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There's nothing wrong with being proactive. We saw what happened last time we waited to file lawsuits. It's best to get ahead of the curve and immediately file a lawsuit against Tim Howard so he cannot become FHFA Director
And Tim Howard owns only Preferreds! We definitely don't want him to take over the FHFA; otherwise, he'll really go out of his way to screw over the Speculators, aka Common shareholders, while making Preferreds whole.
Let's file a lawsuit immediately to stop this from happening. There must be a conflict of interest since he only owns Preferreds
Are their capital requirements that need to be in place before release or are they just free to exit Conservatorship whenever FHFA deems it?
Seems just releasing them into the wild might pose an issue. What if they need another draw? Does that mean they go back into Conservatorship?
Picked out my new License Plate today -- MOELIS
Can't wait to put it on my newly purchased Camaro once Moelis gets implemented and the GSEs are released!
Is the NYSE up-listing confirmed? Seems we get up-listed every other week and then de-listed back to the OTC just as fast as we up-listed. And now the financials for FNMA are missing from Yahoo.
Something is amiss!
I love the sweet smell of Moelis in the afternoon. It really lightens the mood knowing Preferreds are going to be A-Okay! The Superfecta -- Trump, Mnuchin, Moelis, and Paulson -- are some good ol' boys. They got this one covered. Just lock-up those Preferreds and ride the waves into the sunset.
Did I miss any new members of Congress endorsing the Average Joe Plan? Those rumors usually start to perk up as the price drops lower and lower. Seems like we're overdue for some new endorsements!
And if the Hedge Funds just drop all their suits, what then? Do you honestly expect the Treasury/FHFA to just openly admit they screwed everyone and return the GSEs back to their prior status? LMAO!
There's no way, ZERO, that the Preferreds are worthless and the Commons are worth anything. None, zilch, nada!
Commons aren't aligned with the Government unless you assume the Warrants will be exercised. I'm pretty sure 99% of the C-holders here do not believe or want the Warrants to be exercised. So, can you clarify how exactly the Government is aligned with Common shareholders?
And if you do believe the Warrants will be exercised, then anything over $20/share in the next 7 years is beyond ludicrous.
Do you think the Preferreds will catch down to the Commons based on 1-year performance? If so, that would be an excellent opportunity for more Common holders to Rotate into Preferreds.
Preferreds going down is actually an awful thing for Commons as more people will want to jump into the security blanket of contract rights, which Preferreds have. This just fuels a further downward spiral for the Common share price. We can call it the Ackman Phenomenon. As Prefs trend lower, Commons go even lower as The Rotation gains strength.
As I said in April, Commons are heading to sub-$1. Assuming Prefs drop another 20%, Commons will be on the Value Menu at your favorite fast-food joint by month's end.
Over 1/3 of his ~$870B portfolio is still in GSE Preferreds. Sounds like he's committed to me.
Small reduction driven by redemptions. Still has over 1/3 of his portfolio invested in Preferreds. And NONE in Commons.
At this rate, the Korean Peninsula and the Middle East get stabilized before the GSEs are allowed to recapitalize. We should've paid more attention! In the report from February, Mnuchin/Treasury made it clear that they intend to keep the sweeps coming through 2028. What's another 10 years at this point?
https://www.whitehouse.gov/wp-content/uploads/2018/02/tre-fy2019.pdf
Good thing Berko's & Perry's lawsuits are still on-going. The only way this ends before 2028 is if the Berko/Perry lawsuits end in a favorable outcome. Then the FHFA/Treasury might be willing to come to the table to make a deal. Otherwise, we have 10 more years of rape and pillage, then Receivership, and then everyone gets Cancelled.
Only a crazy person would decline Moelis now. Commons easily see $6-8 under Moelis within the first few years, then maybe $12+ by 2025. You could not ask for better gains! Those gains would actually Trump the Preferreds gains as well.
Maybe Berkowitz shorting the Commons this low was a blessing in disguise. Then he could argue the % gains would be more for Commons, so they couldn't argue the Preferreds were getting the better deal.
Moelis = Win-Win for everyone at this point, the Government as well. All the other plans means Commons stay under $5 for the foreseeable future, or they possibly end up getting Cancelled.
The Rotation from Commons to Preferreds seems stronger today than usual. Any reason for this sell-off? 2021?
Could not have said it better myself:
"the government remains in complete control and Ackman is right that the government maximizes its interests if preferred are to get par by maximizing the value of their warrants which would implicitly be exercised into common shares as part of a recapitalization."
https://seekingalpha.com/article/4166603-rafter-redacted-complaint-reveals-new-cofc-clues-gse-investors
Incredible summary. Seems like the Average Joe Plan is really gaining traction in the Senate. Even POTUS has supposedly endorsed it. And the Warrants are obviously never getting exercised, any other opinion is just crazy talk. I imagine the GSEs are buying up lots of shares with the prices so low these last few weeks. Good thing the Twins have all that Cash on their Balance sheet. Has anyone confirmed if the FHFA has authorized these buy-backs? It probably doesn't matter though, AJP says the GSEs get the final say, so i'm sure it's cool.
Honestly not surprised Berkowitz is dropping his lawsuits. They weren't going anywhere anyway. It's not like Discovery from his suits has yielded any pertinent information. I'm curious if Berko is still advocating for his clients and hedge fund brethren to continue to short Commons though. Also curious if he's pushed Ackman further into the Preferreds.
It's really no surprise that the Commons can leap-frog over the Preferreds. Capital Structure really doesn't matter during Conservatorship based on my understanding. Plus, since the Average Joe Plan is a definite lock, Commons take everything and Jr. & Sr. Preferreds get nothing anyway.
It's all coming together finally. Can't believe i didn't see this sooner
Wow! That is a major development. Must've missed it in POTUS' twitter feed. Can't believe Commons are still treading water with this type of announcement from the President.
Did Trump also acknowledge in writing that he informed the SEC that the Warrants are illegal and cannot be exercised?
Been away for a few days. Still playing catch-up. Are there any new supporters of the Average Joe Plan? Ackman sell more Commons for Preferreds? Any more Common stock buy-backs from the Twins?
Not seeing much new, just the never-ending Rotation from Commons to Preferreds. Prefs keep choo choo choogling along while Commons are stuck in the mud.
Choo Choo! The Rotation continues. Preferreds keep chugging along while Commons are stuck in the mud.
The Rotation from Commons to Preferreds is Accelerating. The accumulation of Preferreds by new funds continues to increase as well. All indicators point to Moelis as the ultimate resolution for the GSEs
Another day closer to Moelis via Admin Action. The Mnuchin Dilution Solution is coming! Seems the major players have already been tipped off as to what's about to happen, hence the big spike in Preferreds.
That is correct, they are not part of the float; however, they are issued and outstanding, so for someone to say otherwise is misleading.
There are 5,762,000,000 shares of Fannie outstanding as per their latest 10K filing. You're looking at outdated information. Use SEC's EDGAR site and not Yahoo Finance so you have accurate information.
I think you left out the important part of that article:
"Instead of increasing its positions in the common, it’s been buying up the junior preferred"
As previously mentioned, the Junk Status downgrade is actually a huge boon for Preferreds now. So i'm really glad you brought that to the attention of the board. It's likely the reason Preferreds have seen a 20% rally over the last few days.
Junk Preferreds back to Par baby!! Thanks again!
The substantial Rotation from Commons to Preferreds continues.
Utility Model will significantly cap Commons upside potential, not to mention all that nasty dilution forthcoming. Throw in Preferred Dividends being reinstated and the Commons are truly an awful buy at anything over $1. No wonder we're seeing such a mass exodus in this Rotation from Commons to Preferreds
Preferreds are Equity, not Obligations. Check HERA. The only Obligation will be Preferred Dividends, and then the capped appreciation of Preferreds won't look so bad in hindsight.
Not to mention, the shafting the Commons have coming via massive dilution to fund Preferred Dividends is going to be very painful indeed. Not to mention, the Utility Model is going to Cap Commons as well
Has POTUS been given the Average Jokester Plan you authored, Carlos? Do you know if he endorses it?
The Common to Preferred Rotation continues!
The Common => Preferred Rotation is so obvious it hurts my eyes! Not sure why there are a few people here who clearly can't see it. You can literally see money selling here and then immediately buying Preferreds on a daily basis.
Heard a few of the Average Joe Plan authors have officially switched sides as well.
Mnuchin Dilution Solution, then Preferred Conversion to Commons
The $25s will take the conversion at 10:1 and the $50s will take the conversion at 20:1. This is only after the warrants are exercised, additional dilution is factored in, Commons are trading at ~$1, and the GSEs are released from Conservatorship. Ackman realizes this also, hence the Rotation from Commons to Preferreds.
The Ackman Rotation from Commons to Preferreds continues. It's the only thing that would make sense. Selling Commons to buy Preferreds seems to be the trend lately.
Big rally on the Junk downgrade. This is actually great news for Preferreds as a lot of funds need exposure to junk debt. Thanks for sharing this as your update is likely the reason for the rally today.
Thank you for helping to educate the board on the various outcomes that may positively impact Preferreds and simultaneously negatively impact the Commons. There is still a lot of speculation regarding the potential outcomes, but being more heavily weighted towards the Preferreds seems like a no-brainer as it removes a significant amount of risk while still offering considerable up-side (albeit not $1000/share up-side, but substantial nonetheless).
This board needs more individuals like you. You, sir, are a gentleman and a scholar.
Excellent point. Lawsuits get settled with Preferred Holders, Bankruptcy is filed, and all shares get cancelled. Newco IPOs with new shareholders and FNMA becomes FNMAQ and, if shareholders are lucky, they get tossed into a new LLC -- similar to how WMIH was created for WAMUQ holders.
This seems like the most likely path forward at this time. Unfortunately, this is a Lose-Lose scenario for Average Joe's.
Now that Berko and his legal team actively endorse the cancellation of Common shares, you can see the rhetoric and ad hominem attacks starting to intensify against Preferred shareholders.
There is a glaring separation of interests at this point. On one hand, you have the Preferred Holders who just want their Contractual Rights honored. On the other, you have the Average Jokesters touting $1,000/share prices. And if you disagree with their "Plan," then you are labelled a nuisance and become a target of hatred.
We were all in this together, hand-in-hand -- Moelis. It could've been so much better. But now, we are clearly against each other. A point needs to be proven, and I think we'll see that happen soon enough.
Choose your side.