Freddie Mac (FMCC)

[trunkmonk]

Nagoya, I can give u example. Germany repatriated their gold a while back, they had every bar marked, they didn’t get back their bars. It’s a filthy mess and rats run it. They caused the bank crises, the Fed mainly, and blamed the GSEs. GSEs have been the biggest government heist in history. I will stand with that statement in front of God because he sees it all.

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=169532357

[FOFreddie]

Prepared Statement Excerpt from Ranking Member Senator Toomey at today's US Senate Banking Committee Hearing

The White House plan also proposed pushing Fannie and Freddie into activities that prior administrations understood created too much risk for taxpayers. In a break from decades of bipartisan efforts to reform the GSEs, the White House has embraced the GSE conservatorships as a means to socially engineer its housing and racial equity policies.

Senator Toomey called for the end of Conservatorship.

Obviously not much is going to get done. Seems like Admin action also dead?

Video Link: https://www.banking.senate.gov/hearings/priced-out-the-state-of-housing-in-america

Fairholme DC Circuit Cert Petition tomorrow.

News Release link:https://www.banking.senate.gov/newsroom/minority/toomey-bad-policies-and-reckless-spending-have-fueled-soaring-housing-costs

[clarencebeaks21]

“I have always thought of this as being related to the implicit fair dealing for the public securities markets but I dont think that was in the pleadings right?”

Correct. It was the DC Circuit appeal that instructed Lamberth on remand to rebrief the remaining claim as now styled.

“Sounds like Judge Lamberth will have to decide to impute Delaware law or not?”

He could decide that. But he also can first write to the VA state supreme court, and request that they weigh in.

“Will will probably know soon if summary judgement is granted?”

Honestly I don’t think anyone can accurately handicap that date.

“Do you think Judge Lamberth may just stay his case once the Cert petition is filed until SCOTUS decides to take up the appeal or not?”

Possibly. But property law and contract law are rarely 100% coterminous. So one does not necessarily control or inform the other.

[trunkmonk]

Volume tapering off with higher prices. Even if selling stops there has to be MMs bidding it up from here.

[FOFreddie]

Thanks for the reply clarencebeaks21.

I did not know about the choice of law issues with the implied covenant that you highlighted. Thanks for sharing. You are probably right regarding the summary judgement - I have always thought of this as being related to the implicit fair dealing for the public securities markets but I dont think that was in the pleadings right? Sounds like Judge Lamberth will have to decide to impute Delaware law or not?

There has to be some reason why they sold all of the FNMA and kept FMCC and we will probably get a better understanding this quarter. It is my understanding that all the tax loss selling has to be done by Oct 31 so we should know by the end of the year. Perhaps it is the potential outcome of the Lamberth case but when will we know that outcome? Will will probably know soon if summary judgement is granted?

Do you think Judge Lamberth may just stay his case once the Cert petition is filed until SCOTUS decides to take up the appeal or not?

[clarencebeaks21]

I can think of three reasons. All which may be wrong. That said:

(1) the recap shortage favors Freddie: Freddie is a bit closer to its minimum recap target than Fannie is, according to Timothy J Howard (former FNMA CFO). I’m nowhere near a finance expert, so I defer to TH’s blog.

(2) the current contract claim litigation could cause a ‘fork in the road’, putting Freddie further ahead to stay. How?

The USG’s current brief in the DC Circuit argues that the state of Virginia (Freddie’s domicile) has never truly adopted the doctrine of breach of implied duty of good faith (in VA’s common law of contracts).
My Observations?
(a) I think this is the first time that this key issue has been formally raised. That might suggest it’s a hard row to hoe; but another thought is that for public policy reasons, the USG did not want to stick this likely recap-fork into the ground— until it was absolutely necessary.
(b) Delaware’s adoption of this doctrine—particularly as a stand-alone claim*— is not accepted by all states(!!!)

So, in this scenario, Freddie commons likely lose on summary judgment in the DC District (as a matter of law). Any appeal would be a waste of ink (such polar-opposites are a favorites of courts for efficiency reasons- and thus rarely misunderstood). Given more uncertainty toward the FNMA contract merits outcome, Freddie gains now an incremental legal lead, on top of its financial lead.
Hmmm.

[Ace Trader]

This is a risky call. Even if it’s clear the Gov broke the law I do not trust the SCOTUS to get it right .


Law/shareholders 0 SCOTUS/Gov 1

[Ace Trader]

The selling has stopped for now and FMCC is way over sold so expect a rebound back to mid 70’s. If the Hedge continues to sell in Q3 then the price will slowly drop. I also think the price should increase as we get closer to trail on the hopes of a out of court settlement which I believe will never happen .

[FFFacts]

Will have to see what the actual arguments are in their petition. If this is a nationalization, we know approximately what the remedy would be and it is less than then current trading price. If it was some other sort of exaction the remedy would presumably be more. However, if there is a resolution to this before any other meaningful outcome/appeals then this case would set the benchmark to moot everything else.

[EternalPatience]

Wait until the 13Fs are out

[FOFreddie]

Interesting that Growth Fund of America had sold all of its FNMA common but had FMCC as of 6/30. Why keep FMCC and why not sell down both proportionally?

Wash sale rule would only apply to FNMA and FMCC common separately? 61 day period - sell FNMA then sell FMCC and buy FNMA back if want to keep overall exposure? Probably not but something to think about?

https://www.investopedia.com/terms/w/washsalerule.asp

[FOFreddie]

Regarding the Cert Petition it will be interested who files Amicus Briefs. The Chamber of Commerce has been active in CFPB litigation - it will be interesting how much of the 5th Circuit Separation of Powers issues will be referenced in Cert Petition. Perhaps we will have a wide swath of Amicus this type for the Fairholme Cert Petition?

[FOFreddie]

Next up is the FHFA Response for Collins at the Southern District of Texas on Monday - the 18th

https://www.glenbradford.com/2022/06/fnma-fanniegate-1150/

[trunkmonk]

everyone is an expert these days, lol. 65c on the dot. i see this run just starting. everywhere i look or read, there is a Johnson. happy friday.

[FFFacts]

Notional trading value is only about $2 million. That is nothing.

[FFFacts]

There is the scotus petition coming up in a few days.

[EternalPatience]

Be back to regular red programming tomorrow.

[trunkmonk]

Have not seen a 10c + day in a long time. Also weird seeing a 25%+ day. Lol.

[trickybiz]

Someone's buying, but why, this is a treasonous government at work...suggest to stay away from this toxic low level "enterprise." Get your mortgages from anywhere else...so sad.

[trunkmonk]

Pattern has changed for a little bit anyhow, 2 up 1 down, penny wise anyhow.

[Ace Trader]

More of the same buying today! Or shorts exiting ??? One thing is clear will all this buying something’s got to give right ??

My gut tells me it’s linked to the trail. Here goes……

[trunkmonk]

Times are changing. Fnma always normally has as much as twice the volume. Fun to watch.

[FOFreddie]

You are right from a trading perspective but since these are less than 0.1% positions they probably have more incentive to move on and take the tax losses. It is my understanding that they held the common positions from pre Conservatorship and have never purchased any additional common since then. They probably got scared out of their common by those who said that the stock is going to 10 cents. Just thoughts but I thought you may be interested in the work that Kthomp19 has done - thanks Kthomp!

[Ace Trader]

Going by this I don't think so. If I was them I would re invest at these prices average down or double. Then they could sell 50% get there money back and keep 50% for long term. They did increse there JPS in both GSE

We sore today the largest volume so far and no price movement so I'd say it ws shorts covering from $0.50 all the way down. Trade tape shows huge buys today.

[FOFreddie]

Yes - definitely tax efficient. Dont you think they will sell all of their commons for FNMA and FMCC?

[Ace Trader]

They sold commons to buy Fannie JPS and Freddie JPS

[Ace Trader]

No I haven’t let me have a read. Thanks. Yes waiting for an update of there holdings sure will be interesting. What we are seeing today is shorts covering as most likely got in before $0.50.

[FOFreddie]

Have you seen this spreadsheet by Kthomp19 regarding GFA holdings?

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=169315330

Interesting that no common was sold in Q1 We will see updates in the next week or so.

[FOFreddie]

US Chamber of Commerce is focusing on structure of CFPB

https://www.foxbusiness.com/politics/consumer-finance-bureau-out-control-under-bidens-director-critics-say

FHFA and CFPB have many of the same Constitutional problems

[Ace Trader]

Building nicely today with volume. Shorts are exiting or they should be or they are going to be in trouble. Won't able to drag it down to exit.
The up coming cases will just build on support over the next few months until Octobers trail.

[Ace Trader]

Fannie is 2 days ahead of the up swing from Freddie. There will be no drag down damit I was hoping 25 if not 32 cents.
It will be intersting to see what the hedge fund sold in commons v JPS in the 2nd Q from the results from 1st Q. https://www.capitalgroup.com/individual/investments/quarterlyholdings/agthx

Fannie is ahead from Freddie so we should see a continue up swing then sideways until news comes out from court cases. It's going to be a busy 6 months ahead.

[trunkmonk]

Wow kept 2c gain today, having said that, it’s starting to look like a run may be forming. I would love to see a run to 65c. Settle for any green run.

[955]

Good to hear. Time to take back our Constitutional Republic! Thanks for posting that.

[Ace Trader]

Hopefully ! Well theres alot going on in the courts between now and Nov. So we should see some price movement. Hence why I brought another big chunk this morning. Taking a gamble on a short term price jump while keeping my core in commons in Freddie and my core in JPS , FMCCI, FMNAT.

[Ace Trader]

Thank you for the valuable input. Yes love to get more info on the cases and how they are linked and what when goes first as far as rulings etc. I would like to see the collins case go back to SCOTUS but I bet they won't take it. Rop is our best bet and shortest too so we have about 10 days before any news and any movement in price. Hence why I loaded BIG this morning and yesterday at 4:59.

[trunkmonk]

Some think it’s going to $5 again. I’m not gonna rain on that parade, I’m sure with the next 14 years it’s possible.

[FOFreddie]

Thanks 955. The new Director at the CFPB - Chopra is getting a lot of attention for being an activist and the US Chamber is actively involved in raising administrative law and Constitutional issues. They have filed Amicus briefs in two separation of powers cases for next term. I am wondering if they will file an Amicus for the Fairholme Cert? Maybe Kelly also? As noted in the 5th Circuit by Judge Edith Jones a lot of the CFPB Constitutional separation of powers issues are the same for the FHFA and we will see this in the interplay between Collins an All American on Remand in the 5th Circuit.

[FOFreddie]

Thanks for the quick reply. I got to think you have made a good trade and if it turns out you never are able to get a full position at lower prices that is a good thing!

Regarding the GFA Holdings it is my understanding that they should be disclosed within 2 to 3 weeks after quarter end so we should have an update what's left to go. Kthomp seems to monitor this closely and perhaps he could confirm.

Regarding news events - I am waiting for the Govt filings in Collins as the likely next event. I believe they are due a couple of days before the DC Ct of Appeals Cert Petition which I believe will be important to see how they incorporate the 5th Circuit cases regarding the separation of powers issues. I would not expect that the 6th Circuit will NOT rule in the Rop case until after the DC Cert Petition is filed. Although it is a low probability I am hopeful for a big ruling invalidating the 3rd Amendment on the Appointments Clause separation of powers from the Rop 6th Circuit because I think Judge Thapar understands the issues and could share in the positions taken by Judge Edith Jones in the 5th. Basically I am looking for the 6th to look to the 5th for separation of powers guidances. Bhatti in the 8th needs to get back the Ct. of Appeals to be impactful unless we get a surprise favorable ruling at the District Ct. level. I dont know if you have read my thoughts on the DC Cert Petition that I have previously posted here but I think the DC Circuit wrongly relied on the 5th's position regarding retroactive damages in Collins and would expect the Cert Petition to highlight that.

I am not so hopeful with Bhatti since the Judge at the District Ct has already dismissed once but we probably wont see the transcript for 90 days since it is being redacted and it is my understanding that it is sealed for 90 days but I could be wrong.

[Ace Trader]

Some people want the price to go down to load up as like me they are greedy!!! I just brought another 105k Freddie commons this morning.
These things I think will go sideways until we here from the Rop case by July 14th anytime after that for info.

Lamberts case is Oct 17 so that’s when the fireworks hits

[FOFreddie]

Thanks Ace Trader. Selling could continue until Oct 31 end of fiscal year. Although they are small positions in USD amount still a lot of shares to go as of March 31. I see 38 million FNMA and 48 million FMCC? Is that correct.

The question I have is why some continue to want to see the common stock price go down ? I used to think it was that they thought a conversion period would be imminent but that was a couple years ago. Some one is buying these shares and it would seem that it is not just retail because retail probably has been stuffed with GSE common for years and have had a miserable time holding.

Looking forward to June 30th holdings release.

[955]

Unloved due to hijacking and unspoken change in their charter. Not what the GSE's were ever intended to be, handouts to the irresponsible and unqualified ala Maxine Waters, the queen of societal destruction. NGA, National Ghettotization of America.

[955]

Meet the Q-tip of the crypto world,
Washington's 'Crypto Queen,' a Republican senator who owns $100,000 in bitcoin and wrote a bill to finally regulate the industry:

Any similarities? A RINO to be sure.
Janet Yellen, Nancy Pelosi, Kamala Harris, Sandra Thompson and many more like them coming up the ranks. Unqualified, incompetent bigots which is what qualified them for their positions. All planned, all intentional.

Meet Washington's 'Crypto Queen,' a Republican senator who owns $100,000 in bitcoin and wrote a bill to finally regulate the industry
Katie Canales Jul 4, 2022, 7:55 AM
sen. cynthia lummis
Republican Sen. Cynthia Lummis. Tom Williams/CQ-Roll Call, Inc via Getty Images
Republican Sen. Cynthia Lummis is Congress' resident cryptocurrency enthusiast.
She' owns a large bitcoin stake and co-sponsored a significant crypto bill.
The bill would help classify coins as either commodities or securities, and decide which agency should regulate them.
The Refresh logo
Listen to The Refresh: Insider's real-time news podcast.
Sen. Cynthia Lummis is known on Capitol Hill as the "Crypto Queen."

The Republican from Wyoming has earned a reputation as a cryptocurrency educator in Congress, demystifying and advocating for the technology among her older colleagues.

She's a self-described HODLer, crypto-speak for someone who invests in bitcoin as a way to get in before it takes over larger swaths of the financial system. In June, she introduced a bill, alongside Democratic Sen. Kirsten Gillibrand, to some of the first federal guardrails for the growing and largely unregulated world of decentralized finance.

"There are groups who want no regulation. There are other groups that want to completely ban digital assets," a spokesperson for Sen. Lummis told Insider. "We need to meet somewhere in the middle to make sure that bad actors are not taking advantage of the lack of regulatory clarity, but also that innovators can continue to develop new technologies that make our world better."

From Wyoming to Washington
sen. cynthia lummis
Sen. Lummis in 2008. Douglas Graham/Roll Call/Getty Images
Sen. Lummis (pronounced as though it rhymes with "hummus,") served as the state treasurer in her home state of Wyoming from 1999 to 2007 before winning the Wyoming seat in the US House. She served as vice chair of former President Donald Trump's presidential transition team after he won the 2016 presidential election.

In 2020, Sen. Lummis, 66, became the first woman to be elected senator from the state of Wyoming. That same year, she also became the Senate's first crypto owner.

Sen. Cynthia Lummis
Former Vice President Mike Pence and Sen. Lummis in a mock swearing-in ceremony in January 2021. Pete Marovich / POOL / AFP) (Photo by PETE MAROVICH/POOL/AFP via Getty Images
Lummis bought bitcoin in 2013, and she reported in October 2021 that it amounted to somewhere between $50,000 and $100,000. She told Protocol last week, however, that she put her bitcoin holdings in a blind trust after receiving blowback for owning the digital assets.

But her passion for the technology — and eagerness to learn — puts her leagues ahead of many of her colleagues.

"I'm catching up, and I need to help my colleagues in Congress to catch up," Sen. Lummis told Reason in October 2021.

So what would the bill do?
cynthia lummis
Sen. Lummis. Tom Williams/CQ-Roll Call, Inc via Getty Images
A key component of the Responsible Financial Innovation Act is how to classify digital assets (commodities or securities) and which agency should regulate them.

It's a question that's long plagued the industry. Many companies have long scowled at the idea of the Securities and Exchange Commission overseeing digital assets, with many preferring the Commodity Future Trading Commission's oversight instead.

The legislation partially agrees.

"Digital assets that meet the definition of a commodity, such as bitcoin and ether, which comprise more than half of digital asset market capitalization, will be regulated by the CFTC," reads the bill.

However, Sen. Lummis has said the SEC will still play a key role to warn consumers of smaller cryptocurrencies that could be scams.

"These are assets that need disclosure, where the public needs consumer protection because some of these are just fraudulent," she told Protocol.

Is she the best person to write the bill?
cynthia lummis
Sen. Lummis in 2021. Kent Nishimura / Los Angeles Times via Getty Image
Some are skeptical about Sen. Lummis' unabashed pro-crypto fervor, given her influence in Congress and fanfare in the industry.

It "calls into question whether she is approaching this bill from the perspective of wanting what is best for society as opposed to wanting what will benefit an industry that she is closely tied to and directly invested in," Dylan Hedtler Gaudette — government affairs manager at the Project on Government Oversight — told Insider. "It's a classic conflict of interest, plain and simple."

But on the other hand, some believe her enthusiasm is an asset in policymaking.

"Senator Lummis' interest in crypto reflects the position of many in the industry, and it's important that all parties be represented in the regulatory conversation as it unfolds," Kenneth Goodwin — director of regulatory and institutional affairs at the Blockchain Intelligence Group — told Insider. "That being said, the bill is substantial in its stance on how to designate crypto assets and enforce breaches accordingly."

As for the nickname bestowed upon her, the "Crypto Queen" of Congress, Sen. Lummis is all for it.

"It makes her laugh," a spokesperson for the senator told Insider. "This community is so passionate

[Ace Trader]

I found a good read to see who they had in there fund. One would think there cost v tax loss would be better than Gov cashing in the warrants then letting them rip! I think the selling will continue into 2nd Q.

About all are JPS with a little common.

https://www.capitalgroup.com/individual/investments/quarterlyholdings/agthx

Page 181-195

Federal Home Loan Mortgage Corp., Series Z, 8.375% noncumulative preferred shares 71,493,658 $221,630,340.00

Page 196-210
Fannie Mae, Series S, 8.25% noncumulative preferred shares
62,266,695 $200,498,758.00

Page 361-375
Fannie Mae
37,644,295 $29,550,772.00

Page 316-375
Fannie Mae, Series T, 8.25% noncumulative preferred shares
6,954,484 $18,672,790.00

Page 399
Fannie Mae, Series O, 7.00% noncumulative preferred shares
1,739,366 $8,783,798.00

Page 399
Fannie Mae, Series P, 4.50% noncumulative preferred shares
190,000 $452,200.00

Page 399
Fannie Mae, Series R, 7.625% noncumulative preferred shares
837,675 $2,077,434.00

Page 399
Federal Home Loan Mortgage Corp., Series V, 5.57% preferred shares
212,500 $478,125.00

Page 399
Federal Home Loan Mortgage Corp., Series X, 6.02% noncumulative preferred shares
239,000 $587,940.00

[trunkmonk]

GSE stock has almost never been so unloved, and i think some understand it.

[FOFreddie]

You are right trunkmonk. Justice Alioto did everyone a disservice in his " special conservatorship" finding under HERA. It is a playbook for future nationalizations - next up will be the Farm Credit system which also has a private public legal structure.

My take away from the grant of Cert for the two separation of powers cases is that the 5th Circuit under the philosophical leadership of Judge Edith Jones has decided to take an active stand on preserving the separation of powers engrained in the Constitution. Based on the timing of the Remand for Collins and the text of All American, it is my hunch that the Fairholme DC Circuit Cert Petition will incorporate much of what the 5th has laid out.

The Fairholme shareholder lawyers will have a peak into the arguments of the US Govt to deny retroactive relief at the Southern District of Texas for Collins a couple of days before the DC Circuit Cert Petition is due. It is my hunch that the 6th Circuit Panel will wait for the US Govt Collins complaint and DC Circuit Cert Petition before filing.

Unfortunately, I dont think any positive legal development will do much for common prices until the American Funds Group is done selling. I am not sure when the tax selling period ends but I think we will have several more months of price pressure. I wonder who is buying all of this common? - in some ways it is amazing that the price has not gone to near zero at this point given all the uncertainty and selling pressure.

[trunkmonk]

the Dumbocrats are attacking SCOTUS and wanting to either eliminate them, or have oversight, this should be where SCOTUS sides with all separation of powers issues because its the Dumbocrats that are overreaching everywhere, and i mean everywhere. SCOTUS needs to start doing what our founding fathers expected of them and stop the madness at every corner of our country and constitutional rights.

[FOFreddie]

Wonder what the 6th Circuit Clerk Deborah Hunt thought about being called " Mr. Cayce". ? Lyle Cayce is the Clerk for the 5th Circuit.

https://www.glenbradford.com/2022/06/fnma-fanniegate-1152/

Kind of sloppy and arrogant at the same time?

There are two separation of powers cases on the October 22 SCOTUS docket related to Rop. Difference between 5th Circuit and 9th Circuit.

5th Circuit Case:

https://www.scotusblog.com/case-files/cases/securites-and-exchange-commission-v-cochran/

9th Circuit Case

https://www.scotusblog.com/case-files/cases/axon-enterprise-inc-v-federal-trade-commission/

Discussion about the two cases:

https://www.scotusblog.com/2022/05/justices-grant-review-in-two-cases-that-test-jurisdiction-of-district-courts/

Thapar wants to be appointed to SCOTUS and Rop is his chance to prove that he believes in the Separation of Powers.

[trunkmonk]

6th circuit gave it a couple penny bump today.

[FOFreddie]

Thanks Trunkmonk.. According to the link provided by Ace Trader, The Growth Fund of America had approximately 38 million shares of FNMA and 48 million shares of FMCC as 3/31/22. It was my understanding that these shares were acquired pre-Conservatorship so the tax basis could be over $ 20? Assuming a 30 pct effective tax rate we are looking at a tax benefit for investors of approximately $ 6 a share for each share sold. Could be lower but could be higher. Cant blame them if they are listening to Glen Bradford.

Here is the link from Ace Trader:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=169278806

This could go lower but the reason seems to be the selling by American Funds. They could have owned more in other funds also. Do you see any scenario which leads to delisting of FNMA and FMCC commons - seems impossible right? They need to raise public capital so if you buy now you have forever to wait for upside? Seems like a great option on two of the most important companies on the planet? Maybe we get crammed down - maybe not?

[trunkmonk]

Oh no I was off by .4c.