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Preferred stock issuances give companies a relatively cheap way to acquire additional capital. The preferred market is dominated by banks and related financial institutions, which are required by regulators to have adequate Tier 1 capital to support their liabilities. Tier 1 capital includes common equity, preferred equity and retained earnings. (Note that as per the recently passed Dodd-Frank Act, cumulative preferred and trust preferred securities will eventually be phased out of their Tier 1 capital status.[1]) Since issuing preferred shares is normally cheaper than issuing common shares and avoids common ownership dilution, banks issue preferred shares to meet the required capital ratio set by regulators.
This is why I am guessing prefferred's might be given par at max, and new prefferred's issued at lower interest payments, especially since rates are so low and bonds are paying very little. Converting pref's to commons dilutes, adds to common dividend and voting structure which will be a red flag for any new re-IPO share buyers. Government is not guaranteed to own the 79.9% of warrants for commons (courts), and the warrants will be possibly used to attract new money and probably to pay off old pref's in some sort of settlement. Just my GUESS
I can somewhat agree with that.
That's funny stuff!
Thanks dude. I'm tired of the Pref's BS scare tactics. I've been a shareholder in FNMA since mid 2008, or there abouts. Bought my first 30 or so shares at around $32 when it was dropping and government was rumored about possible take over.
Yep. Agree
Ooohhh hahahaha. You may be right Guido. I don't give rats azz
50,000 shares strong and still buying, not selling, I'll wait as long as I have too. I got a 110k burning a hole in my pocket and I'll keep buying as the price suits me. How much GSE debt shares do you own? Is your money with your thesis (words)?
You have your convictions and I have mine. I could care less if you buy or convert to regular shares but many pref's posters on here seem to enjoy trying to scare the shareholders to convert to their prefs. Why is that?
It's a preferred holders disease, from what I've read. Lol
I'm making this up though. My foot note for Holdenwalker.
As if prefferred holders don't make up total BS things on this board.
Shareholders have had no dividends either. But all you pref's BS-ers keep insisting conversion. Show me where a judge hearing a pref specific case is saying the courts are going to given them 1000 regular shares per a pref or 5 shares per pref.? Show me that please. All the cases are about dividends. So think about it. Pref's are non communulative from what I understand, and is why Warren Buffet hated the GSE's prefferred's,,this is a fact. Once the dividend is stopped for any specific business reason you r SOOL (shyt out of luck) as to your dividend. Hence prefferred's are no where near stocks, they are bonds. Stocks are a reflection of the value of a company on the stock market. No one asks how good is a companies value based on prefferred price, no investor I know. They always look up the companies STOCK ticker to get PE'S and all that other good info which is based on stock price, NOT pref's price. So please stop pushing your fantasy/fairytale to those of us who know the difference between owning a company or owning it's semi secure bond like debt.
This is the psychological term...
Denial of denial: the denial of the unpleasant fact and the insistence that one is not experiencing denial.
It's fun speculating, isn't it? I'm sure the governments plan is to bend over backwards for pref's and even powder their tushy's while throwing shareholders under the bus. Yeah, go ahead and beleive that. I have yet to see a legal ruling where they have said pref's were mistreated. Every ruling I see talks about common shareholders.
B. McFerrin gets it....
Here's a little song I wrote
You might want to sing it note for note
Don't worry, be happy
In every life we have some trouble
But when you worry you make it double
Don't worry, be happy
Don't worry, be happy now
That's a good question! Or it could be more $$$ in governments pocket.
Wonder if closing the market will have the unintended consequence of putting a run on the banks?
Aaaaaalleluia, alleluia alleluia
+1 Exactly! Keeps using other court cases with other companies to argue his point when this is unlike any of them. The others were done LEGALLY.
Nor does it mean one will happen, and you are speculating!
Wikipedia
Preferred stocks can make an attractive investment for those looking for a higher payout than they'd receive on bonds and dividends from common stocks. But they forgo the safety of bonds and the uncapped upside of common stocks.
Plus uno!
This is a great piece of legal ruling in shareholders favor! My question is, why the heck doesn't it ever make a difference? Is that ruling being contested (appealed) by the government right now? If not, please see my question above. Seems like every lower court ruling is being held in limbo while the government fiddles away, delays, appeals, delay some more, create delays,,etc.
They keep us on OTC so they can keep a foot on the throat of stockholders, and I am becoming more and more convinced it is due to whatever settlement they are working on. They'll do some crap offer of ?X (?=fill in a low number) stock price. Sincerely hope the courts proffer real justice and force a fair deal. Sweeny or Lamberth sounds like they would maybe do this if they ever quit letting the government "kick the can". Not even a can anymore, just a piece of metal about the size of a penny from all the kicking.lol
Good stuff/info
Thanks
Agree.....what a mess.
What people fail to see is this virus may be a permanent fixture in the population like all the other flu's. So do we go through all this again next year at same time? And the next? This is crazy over reaction, and too much stimulus is just as bad as too little right now. Level heads need to prevail.
Lmao. Run Forest, Run.
The word you're looking for that describes the majority of the either misinformed population or fake media driven population is : SHEEPLE.
I'm doing the same! Buying 5-10k at a time as it drops. I got a feeling news is coming and when this pops....you the saying about catching a falling knife? Trying to catch this on the way up will be like trying to catch a bullet.
From the sage advice of chicken little.,,lol
Exactly! Treasuries warrants are for stock, not pref's, so what do you think they will be pulling for as far as increased value? Pref's? When they report back to congress "hey, we cashed in all our warrants to enrich Pref holders, we got nuttin! That'll fly, right? No. They will finaggle a settlement so they come out smelling okay, if not like a rose, so place your bets!
Thanks for the heads up Navy. Crossing my fingers that a settlement that is fair will be coming. It's like she'll shock reading that court doc. Lol
+1 absolutely.
This is great,,if I'm understanding it correctly?
So you're saying that they have some how bought the courts? That the cases/shareholders don't matter? Why are there those on here who advocate this banana Republic contract conservatorship and skew their interpretations to and almost comunistic view of this conservatorship? That in itself tells me much about those who are skewing legal statements. The courts can not be ignored. There are 3 branches of government, the courts being one of them. With 10-12 cases pending it's pretty ludicrous and misleading to say MC and SM will do as they please,,and to take as the word from God every pronouncement they make. They do not, will not and can not own the court system, for all our sakes, or we have much bigger problems in this country and our government, if this is true, as some here spin it.
I'm on board with that!,,,
Excellent breakdown and analysis! It is amazing to me that they bonded both cases together for the SCOTUS review....how? It is not apples to apples legal situation comparison, so how can SCOTUS rule on either? It would seem to put the justices in a catch 22 situation.
Really hoping this all comes to fruition as you have written and we see the light.
That's exactly the conclusion I came to. So, has the amount the government has spent defending against these cases been accounted for? Or is it just stolen and disappears down a hole? So far some on the board have said north of 1 billion over the past 12 years government has spent defending against GSE court cases. It would be beneficial to know where that money is taken from to pay these legal costs. Also, it would be great to know an actual cost to date that the government has spent. I'm sure a few reporters would be all over that in a heart beat.
Question for this board.....does anyone know, or have information on how much the government has spent on defending all the current and past (those that were dismissed) court cases? If I had to guess-timate, I'd say 100 mill plus by now. Tax payers were peeved about the 40 mill Mueller investigation, so wondering how taxpayers would react to the expense of this? Goes back 2 administration's, plus this one. Thanks for any help!
You ever watch the movie Midnight Express? Being a GSE investor is alot like being that guy in the movie. Went through tons of crap but found freedom in the end
Ditto.
I got a feeling it's gonna be....
"Kick"....clang, clang, clang, clang, clang, clang