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My sense is that all the junior preferred shareholders want is for Fannie and Freddie to resume the dividend payments they were promised originally.
Nobody really expects retroactive compensation for missed payments.
The government can even keep the NWS provided that the dividend payments to the junior preferred shareholders now take precedence.
The thing that is really strange is that FSIC is a huge business
development company, almost as big as PSEC, and yet almost nobody pays any attention to it. You almost never see any comments about the company, good or bad.
My prediction for upcoming 2 events:
First, I believe the Treasury Dept. will K E E P the profits generated by Fnf rather than return them to the companies. Bad news for investors, at least for the short term.
Second, I believe that the Federal Government will agree to turn over many thousands of documents requested by the plaintiffs without putting up a fight. Good news for shareholders, at least for the short term.
Note that I own no shares at all, having sold all my FNMAS at $7.93/share. I am watching the situation closely and still have all the cash I got by selling the above stock sitting in a money mkt. account.
It is surprising how little attention this stock has received from investors. I think there is a very good, if not excellent chance of making a 20 percent profit by the end of the year, and yet nobody cares. Is everybody looking to get rich quick?
The preferred share are dropping because people are concerned that the hedge funds will give up; the legal bills run into the millions with seemingly no end in sight.
Does everybody understand that the Federal Government made a very serious mistake by not appealing the Federal Circuit U.S. Court of Appeals decision regarding the documents that Sweeney examined.
As a result, eventually almost all of the remaining 11000 documents will become public, and we will find out for certain if the conservatorship was truly justified.
What happened today was very bad news for Glen Bradford, based on what he has told us of his FNMA and FMCC portfolio.
This reinforces the old warning of "Don't bet more than you can afford to lose."
I sold all my FNMAS at $7.93 and am moving on.
Unfortunately, while Steve Mnuchin may be well intentioned, this court ruling is going to greatly limit his flexibility. He can not just GIVE billions of dollars away to shareholders without some justification. This court ruling does not enable him to justify giving the shareholders very much at all, even in the name of an out of court settlement.
One more thing: I think we are misusing our success before Judge Sweeney. Instead of going after the net profits sweeps when requesting documents, we need to recover documents related to the decision to impose the Conservatorship in the first place. In other words, how did Secretary Paulson justify the federal government taking over FnF in 2008. He had to have given these organizations mathematical projections of possible future losses to justify doing so. In retrospect, those projections were grossly exaggerated, perhaps deliberately so!!!
TARGET THE CONSERVATORSHIP, NOT THE NET PROFITS SWEEP WHEN REQUESTING DOCUMENTS.
It is possible that the new U.S. Attorney General made this decision, which is why it took so long to materialize.
The ruling in Perry Capital has been deliberately held back.
I speculated that it was to allow time to see what might happen with the Federal Circuit Court of Appeals. I can't imaqine that the DC Circuit judges are now going to issue a ruling without at least looking at these newly available documents first. So no, I would be very surprised to see a Perry Capital decision tomorrow morning.
Thank you very much for posting this.
Obviously, the key concern for many of us is what happens to the preferred shares. So long as I get my $25 for FNMAS, the common stockholders are welcome to whatever they receive. I am not a jealous person!
We are extremely fortunate that Judge Merrick Garland did not make it to the Supreme Court. He would never, ever have voted to overrule a regulatory agency like the FHFA!
Realistically, I do not think that Senator Corker is going to be quite so quick to antagonize or block President Trump from getting what he wants.
I can understand him handicapping President Obama, since he is a Democrat and not very popular in Corker's home state. Obviously, that is not true of Donald Trump!
By all acounts DB is the verge of insolvency! They are in even worse condition than FnF. In fact, I was thinking that perhaps FnF could buy them out. I'm not aware that it is possible to get a 30 year mortgage in Germany.
He can do more than that!
Only 46 documents are claimed to have presidential executive privilege. The new U.S. Attorney General can ask the U.S. Supreme Court or the U.S. Court of Appeals to release some, most or all of those documents.
If this is indeed true, it is great news for all of us!
He probably knows the Fnf story even better than we do!!!
We could be in for a long wait.
The judges are clearly WAITING upon some event before making a ruling public.
I think they are waiting to see what happens with the Federal Circuit Court of Appeals and the documents.
Another possibility is that they are waiting to see if there is any possibility whatsoever that Hillary Clinton might be elected president.
First, a decision to wind down FnF will be made by Trump.
Second, because of the Wells Fargo scandal, there is no possibility of the big banks replacing FnF.
Third, the Republicans have a very narrow majority in the Senate, and the Democrats will automatically fight such an effort, if only because they hate Trump so much.
Recapitalization is the most likely outcome, and the courts will determine the source of that capital (such as possible repayment of the funds paid to the government under the net profits sweep).
The election and Judge Millett.
All along, we have been assuming that Judge Millett would vote in favor of affirming the district court decision, if only to provide
the Clinton (Democratic) administration with a huge cash flow to help pay for Obamacare.
Now that Trump is coming into office AND Obamacare is going to be restructured (if not abolished), then her loyalty is not going to accomplish anything. Under those circumstances, I think she may well have had a change of heart on this matter. Note that she did not know until 11/9/16 that Trump had definitely won the election.
If that is the case, then a decision could be forthcoming very quickly.
In any event, as I have pointed out repeatedly, under no circumstances were we going to get a DC Circuit decision before the election, and we clearly were not going to get a document release before the election as well.
As I pointed out a long time ago, there would be no release before November 15 at the earliest, in order to prevent any spillover into the election.
Since we have gone past that date, this tells me that the DC Circuit is now waiting upon the Federal Circuit to decide about the documents. In other words, we may be in for a long wait.
I expected a decision today because it is the first available date after the election.
Since there was no decision, this suggests that the DC Circuit is waiting for the Federal Circuit decision on document release.
BTW, the WSJ published a table showing how many appeals court judges came from Democratic Presidents and how many came from Republican Presidents. For DC Circuit, it is 4 Republican and 7 Democratic, and for Federal Circuit, it is 4 Republican and 8 Democratic.
Fine, then let us see how the courts rule.
I'm sure the courts will have a field day explaining why a security clearance is needed to understand the rationale behind the net profits sweep.
At the very least, Judge Sweeney seems to support my position.
I have a feeling that the Federal Circuit is going to deal with this
very promptly. And any new judges appointed by President Trump are unlikely to feel much sympathy for President Obama.
You have misinterpreted what I said!
Right now the U.S. Department of Justice is in Federal court
arguing that the files should be kept confidential.
In January of 2017, there will be a lot of new faces in the Department of Justice, and they should now argue that that the files should be released. Of course, the courts are going to decide
what actually happens.
My point is that Donald Trump would be a fool not to try to get these documents made public. They almost certainly call into question the integrity of senior officials of the Obama administration, who may have said one thing in testimony before Congress and something else again behind closed doors.
I agree that Trump will act, insofar as he can, to release those 12000 documents. He is not going to do this because he believes in transparency. Rather, he is going to do so in an effort to embarrass
and humiliate the Democrats in general, and the Obama administration in particular.
The theme of the Trump campaign has been to show that the Democrats are corrupt and dishonest, and those 12000 documents will almost certainly demonstrate this in spades!!! Does everybody understand that if Trump can make Obama look dishonest, this protects him from criticism by Obama after he leaves office.
They are hated almost as much as the big drug companies.
Imagine charging $200,000 for treatment for a new drug for a few weeks!
Wells Fargo was considered the "gold standard" for all big banks, and Warren Buffet was prominently associated with them. No, I do not think FnF are in danger of being replaced by the big banks in the near future. And if there is just one more scandal involving the big banks, they are finished!
He is vindictive. I have read one of his books, and he is the kind of person who keeps careful track of who treats him well and who has criticized him.
Does anybody seriously believe he has forgiven Hillary Clinton for the comments she made about him during the campaign???
And as I said before, he has an opportunity to destroy the Democratic Part for a generation if they go after everybody who took a payoff from the Clintons. Do you really think the Republicans are going to pass up an opportunity like that???
I own only preferred shares, and am very, very happy with how things have worked out. Bear in mind that the net profits sweep was put in place by the Democrats; Trump does not lose face by reversing course.
My predictions are coming true.
First, I told you all no decision from Court of Appeals before election day.
Second, I told you that Hillary Clinton will end up in prison by end of 2017. Most of you thought I was crazy, but now....?
Here is how it will go: the FBI is going to go all out on an investigation of the Clinton Foundation. She will be indicated by a Federal grand jury after Obama leaves office; it will be impossible for him to pardon her if he does not know what charges are pending.
In return for lenient treatment, and only a nominal prison sentence, Clinton will tattle tale on all the other democrats she corrupted. This will give the Republicans an opportunity to DECAPITATE the Democratic party!
I think the Wells Fargo scandal makes it politically impossible to replace FnF with the big banks.
Remember that the Wells Fargo litigation is just getting started!
There will be bad publicity for a couple years to come.
I said that there would be no decision before election date in order to keep this from becoming some kind of a political football.
That is exactly what has happened.
Now if the additional documents do not matter to the judges, then the first available release date is Tuesday, November 15. (By the way, I do not expect a total dismissal as that would have happened quite some time ago.)
On the other hand, if the judges can not decide between a remand or simply throwing out the net profits sweep altogether, then the additional documents might matter a great deal. Also, Judge Sweeney hinted very broadly that the documents are of g-r-e-a-t significance to the plaintiffs; both she and the government are aware of their contents and the DC Circuit judges have a copy of her opinion as well.
If we do not get a decision from the DC Circuit Court of Appeals on Nov. 15. this means they are waiting to see if the Federal Circuit Court of Appeals is going to order the release of the 56 documents which are now on ice, so to speak. If the documents are released, then the DC Circuit Court of Appeals expects that those documents will then be used by the plaintiffs in the Perry appeal. If the Federal Circuit blocks the release, then the DC Circuit will render a decision not taking those additional documents into account. IMHO
As I pointed out a long time ago, there would be no decision before the election, and that has happened.
Here is how I see it going forward: We may get a decision on November 15. IF WE DO NOT, then it is likely that the DC Court of Appeals is waiting for a decision from the Federal Circuit Court of Appeals. In other words, if we go past 11/15, we could be in for quite a long wait.
I agree with you that there will probably not be a decision issued today, and not on Friday, which is a national holiday. However, the federal courts are open today, which is a business day just like any other.
Useful web sites
I happen to believe that Trump would be better for us than Clinton, so I follow events on www.drudgereport.com.
However, there is another web site that tries to be the "leading edge" on controversial events, such as the election. I am referring to www.beforeitsnews.com. People here might find that useful, especially
on Tuesday.
If I've told you once
then I've told you thrice
Stop whining about the wait
And try to act nice
THERE WILL BE NO DECISION
UNTIL AT LEAST NOVEMBER FIFTEEN!
I'm sure by then
we'll all be deep in the green!
Have you thought about a second career as a U.S. District Court Judge? When Judge Sweeney retires, I'm sure that "Crooked Hillary" would be glad to appoint you!
I think you are being too pessimistic.
There are 3 catalysts that will drive FNMA and FNMAS.
First, it is looking much better for Donald Trump. Hillary Clinton believes that what we call private property is simply what GOD (aka the United States Government) is willing to let us have. Trump, as a businessman, is far more respectful of private property, and IMHO, far less willing to go along with an expropriation of FnF.
Second, we are waiting for a DC Court of Appeals decision, which could come as soon as 11/15 but NOT before that date.
Third, we are waiting for a decision by the Federal Court of Claims regarding Judge Sweeney's compel order, and I expect that to happen by the end of November. Judge Sweeney's expertly crafted 80 page order greatly speeds up decision making by the Appellate judges.
Hi:
I think motivation is crucial.
It is one thing for the feds to argue that over the life cycle of a 30 year mortgage, sometimes FnF will do very, very well and other times very, very poorly because of changes in the national and global economies. It is very different for the government to argue that they want to confiscate the profits of Fnf because the costs of Obamacare are much higher than expected!
I think the federal government has the right to expect that FNF be self-sustaining over the long term. It clearly doesn't make sense to distribute large profits when things are going well, and then asking for a bailout when things are going badly. In this situation, however, I believe the government is trying to conceal documents that show they wanted the FNF profits for reasons unrelated to FNF.
I strongly disagree.
As far as the government's willingness to provide the documents to the Appeals Court, well what other choice did they have? The government could hardly refuse to provide the documents after Judge Sweeney had already seen them.
Second, your comments imply gross incompetence on the part of Judge Sweeney. Given that she took months to review the documents and consider the arguments that you just made, one has to ask what she was thinking if the Appeals Court overrules her? There is a very high bar to overruling Judge Sweeney in this manner.
Finally, I hope everybody realizes that this was simply an attempt on the part of the federal government to keep these documents secret until after the election.
It would help if we knew who the Federal Circuit Court of Appeals judges are who will be deciding this issue. If they were appointed by President Obama, I do not hold out much hope that they would be willing to embarrass his administration.
We all owe a debt of gratitude to Judge Sweeney.
Isn't it obvious in retrospect that she anticipated this reaction from the federal government?
We all complained at how long, very long it took for her to issue her opinion! She was very, very meticulous in her judgment.
If I understand the situation now, the federal government has to clear a VERY high bar to have her ruling set aside by the appeals court. As a result of her strenuous effort earlier, that is not going to happen!
Also, I believe the feds were stupd to try to block the release of all 56 documents. The smart thing would have been to select the few most crucial ones and seek special protection for them. By seeking to block release of many documents that clearly do not merit executive privilege, the feds are undermining their credibility with the appeals court, IMHO.
If I've told you once,
Then I've told you twice
Stop whining about the wait
And try to make nice!
There will be no news
Until at least November fifteen
I'm sure by then,
We'll be deep in the green!