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

[investorG]

I wonder if corker / warner's true motives are hurting shareholders or just hoping for more competition and other changes which benefit the banks?  If it's the latter then there's likely still room for a win-win if shareholders' expectations are reasonable.  I know many will say the former, and that's possible, but are their negative comments (hedge funds, etc) only a mechanism to achieve their goals rather than their core feelings?

[merkhet]

I wonder if corker / warner's true motives are hurting shareholders or just hoping for more competition and other changes which benefit the banks?  If it's the latter then there's likely still room for a win-win if shareholders' expectations are reasonable.  I know many will say the former, and that's possible, but are their negative comments (hedge funds, etc) only a mechanism to achieve their goals rather than their core feelings?

 

It depends on whether Corker takes the attacks on him personally or not. That's my main concern as to how doggedly various groups are chasing down Corker. There's a saying that an animal that is backed into a corner is much more dangerous than one that is not.

 

FWIW, I do understand the need to put pressure on him. I'm mainly concerned about stepping over the unseen line and turning him feral.

[investorG]

I wonder if corker / warner's true motives are hurting shareholders or just hoping for more competition and other changes which benefit the banks?  If it's the latter then there's likely still room for a win-win if shareholders' expectations are reasonable.  I know many will say the former, and that's possible, but are their negative comments (hedge funds, etc) only a mechanism to achieve their goals rather than their core feelings?

 

It depends on whether Corker takes the attacks on him personally or not. That's my main concern as to how doggedly various groups are chasing down Corker. There's a saying that an animal that is backed into a corner is much more dangerous than one that is not.

 

FWIW, I do understand the need to put pressure on him. I'm mainly concerned about stepping over the unseen line and turning him feral.

 

there's a decent chance he wants a job inside the wh still.

 

if pressed, I think trump both likes corker and is sympathetic to FnF shareholders

[waynepolsonAtoZ]

I think it might be too late to worry about Corker going feral. Hopefully, next time around Liz Warren will see Corker as he is.

 

http://www.politico.com/story/2013/01/elizabeth-warren-makes-a-republican-friend-086996

 

[rros]

I wonder if corker / warner's true motives are hurting shareholders

In my view, this is not conceivable although it may appear as so.

 

Shareholders and what C/W have in mind -which is modifying the current system-, are on opposite sides of the same coin. The closer they were in achieving their goals in the past the more they despised shareholders and saw them (us) as an obstacle.

 

Today, realities may have changed somewhat. New administration friendlier to shareholders, simply worn out feelings by repeated attempts, Congress churn and the realization that a 180 degree in how the companies and markets operate may be counter-productive.

 

As this new reality sets in and as their ideas soften out -and we have had proof that Corker's vision has substantially changed-, the apparent hatred to shareholders may subside and become less relevant.

 

This is just a hope, of course.

[waynepolsonAtoZ]

"my guess is that someone is funding the appeals, on condition that this person chooses counsel."

 

It's pretty clear who that is. It's pretty clear that they don't have an easy exit strategy other than winning.

 

I find that reassuring.

[beaufort]

From today's IMF news:

 

"Meanwhile, on Friday morning Cowen & Co. released a report saying one factor driving a GSE bill is the fear that the Treasury Department and Watt will use the receivership authority under the Housing and Economic Recovery Act of 2008 to administratively reform the system. Cowen analyst Jaret Seiberg writes that the FHFA could terminate the existing enterprises and turn their charters over to new entities"

 

I wonder what this solution might look like.  It sounds like it may provide for a way to get around a Jumpstart GSE like stall.

[Guest cherzeca]

From today's IMF news:

 

"Meanwhile, on Friday morning Cowen & Co. released a report saying one factor driving a GSE bill is the “fear” that the Treasury Department and Watt will use the receivership authority under the Housing and Economic Recovery Act of 2008 to “administratively” reform the system. Cowen analyst Jaret Seiberg writes that the FHFA could “terminate the existing enterprises and turn their charters over to new entities"

 

I wonder what this solution might look like.  It sounds like it may provide for a way to get around a Jumpstart GSE like stall.

 

i am not sure what is more absurd, the report, or the report accurately reflecting the senate's "fear".  if HRC was potus and sperling was sect of treasury, well then maybe. but what alternative universe does cowen habitate?

[waynepolsonAtoZ]

With Mnuchin one never knows, he used to work at GS, LOL, but yeah, he might do the bidding of "Wall Street."

 

Watt though supports recapitalization, but hasn't been willing to use his authority to do so YET. Wait and see.

[Eye4Valu]

Come on now, Mnuchin and Watt are calling the shots. They'll be forced to resolve this. Doesn't hurt to have Sweeney, SCOTUS, U.S. District Court/Apellate cases and Delaware as optionality. Trump card is they're hard to replace. Everything else is just hearsay. Word to your mother!

[Guest cherzeca]

anything senate banking committee comes up with that is not moelis-like, perhaps with some kind of create competition twist added on, will be an untried contraption that should rasie uncertainty among all congress not in the tbtf tank. plus there is a budget to pass, debt ceiling to raise, tax reform to pass and, oh yeah, health care and intelligence committee diversions.  housing finance reform just cant compete with all of this on a headline basis.

 

assuming mnuchin hasnt bailed on his important priority and is just giving congress the opportunity to step up to plate, such that congressional inaction will lead mnuching to fill the vacuum, i think we are in a waiting game.  patience

[SnarkyPuppy]

anything senate banking committee comes up with that is not moelis-like, perhaps with some kind of create competition twist added on, will be an untried contraption that should rasie uncertainty among all congress not in the tbtf tank. plus there is a budget to pass, debt ceiling to raise, tax reform to pass and, oh yeah, health care and intelligence committee diversions.  housing finance reform just cant compete with all of this on a headline basis.

 

assuming mnuchin hasnt bailed on his important priority and is just giving congress the opportunity to step up to plate, such that congressional inaction will lead mnuching to fill the vacuum, i think we are in a waiting game.  patience

 

Completely agree.  Just continuing to try to question the merits as I do with any investment

[waynepolsonAtoZ]

"Come on now, Mnuchin and Watt are calling the shots."

 

The recent litigations by the way are stupid in that they try to claim that Watt doesn't have valid jurisdiction because he is a sole regulator (not a multimember panel like FERC or FCC).

 

WATT is on our side basically. Mnuchin and Gary Cohn are probably NOT on our side!!!

 

Why try to strip our friend of jurisdiction. A court in Texas might actually believe the theory that went against CFPB.

 

I wrote about this here. https://seekingalpha.com/article/4011863-fannie-freddie-cfpb-court-decision-appeal-waiting-continues

 

[rros]

"Come on now, Mnuchin and Watt are calling the shots."

 

The recent litigations by the way are stupid in that they try to claim that Watt doesn't have valid jurisdiction because he is a sole regulator (not a multimember panel like FERC or FCC).

 

WATT is on our side basically. Mnuchin and Gary Cohn are probably NOT on our side!!!

 

Why try to strip our friend of jurisdiction. A court in Texas might actually believe the theory that went against CFPB.

 

I wrote about this here. https://seekingalpha.com/article/4011863-fannie-freddie-cfpb-court-decision-appeal-waiting-continues

Your thinking is a mystery to me. Although Mnuchin and Cohn could have switched sides now that they have become the "owners" of Fannie and Freddie if for no other reason than having been absorbed by the system, it really makes you question why hedge fund supported Trump then. Hedge funds and specially John Paulson must have assessed exactly these issues. Thoroughly. Of course, there is always the possibility most have reduced or sold off after the initial run that ended in mid. February when things were still foggy. 

[rros]

If Berkowitz/Paulson/Ackman sold, would we not have known by now in the filings?

 

Of course, there is always the possibility most have reduced or sold off after the initial run that ended in mid. February when things were still foggy.

Yes.

[Luke 532]

Perry vs. Mnuchin, decided February 21st, reissued today...

 

https://www.cadc.uscourts.gov/internet/opinions.nsf/82D64389A0983CF585258160006833BC/$file/14-5243-1684473.pdf

[investorG]

Perry vs. Mnuchin, decided February 21st, reissued today...

 

https://www.cadc.uscourts.gov/internet/opinions.nsf/82D64389A0983CF585258160006833BC/$file/14-5243-1684473.pdf

 

what's the point in reissuing?  rub more salt in the wound they opened? 

[Luke 532]

Perry vs. Mnuchin, decided February 21st, reissued today...

 

https://www.cadc.uscourts.gov/internet/opinions.nsf/82D64389A0983CF585258160006833BC/$file/14-5243-1684473.pdf

 

what's the point in reissuing?  rub more salt in the wound they opened?

 

adam spittler‏ @aspit 1m1 minute ago

 

Perry court re-issue removes language of damage calculation based on date of purchase, now damages fully transfer from Par.  $fnma $fmcc

 

[rros]

Perry vs. Mnuchin, decided February 21st, reissued today...

 

https://www.cadc.uscourts.gov/internet/opinions.nsf/82D64389A0983CF585258160006833BC/$file/14-5243-1684473.pdf

 

what's the point in reissuing?  rub more salt in the wound they opened?

 

adam spittler‏ @aspit 1m1 minute ago

 

Perry court re-issue removes language of damage calculation based on date of purchase, now damages fully transfer from Par.  $fnma $fmcc

I thought this would be good news?

[Luke 532]

I thought this would be good news?

 

It is.  It's folly to use a stock's price as a proxy for value.

[rros]

I thought this would be good news?

 

It is.  It's folly to use a stock's price as a proxy for value.

Yes. This has to lead to massive buying now that the damocles sword has been removed.

 

This is what is left from that ruling, that matters:

 

We remand the contract-based claims only insofar as they seek

damages because the pleas for equitable relief are barred by 12

U.S.C. § 4617(f). “Because ripeness is a justiciability doctrine that

is drawn both from Article III limitations on judicial power and from

prudential reasons for refusing to exercise jurisdiction, we consider

it first.” La. Pub. Serv. Comm’n v. FERC, 522 F.3d 378, 397 (D.C.

Cir. 2008) (internal quotation marks and brackets omitted); see also

In re Aiken Cty., 645 F.3d 428, 434 (D.C. Cir. 2011) (“The ripeness

doctrine, even in its prudential aspect, is a threshold inquiry that does

not involve adjudication on the merits”). We therefore first

determined the claims are ripe, supra at 70-73, and only then

concluded the requests for equitable relief are barred by § 4617(f).

 

1. Claims are ripe.

2. Breach of contract and breach of the implied covenant of good faith and fair dealing regarding liquidation preferences and the claim for breach of the implied covenant with regards to dividends.

3. Lamberth is required to allow further proceedings.

4. Damages, if granted, to anybody owning the shares by time of ruling down the road.

 

The above makes the preferreds more valuable than commons: claims not only survived and are ripe, they cover all classes regardless time of purchase. Anyone buying tomorrow should be kosher. 

 

 

[rros]

I thought this would be good news?

 

It is.  It's folly to use a stock's price as a proxy for value.

Not folly. This ruling should lead to buying. It has opened the flood gates. The risk now is not in buying potentially worthless shares as before. The risk has moved to how much damages will be granted -if any- to anyone who *has* the shares. Even to those who may become shareholders tomorrow.

 

If demand comes > stock price should reflect the newly acquired value.

[Adrestian]

Not sure how this changes things.  Notably this sentence seems to maintain a distinction between potential shareholders:

 

"The district court may need to redefine or subdivide the class depending upon what that court determines were the various plaintiffs’ reasonable expectations."

[Guest cherzeca]

Not sure how this changes things.  Notably this sentence seems to maintain a distinction between potential shareholders:

 

"The district court may need to redefine or subdivide the class depending upon what that court determines were the various plaintiffs’ reasonable expectations."

 

seems to me the circuit court just punted on the whole measure of damages question.  left it up to district court to determine whether segmenting the plaintiff class is proper.

[Fat Pitch]

Lamberth will ask himself: "Would I have a reasonable expectation of getting my money back if I bought at pennies on the dollar?? Nah"

 

And that's that folks. Lawsuits are a side show. Our only hand we have left is bribing the gov't with $100 billion in warrants.

 

Not sure how this changes things.  Notably this sentence seems to maintain a distinction between potential shareholders:

 

"The district court may need to redefine or subdivide the class depending upon what that court determines were the various plaintiffs’ reasonable expectations."

 

seems to me the circuit court just punted on the whole measure of damages question.  left it up to district court to determine whether segmenting the plaintiff class is proper.