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There is 1 Jan and 3 Feb opinions, so a Justice or two have to double up in their opinion writing, right? So maybe all bets are off about who writes Seila...
OFC SCOTUS could also just not produce an opinion and defer everything till Fall - cos Federal Judges do whatever the hell they want, whenever the hell they want, as we now all know
Only ONE opinion today, not us, was written by Alito (gulp) in DHS vs Thuras... an immigration decison 7-2
Was a March decision, so one left from Jan and two from March including Seila
Breyer and Roberts left, so I bet Roberts writes Seila and god knows what is in it lol
No good deed goes unpunished lol
Alito -- rock ribbed conservative and hopefully indicates a conservative majority
If it is Breyer, then Roberts went wobbly again and a liberal opinion
If it is Roberts, who knows? lol Roberts is now the only real swing vote
Summary of remaining decisions:
http://amylhowe.com/2020/06/22/the-terms-remaining-decisions-4-from-january-and-february-10-from-may/
One left from January and three from March (including CFPB case) and 10+ from May...
Yup, no baseball or B-Ball, so this "excitement" has to suffice...
TBH EPL has now kicked off, so I have watched 3 soccer games this week -- and 9 goals from Man City and Liverpool! So I am happy
CV 19 has now stabilized in UK and Europe, so they get to return to normality. In contrast, the governors of Florida and Texas, at the direction of the US President, have put those states into CV 19 explosions
Not sure NBA will restart in Florida bubble now, since DeSantis and Abbot have trully shit the bed on virus management
Never thought I would see Texas go back to Democrats in my lifetime, but Abbot, and the President, are doing a great job of it... bye bye John Cornyn!
HERA specifies that a deputy becomes Director, but I have not read the relevant section in a while...
I cannot remember the conditions under which Otting became director - maybe someone else can?
It would make Calabria subject to Trump's whims...
FFFacts, if Trump fires Calabria then deputy becomes Director until congress confirms a new Director, but that could take a while
I think it is 80-20 they find CFPB is unconsitutional and make the Director fireable, but what relief they provide?
70% chance merely prospective relief
30% chance retrospective relief
Depends on Roberts sticking to precedent of seeking to discourage agency over-reach with punitive response
We shall see before July 15th
yank, I have followed Ackman for a long time. The first hedge fund went under after all. JCP was a debacle... and the ones you mention.
BUT Ackman has been good on identifying BIG asymmetric opportunities, I made a great deal on GGP with him. His bet on the market before the pandemic was a legendary gain...
Berkowitz is not a bozzo, was fund manager of the year for a reason, but he now seems to be managing the fund like his family fund. JOE is interesting but still overpriced imho -- and how does all this coastal low lying land look when the seas rise? And boy did Lampert sucker him in on Sears...
Want a bozzo? Eddie Lampert
Sticky please -- judicious overview of the present situation and recent action
So it is a legal MUST, you think there is a legal precedent that means it would be illegal for Treasury to exercise its warrants.
No one has filed any such suit, I assume you think that is because such suits are only timely upon exercise of warrants?
I am surprised Ackman's very expensive lawyers never informed him of how mistaken his claims about the warrants were, especially since Ackman's view about he warrants were the rationale for his large investment in the common
Sounds like Robinhood for OTC stocks...
Is that that moral MUST, is it a legal MUST, is it a practical MUST?
When you say the "warrants must go away" I am not sure which "must" you are talking about -- all three look implausible to me.
Maybe it is a Biblical MUST because usury is wrong?
Louie, the CET1 capital has to come from somewhere. Getting enough capital interested in a raise of this magnitude is no small feat
And don;t say what a wonderful opportunity GSE's are -- the political risks are real, the regulation is pain in the ass, and the history is toxic
Getting $33 billion in capital in a conversion a no brainer, since you could lock in that capital BEFORE the offering of new common and hence lower the burden for that massive offering. Like Citi, one converts at the average price of the common for the previous 30 days - what could be fairer than that? Market price.
That makes the offering of new common smaller and hence more viable - and less expensive...
A Kthomp noted, and as I posted yesterday, JPS conversion is an option explicitly mentioned in TREASURY PLAN and then included in most recent FNMA 10-K by Calabria. This is not just people mentioning conversion, but the only people with power here -- Mnuchin and Calabria
I find all of this, and points raised by Kthomp, Michael Kao and others, very persuasive. But we can all make different evaluations and then make our own investments accordingly... GL to you and all longs
Amen to all of those points!
Lol, if you have ever read Carney then you know KT is not Carney
I am to provide you with research now? lol
One could easily argue GSE's are FAR worse off than Citi, since technically GSE's have HUGE capital deficit of billions
So the capital situation is dire enough such that they need to meet the CET1 capital standard, rather than a punitive raise of $33 billion one can get that amount painlessly through conversion -- then do the rest of needed capital from a raise of common and/or new pref
Try reading this professional who makes a very clear case imho:
Re: Fannie/Freddie-Forest vs. Trees. Imho, mechanics of recap/release less likely to be influenced by maximizing gov profit ("trees") and more likely to follow the "forest" of attracting private, 1st loss capital while preserving the affordable housing mandate & 30 yr mortgage.
— Michael Kao (@UrbanKaoboy) June 22, 2020
Two basic points:
First, courts have affirmed that FHFA as conservator has NO fidicuiary duty to shareholders;
and,
second, courts have affirmed that FHFA as conservator is supposed to maintain companies in sound and solvent manner
Converting JPS to common INCREASES CET1 capital and hence furthers RnR, and an offering, thus furthering solvency
Consequently the courts have also found that such a decision by FHFA as conservator would NOT be reviewable by the courts
Well, you only need to stay home after Nov 5th (Bonfire Night in the old country) since that is when the rubber actually hits the road...
lol... yeah, that would be pretty mad
Good for Tim, it really is outrageous, offensive crap which could lead people astray to their financial, and hence personal, cost
Donot, FHFA as concservator, and Treasury, will negotiate a new SPSA -- just like they negotiated the first one
This is not a question of Treasury's right, Treasury had no right to implement the NWS -- rather FHFA standing for companies agree to NWS in return for something in the amended SPSA
So, this time around, FHFA might agree to let Treasury convert senior to common, since it furthers RnR, and that would be formalized in another amendment to SPSA -- though obviously there are all kinds of permutations
Lots of posters here get all confused about what is in EARLIER SPSA -- but FHFA and Treasury are negotiating amended (ie new) agreements and they can agree to what they like (consistent on FHFA's side with its obligations as concervator which was not respected in third amendment imho)
It was even worse, the fabrication du jour was that FMCC would be wound-up and only FNMA recapped... just made-up stuff...
So we should all be outraged at that kind of junk -- kudos to Yanksghost who has spent so much time debunking this nonsense
And yet with Citi, the Treasury did NOT do that... hmmm?
Sticky this please, very important read IMHO:
Re: Fannie/Freddie-Forest vs. Trees. Imho, mechanics of recap/release less likely to be influenced by maximizing gov profit ("trees") and more likely to follow the "forest" of attracting private, 1st loss capital while preserving the affordable housing mandate & 30 yr mortgage.
— Michael Kao (@UrbanKaoboy) June 22, 2020
Replace the “won’t”’s with “we do not know” and I largely agree - market is clearly Negatively worried about SCOTUS ruling - hence depressed price of pref AND common
Navy, you are right that Treasury may not be seeking to maximize profits in a cramdown -- Treasury did seek to maximize profits when it converted prefs in Citi to commom
Instead, Treasury has other policy goals as Michael Kao has been emphasizing in the FnF case
This is always worth a read:
Re: Fannie/Freddie-Forest vs. Trees. Imho, mechanics of recap/release less likely to be influenced by maximizing gov profit ("trees") and more likely to follow the "forest" of attracting private, 1st loss capital while preserving the affordable housing mandate & 30 yr mortgage.
— Michael Kao (@UrbanKaoboy) June 22, 2020
Thanks for the info on Citi, since the example looks like it is the most instructive of what could happen here
It is also instructive that Treasury did NOT seek to maximize profit in the Citi case, since it had policy goals that went in other directions
Michael Kao has been making this point, and exploring its import, about the FnF case:
Re: Fannie/Freddie-Forest vs. Trees. Imho, mechanics of recap/release less likely to be influenced by maximizing gov profit ("trees") and more likely to follow the "forest" of attracting private, 1st loss capital while preserving the affordable housing mandate & 30 yr mortgage.
— Michael Kao (@UrbanKaoboy) June 22, 2020
Louie, I was responding to those who say NO ONE is talking about conversion, or that it is illegal etc
I agree that it is likely a combination of these options and maybe others
I actually think you can expect all of the bulleted options except for receivership:
So I think they do write down senior
I do think they stop the NWS
I do think they issue new pref and common
I do think they do a JPS conversion
I think the bones of what will happen are right here in the FNMA 10-K and Treasury plan... just IMHO
But I don't own a monkey, so it is nice he works for me here :)
Maybe listen to Treasury and what it has to say (you can see why the earlier passage from latest FNMA 10-K is in there):
https://twitter.com/HoldenWalker99/status/1274042523875508224
Interesting passage from Treasury plan about options in recap that deserves careful study:
https://twitter.com/presvnconsv/status/1274035781858975744/photo/1
That is just abuse and not a response to a reasoned argument with evidence -- good luck if that is what is driving your investment decision making...
Louie, just read any of KThomp's many clear and readable posts over the last couple of weeks... laid out pretty clearly
Or go read Michael Kao's summaries on twitter which are here:
https://twitter.com/UrbanKaoboy
Kao's pinned first tweet right now spells out case for pref
Amen to that...
Took a huge drop with Trump’s election, I wanna hi I could do well if polls continue to point to Trump loss. But I went for divvy paying stocks I like
Hedge 25% with pref - how does it hurt? Good prices to buy at if they hold through Monday
On other hand, if SCOTUS rules big we can both take some profits next week cos there will still be bumps in the road... and then who gives a crap? Lol
Fingers crossed for SCOTUS
Converting JPS to common will make me a commonholder so “Go common (after conversion)”
TRCPA, point is they did look for SARS vaccine but corona viruses have features that make that tough
I think the country will be fine. I am with Buffet who rightly says do not bet against USA
However, any politician betting their program on CV lessening, or on a sudden appearance of a vaccine, is going to disappoint people - so I think the blame is only going to increase for continuing lack of ANY federal response - there are NO more cases in NZ. Here we are ramping up in states with delusional governors
I have been researching stocks that benefit from Trump loss like Mexican stocks... I hope FnF are not treated by market as needing Trump win
I do think we have some tough virus months ahead...
No, the offering would be NEW shares on top of the 80% From government warrants AND the common shares into which $33 billion of pref converts
It is a shit ton of new common...