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I'm glad there are lawyers here too and not just borderline level-2 flat-earthers.
Fannie Mae is forced to pay $491 million in damages + interest for a shareholder lawsuit claiming @fhfa & Treasury swept all profits from the companies and violated the fair dealings contract clause because no sane person would ever expect the Government to take everything, and… pic.twitter.com/QFNlaDuWbv
— Alec Mazo (@Alec_Mazo) October 31, 2023
Thanks Clarance, your post provides a lot of insight.
This shows that Wise Man was wrong to claim that the Lamberth damages cannot and will not be paid.
The good news is that only $324.25 remains to reach this admittedly presumptuous price target.
Rallies of dilution-prone OTC stocks are a competition to decide whether there are more idiots or more stocks.
Volume of chicken orders?
Sandra now orders even more chicken. This led to a significant increase in revenue last quarter, showing that there is a strong correlation between chicken orders and revenue growth. What could be more natural than to continue on this tried and tested path?
The most important thing in a state-owned enterprise is to ensure maximum employee satisfaction.
Mindless conflation of climate and housing policy.
The good news: Dividends are already kind of back.
The bad news: They're not going to shareholders. Instead, they're going to the "public the FHFA serves" in the form of affordable housing programs paid for out of the enterprises' inadequate cash capital.
"Pleasant" side effect: This drags out the conservatorship, to the benefit of the public.🤮
Why do Navycommander and Wise Man post turd emojis 💩 when I provide uncommented links to two government documents?
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173121071
I'm glad you were able to answer your question yourself:
In Dec. 2020, Susan Wachter e. a. even wrote about it in a key CBO paper.
Biden, Yellen, Sandra wouldn't talk about it publicly because that would signal their interest in recap/release. Commons would go up in price, reducing dilution. Which would mean less $$$ for the Biden admin from the recap/release "deal".
Has anyone here ever considered that a decline in commons' stock price is in the government's best interest?
Hey Genius, the context indicates that I meant that Fannie shareholders get nothing from Lamberth. Also, the post I was responding to was about Lamberth damages.
The Lamberth damage goes almost entirely to the JPS, only Freddie commons get 6 cents peanuts without interest. Fannie commons get nothing at all. Also, the JPS will not be destroyed by the common cramdown, they will actually rise to close to par from it. I don't call that fair, but that's the way it's most likely going to be.
It is a noble donation, which at the same time prevents legal proceedings for the exercise of warrants.
Not true. Commons are the main source of recapitalization, even when diluted to 1 cent. The sheer number of them adds up to about $100 billion in pre-SPO shares.
This includes the commons from the (most likely) SPS and JPS conversions.
The government and its collaborating courts have already maneuvered themselves too deeply into the mess with their lies to "honestly" get out of it. No matter how fiercely the fighters for justice revolt against them.
The lies will be "discovered" and condemned by historians later, perhaps in 50 years. Those who profited from this scam are mostly dead by then.
If, as seems likely, the SPS and JPS are converted simultaneously into commons, it is conceivable that the government will forego additional warrant exercise. The dilution would already be so extreme that an additional warrant exercise would hardly make sense. There is not much difference between owning 99.5% and 99.9% of all pre-IPO commons.
They treat the GSEs as if they were fully nationalized (i.e., as if they were government entities allowed to finance affordable housing plans). On the other hand, they refuse to compensate the legacy shareholders for this quasi-full nationalization, as required by the Constitution, and they refuse to add the over $7 trillion in MBS to the U.S. national debt. A cunning, scheming, vile game.
The question is at what rate. I don't think the rates at which today's shares (commons & JPS) will be converted into SPO (pre-IPO) shares - tickers probably FNM and FMC again - will be determined by the price differences of today's shares. To put it more clearly, commons are likely to get heavily diluted, while JPS will probably get only a small haircut on par value.
In principle, this could be successful, but as I wrote in my last post, there is a terrible collusion between politics and the judiciary. They want to exploit FnF shareholders to the maximum, deprive them of their rights and sell them for fools. The government has infinite financial resources to achieve this goal.
That's why I'm a pessimist regarding legal solutions to this mess.
A lawsuit would probably only result in a few cents per share, as was the case in the Lamberth trial.
What is certain is that the government will have to resell the new commons (probably with FNM and FMC tickers) that it will receive from the SPO ("IPO"). We are talking about 40% of the final market capitalization. 60% of the final market cap will come from the subscribers of the new shares. It may well be that some of the subscribers to the new shares will be the same people who buy parts of the government's 40% stake. In effect, this creates large - and possibly concentrated - market and voting power on the part of the new owners.
What's certain is that Trump, if he wins the election in 2024, would be in a better position to release the GSEs than he was previously in 2016, as FnF have now built up over $100 billion in retained earnings. The question/problem is what to do with the "shadow" SPS LP, which have grown by the same amount (now over $300 billion).
CET1 is relevant for release. And CET1 is still at -$137 billion, so a release in 2025 would be impossible without a huge capital raise.
Yes, Mnuchin stopped the NWS, but he did it because he was forced to by law (5th Circuit).