SnarkyPuppy]

I haven't read the opinion yet, will try to do so soon. I thought the Collins case was another angle of attack, so how does the Perry appeal opinion factor into this? It seems to be yet another lazy decision based on Lamberth.

 

"Rule of law" / "this is unfair" thesis continues to get obliterated.  I'm not happy about it, but let's call a spade a spade. 

[muscleman]

I continue to get stunned. I thought Collin's case is really strong, given the ruling on CFPB.

On the other hand, this may not be that bad. If Watt went Rogue, that implies that he may be disagreeing with Mnuchin, and Watt seems to be the only politician standing for FnF at this moment.

[orthopa]

Court cases continue to disappoint.  Sweeney up next.  The issue with the court cases is any decision may come long after reform signed off on.

 

A political/legislative solution may have originally seemed riskier then a court or rule of law outcome but looks to be just the opposite now as the court case losses piling up.

 

More waiting....

 

 

[Guest cherzeca]

very cursory treatment by judge atlas of the collins constitutional claim.  she knows collins will appeal, so she will let the apeals court handle this...likely after the dc circuit en banc in PHH...and maybe ultimately in scotus

[waynepolsonAtoZ]

"hedge fund ownership is an issue for pols when the little red light is on."

 

FHFA forced FnF stocks off the NYSE.

 

FnF are huge firms with many millions of shares outstanding.

 

They moved to OTC BB. OTC is an over the counter market and relatively illiquid compared to the NYSE.

 

Banks more-or-less had to sell.

 

Hedge funds took their place.

 

And then they complain about the hedge funds owning FnF stocks. LOL. IMHO.

[Desert_Rat]

very cursory treatment by judge atlas of the collins constitutional claim.  she knows collins will appeal, so she will let the apeals court handle this...likely after the dc circuit en banc in PHH...and maybe ultimately in scotus

 

You really there's a chance SCOTUS takes this, takes any of this? I don't. But if it did, that must mean freedom. No reason why it would take any of it unless against US govt.

 

[Flynnstone5]

very cursory treatment by judge atlas of the collins constitutional claim.  she knows collins will appeal, so she will let the apeals court handle this...likely after the dc circuit en banc in PHH...and maybe ultimately in scotus

 

Does anyone here thinks we will lose Delaware and Sweeney case?

 

It doesn't matter because there's probably no chance in hell that the outcome is determined through litigation. All analysis has been completely wrong.

[Guest cherzeca]

very cursory treatment by judge atlas of the collins constitutional claim.  she knows collins will appeal, so she will let the apeals court handle this...likely after the dc circuit en banc in PHH...and maybe ultimately in scotus

 

You really there's a chance SCOTUS takes this, takes any of this? I don't. But if it did, that must mean freedom. No reason why it would take any of it unless against US govt.

 

depending on how dc circuit rules en banc in PHH, i definitely think scotus will hear PHH

[Guest cherzeca]

very cursory treatment by judge atlas of the collins constitutional claim.  she knows collins will appeal, so she will let the apeals court handle this...likely after the dc circuit en banc in PHH...and maybe ultimately in scotus

 

Does anyone here thinks we will lose Delaware and Sweeney case?

 

It doesn't matter because there's probably no chance in hell that the outcome is determined through litigation. All analysis has been completely wrong.

 

i think congress is not focused on settling litigation in connection with reform.  i think watt/mnuchin have it on their radar, but it is not a big concern unless and until govt loses one case.  at some point though, late in reform process, i think the existence of outstanding litigation will be something that will have to be settled in order to raise new capital. and there will be outstanding litigation for a long while

[beaufort]

It seems to me that the Sweeney court of federal claims is the most straight forward action set to proceed.  Perry helps Sweeney in some respects.  Once the business of clarifying that contractual rights are transferable is sorted out, the Sweeney is ready to go.  The documents are being produced in her court.  What is the timeline for the trial in Sweeney?  I am assuming a summary trial for that as well. 

 

A win with Sweeney gets everybody to the settlement table in my view.  I suppose that is true of any of the cases, but I want to emphasize that a win for the prefs also get the common to the settlement table as well.  If we lose with Sweeney, look out below.

[orthopa]

very cursory treatment by judge atlas of the collins constitutional claim.  she knows collins will appeal, so she will let the apeals court handle this...likely after the dc circuit en banc in PHH...and maybe ultimately in scotus

 

Does anyone here thinks we will lose Delaware and Sweeney case?

 

It doesn't matter because there's probably no chance in hell that the outcome is determined through litigation. All analysis has been completely wrong.

 

i think congress is not focused on settling litigation in connection with reform.  i think watt/mnuchin have it on their radar, but it is not a big concern unless and until govt loses one case.  at some point though, late in reform process, i think the existence of outstanding litigation will be something that will have to be settled in order to raise new capital. and there will be outstanding litigation for a long while

 

Chris

 

How would outstanding litigation be handled say if reform goes through, shareholders get screwed but for some reason 2-3 years from now a court rules favorably for shareholders. Where would relief come from if say FnF is liquidated and new companies are formed?

[Flynnstone5]

I just don't see where outstanding litigation has any leverage when you have a litany of lost court cases. If we get closer to Jan 2018 and most cases have been lost, the only leverage I can see is possibly with Fairholme and what is to say the gov can't settle with them and simply screw the rest of us? Hoping that doesn't happen and it wouldn't be normal by any measure, but the whole situation just continues to take turns no one would have thought possible even six months ago.

[SnarkyPuppy]

I just don't see where outstanding litigation has any leverage when you have a litany of lost court cases. If we get closer to Jan 2018 and most cases have been lost, the only leverage I can see is possibly with Fairholme and what is to say the gov can't settle with them and simply screw the rest of us? Hoping that doesn't happen and it wouldn't be normal by any measure, but the whole situation just continues to take turns no one would have thought possible even six months ago.

 

I'm seriously worried about a private settlement.  Not sure the nuances of timing between the announcement of the settlement and ceasing trading of the shares on the OTC, but in theory you settle the cases with the existing plaintiffs and wipe the current shares so no new hedge funds can sweep in and restart the process. 

[muscleman]

Regarding Fairholme, I really think Bruce is backed to the corner.

 

Let me ask everyone a question like this:

If you start a fund with 100 million cash, would you put 35% of your money into FnF preferred today at this price?

 

My own answer would be no, but he couldn't sell due to the low liquidity. He is pretty much being forced to be set up as a Hero or Zero situation. Same for SHLD.

 

[investorG]

Regarding Fairholme, I really think Bruce is backed to the corner.

 

Let me ask everyone a question like this:

If you start a fund with 100 million cash, would you put 35% of your money into FnF preferred today at this price?

 

My own answer would be no, but he couldn't sell due to the low liquidity. He is pretty much being forced to be set up as a Hero or Zero situation. Same for SHLD.

 

yes.  maybe a tad less like 20-25pct, and a mix of common and preferred.

[investorG]

very cursory treatment by judge atlas of the collins constitutional claim.  she knows collins will appeal, so she will let the apeals court handle this...likely after the dc circuit en banc in PHH...and maybe ultimately in scotus

 

Does anyone here thinks we will lose Delaware and Sweeney case?

 

let's put it this way - I don't expect a win.  to me, more relevant for any document releases and a backdrop that facilitates an eventual settlement (not any time soon).

[SnarkyPuppy]

Considering moving my total position to Fairholme given my (legally inept) concerns re: private settlement.  Don't really love exposure to Sears though (I can't short for personal reasons). 

[investorG]

I just don't see where outstanding litigation has any leverage when you have a litany of lost court cases. If we get closer to Jan 2018 and most cases have been lost, the only leverage I can see is possibly with Fairholme and what is to say the gov can't settle with them and simply screw the rest of us? Hoping that doesn't happen and it wouldn't be normal by any measure, but the whole situation just continues to take turns no one would have thought possible even six months ago.

 

I'm seriously worried about a private settlement.  Not sure the nuances of timing between the announcement of the settlement and ceasing trading of the shares on the OTC, but in theory you settle the cases with the existing plaintiffs and wipe the current shares so no new hedge funds can sweep in and restart the process.

 

most people don't go out of their way to be nasty to others.  even though some unnamed journalists and senators might, i'm betting that the general consensus in the end will provide solid benefits to public shareholders (although paling in comparison to the gov'ts windfall) relative to current price levels.  we're betting on the American spirit here, imo.

[Guest cherzeca]

very cursory treatment by judge atlas of the collins constitutional claim.  she knows collins will appeal, so she will let the apeals court handle this...likely after the dc circuit en banc in PHH...and maybe ultimately in scotus

 

Does anyone here thinks we will lose Delaware and Sweeney case?

 

It doesn't matter because there's probably no chance in hell that the outcome is determined through litigation. All analysis has been completely wrong.

 

i think congress is not focused on settling litigation in connection with reform.  i think watt/mnuchin have it on their radar, but it is not a big concern unless and until govt loses one case.  at some point though, late in reform process, i think the existence of outstanding litigation will be something that will have to be settled in order to raise new capital. and there will be outstanding litigation for a long while

 

Chris

 

How would outstanding litigation be handled say if reform goes through, shareholders get screwed but for some reason 2-3 years from now a court rules favorably for shareholders. Where would relief come from if say FnF is liquidated and new companies are formed?

 

it is hard to predict the scenario.  all i think i know is that mnuchin and phillips understand the capital markets and i think they appreciate that new money would like to come into a settled and clean situation.  indeed, i think the reason mnuchin got phillips on board is that phillips knows how to raise money and can interface with wall street.  when mnuchin says that he wants taxpayers to be insulated from risk and that there should be sufficient secondary market liquidity, i just dont know how this is possible unless you raise alot of equity capital, and i dont see that happening if shareholders are still pursuing claims.  congress probably thinks that gses can do credit risk transfers for all capital required, but that is a drop in bucket of what is needed for liquidity.

[investorG]

It seems to me that the Sweeney court of federal claims is the most straight forward action set to proceed.  Perry helps Sweeney in some respects.  Once the business of clarifying that contractual rights are transferable is sorted out, the Sweeney is ready to go.  The documents are being produced in her court.  What is the timeline for the trial in Sweeney?  I am assuming a summary trial for that as well. 

 

A win with Sweeney gets everybody to the settlement table in my view.  I suppose that is true of any of the cases, but I want to emphasize that a win for the prefs also get the common to the settlement table as well.  If we lose with Sweeney, look out below.

 

timeline for a positive resolution of Sweeney + any appeals seems years away.  imo we need a legislative / admin resolution and/or one of the 4 appeals courts (st louis, Chicago, Cincinnati, and eventually texas) to side with judge brown (she's already laid out the argument, no need for additional work).

[investorG]

not bad news that the trump budget release (in the analytical perspectives section) removes all the harsh language from Obama's admin regarding winding down the GSEs and notes that the future $200bn+ of expected revenues from the GSEs is subject to revision based on potential reform efforts.

[Flynnstone5]

Probably crazy, but there's a part of me that wants to load some shares on FNMAS.

[SnarkyPuppy]

"Trump budget estimates $fnma and $fmcc will give $142bn for "deficit reduction" over next 10 years under NWS; http://bit.ly/2rMPqj4 "

[Luke 532]

Probably crazy, but there's a part of me that wants to load some shares on FNMAS.

 

That's the wise part of you that wants to do that.