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Nope. My odds on amount go down, but my speed of recovery goes up.
I have ZERO expectation of losing anything on my investment in Fannie Mae pfd. ZERO!
Meanwhile, huge and publicly vocal supporters like Glen Bradford slip into Seeking Alpha articles that they sold their common shares off. Now THAT should be disturbing to common stockholders coming from the arguably loudest voice in Fanniegate for years of effort campaigning for shareholder rights claimed as stripped by government. Scary, actually.
JMHO.
Desperation from Cacheris ruling revealed in Perry, Saxton plaintiff filings. There is palpable fear in the legal suite.
"Momentum lost is claims denied."
Sounds like an update from Delaware isn't coming anytime soon, potty.
FNMFO.
Nope. Not so. Preferred shares bounce back along with common shares with any favorable ruling in Perry or elsewhere.
144 shares traded on August 10th for $12,000 each. There is spotty trading throughout 2016. The convertible can be traded, tho it may take some effort.
If you look at the "re:" to which you replied you will understand why there is no point in my trying to answer your question. The Fannie Mae story is being skewed to promote one outcome only and no other views are welcome. I find the cleansing of Fannie Mae alternative content quite amusing, actually.
GLTA.
You said FNMFO shares would be worth $75,000 per share by mid-summer, 2014. They are trading at $12,000, yet, today.
Great call, there. LOL.
Glad you have all this figgered out.
The part of investing that gets routinely overlooked here is that risk profiles are not identical for all Fannie Mae shareholders. What is appropriate for some is not correct for everyone. The upside for commons is significantly higher, under the right set of circumstances, than for preferred shares. But the risk equation for common stock could drive a worthless valuation or cancellation in receivership, where the liquidation preference of preferred stock likely finishes largely or totally in the money vs. par value which varies by series.
Most of the major investors active in expensive plaintiff litigation own only or largely a portfolio of preferred FnF stock. Pershing Square is the one holder of commons. In Fannie Mae, where he is reported to own around 10% of the O/S total, that would be 100 M shares. He predicts a $20 S/P with success in the courtroom.
Here's the inside deal. If you buy FnF commons in the $1-2 range and they go to $20, you make $18-19. If they go bust, you get $0... If you buy a FnF preferred like FNMAS at $4, it will go to $25 when the commons go to $20 and you make $21 and an 8.25% div. payable at some point + $2.06 per share. If FnF go bust, you get liquidation preference share in proceeds likely to total at least $16 per share and carry very little risk profile.
Common shares bought for a $20 S/P expectation are a good buy for those that can afford the worst outcome. Common shares bought against some $179 to $379 expectation are more like buying a lottery ticket than investing in a rational thesis. The $179 S/P uses a 17X multiple; AAPL trades at a 10.5X multiple. The $379 S/P assumes treble damages which by law cannot be assessed a U.S. Government entity. That is deranged thinking!
I have about 6% of my stock portfolio invested in FNMAS shares. I am actually thinking about doubling that stake. For a retiree whose income is derived from dividends and share price growth, that is the risk tolerance that I am comfortable with. My other holdings are largely in large caps spread across multiple sectors... Apple, Cheniere, Morgan Stanley, Continental Phillips, Norfolk Southern, Barclays, reits like Annaly and Armour, plus some pin money invested in a few "special cases" like Chesapeake, Twitter, Square and FNMAS. My dividend return is around 8% and is sufficient to pay taxes on gains and mandatory withdrawals from my IRA account. To me, that is where the "fit" with FNMAS suits my needs. The best case is for Fannie to refinance, release and resume paying divvies on its approx. $60 B in outstanding junior preferred shares. I do not see redemption as any near term possibility since The GSE Act requires an offsetting new preferred issue for any old ones retired. So the JPD is the art of the deal for me, not just the liquidation preference value.
Said differently, I am relentlessly persecuted on this board for being John Carney or some hater of Fannie because I discount the dreams of beau coups zeros behind the FNMA share price of today and have a less grandiose expectation of more modest gains and risks which meet my personal objectives in the Fannie Mae of tomorrow. Good luck in finding a strategy that works for you.
JMHO.
Yes, the Supreme Court relies on its own rulings for its decisions. That is the first place Justices seek precedent guidance... in previous SCOTUS rulings that could or do apply in the new case presently before the court. This is why I cited the Doe v. Bolton and Roe v. Wade examples of landmark decisions where all manner of precedents from state courts, lower levels of Federal courts and earlier Supreme Court cases were part of the end decision.
I expect the Appeals Panel in Perry vs. Lew will equally revisit all manner of rulings before issuing any verdict. There is nothing humorous about this that I note.
My expectation is that a dismissal of the appeal is the most likely outcome. The second most likely outcome would be a ruling consistent with Lamberth and Cacheris that FHFA acted properly within HERA, but UST acted beyond the law with Amendment 3 and must return any funds to FHFA that exceed the original 10% SPD arrangement, or apply them against outstanding liquidation preference. Remand, to me, is a remote possibility.
Ruling today?
JMHO.
I keep repeating the same thing, over and over, and you keep dodging the point from the onset of this thread. Another poster asked, quite respectfully, if the Fannie Mae Appeal matter wasn't simple to resolve as a basic question of whether government acted within or beyond the bounds of HERA. You told him that nothing was simple because there are no legal precedents on which to base a decision. I stated that Judge Lamberth's ruling and Judge Pratt's ruling provide substantial basis for a decision. YOU then the devolved into name calling of me being confused and ignorant for stating the truth.
I understand that neither Lamberth or Pratt are binding precedent on the Court of Appeals. I stated that at least 3 times. But you just look for some platform to proclaim you are right and I am wrong, so you just say the same misleading junk repetitively. The truth is and will remain as follows:
1. Judge Lamberth's ruling was comprehensive, well presented, logical, and relied heavily on judicial precedent. The appeals court can choose to affirm his ruling without requiring any further legal precedent.
2. Judge Pratt's ruling to dismiss Continental-Western's complaint comments extensively on that court's agreement with the Lamberth ruling. This opinion can certainly be considered as corroborative of the validity contained in Lamberth.
3. Judge Cacheris' decision tends to dismiss many of the claims active in the Perry Appeal, as revealed by the exchange of letters filed by opposing legal teams before the court. This decision may also serve as yet another validation of Lamberth.
The judicial panel may, also, rule in a totally opposite way, and that decision would overrule Lamberth if that becomes their decision.
Your claim that no precedent exists, in answer to the original question asked, is false. There is no BINDING precedent. And your claims that lower court rulings are somehow meaningless and offer no clue to the Appeals process are misleading and untruthful. Read the Pratt decision as I posted it multiple times, yesterday. Page 19 is very condemning of the Perry plaintiff's claims. The better word, actually, might be compelling. I believe the appeals panel will rely on such content as worthwhile precedent. You can disagree... your right.
JMHO.
"The Supreme Court never ONCE relied on a Superior Court ruling in order to come to its decision. So you are wrong."
Duh! Of course, the Supreme Court relies on its OWN ruling in order to render a verdict. But lower court decisions are constantly cited in SCOTUS rulings as contributory to their end decision. This was true in both Doe v. Bolton and Roe v. Wade landmark cases. I chose those two examples because they are well known among legal scholars and each relies HEAVILY on lower court rulings (Georgia Court in Doe, Federal Court in ROE) to form an eventual verdict at the highest level.
Efforts to minimalize and discredit lower court rulings in Fannie Mae litigation as being somehow irrelevant, worthless, meaningless or inconsequential are disgraceful and totally misleading. Judge Pratt's ruling has considerable merit to how the judge's panel may rule in some eventual decision. They, too, may choose to ignore it in favor of their alternative opinion. THAT is how the law hierarchy works. But it is grotesque to portray Judge Pratt's decision as some ridiculous joke that has no standing, no merit, and no impact on any eventual ruling.
I know better. Soon others may learn the same lesson the hard way.
JMHO.
Doe v. Bolton... Roe v. Wade says you are wrong. The minor leagues provide the ammo to the big hitters on SCOTUS. Lower court rulings are the backbone of legal due process asit moves up the line to the highest level.
JMHO.
NO, that is patently FALSE. An appeals court is not obligated to abide a lower court ruling. If it objects, its ruling to reverse stands under court hierarchy, unless further appeal is later filed and accepted. But you are making it sound like the lower court ruling is meaningless and must be discarded. That is absolutely, totally false and frequently not the case. Many lower court rulings get affirmed. Happens all the time.
Judge Pratt's ruling is NOT good news for the Perry Appeal. Neither is Judge Cacheris' ruling.
Those are FACTS.
No confusion here. Even at the SCOTUS level, justices prepare their decisions citing court decisions that support their eventual determination. The judges are not limited to decisions brought to light by plaintiff or defense attorneys during the trial phase. The judge cannot introduce evidence, but usually does cite precedence as support for his/her eventual verdict. This is why judges have law clerks on their staff. Ted Cruz even served as one under Justice Antonin Scalia who recently passed away.
Nothing real complex or far out involved in this observation. It is indisputable fact.
"a direct dismissal of the case in question" is the point YOU are missing. Judge Pratt's lower court decision to dismiss is a precedent that cannot be ignored. Simply because it was not rendered in an appellate court has no bearing on its corroborative relevance in Perry vs. Lew. Judge Pratt states that he would have agreed with Judge Lamberth's ruling were the roles reversed. He never stated that he ruled on the selfsame case, pointedly identifying the differences for which he dismissed Continental-Western's claims. So C-W is NOT the same case in question, is it?
Really? Then why in the Perry appeal did Hamish Hume cite numerous case references as precedent to support plaintiffs attempt to overturn Lamberth? He even cited Jacobs, Hindes that has not even progressed to oral arguments in a lower court.
http://www.glenbradford.com/wp-content/uploads/2016/04/4623Boies.pdf
See page ii, also known as page 4.
No, that's right, that is not how it would work. Lamberth rules against complaints about Amendment 3. Judge Pratt rules similarly against similar complaints from a different plaintiff regarding Amendment 3. Judge Cacheris rules on much of the same rejection of complaints.
It's just like Fanniegate dominoes starting to fall. You can parse your way out of a message board disagreement, but not in any courtroom I ever knew.
JMHO.
So you are claiming that Judge Pratt's ruling to dismiss is not a legal precedent?
Really?
There was no additional discovery requested because plaintiff attorneys thought they had a winnable case, as is. They were proven to be wrong. That exposes why Docugate has become so important... because without some further, smoking gun, Perry is D.O.A..
And, just for the record, Continental-Western sought to introduce new claims to the complaint and got turned down, cold. So that obvious setback does not exactly grease the skids for the impact of additional junk dredged up in later discovery in related actions. Read what Judge Pratt stated on page 19 in footnote #6:
http://gselinks.com/Court_Filings/Continental_Western/14-cv-00042-0068.pdf
Judge Pratt's ruling confirming Lamberth and recently supported by Judge Cacheris' ruling make dismissal a virtual certainty.
JMHO.
I didn't put a link in the message for Lamberth's ruling, I linked Judge Pratt's ruling which you seem intent to dismiss for some reason. Fear, maybe?
By the way, the content of Judge Lamberth's ruling does serve as appropriate precedent in any appeal and is fully admissible, even if challenged by the plaintiff legal team. Judge Lamberth offered extensive case background to justify his decisions.
No, the precedent cited is from Judge Pratt who confirmed the validity of Judge Lamberth's earlier decision. Judge Pratt's parenthetical commentary can only have been inserted as a statement that had he not dismissed Coninental-Western for the reasons stated in his decision, he would have dismissed it under the same rationale brought forward by Judge Lamberth.
I beg to differ. There is considerable precedent, obviously including Judge Royce Lamberth's initial ruling. But there also is the subsequent dismissal ruled by Judge Robert W. Pratt in the Continental-Western case filed in the U.S. District Court, Southern District of Iowa, Central Division.
A complaint almost identical to Perry was dismissed on February 3, 2015.
http://gselinks.com/Court_Filings/Continental_Western/14-cv-00042-0068.pdf
I understand that dismissal was partly on the basis of similarity to Perry and questions of the parent company of C-W being involved in the Perry case, but I specifically refer you to the lengthy commentary from Judge Pratt that confirms the correctness of the Lamberth ruling. This can be found on page 19, footnote #6.
JMHO.
Yes. I'll briefly explain why. Judge Cacheris ruled that shareholders ceded all normal rights to FHFA under HERA. So they cannot sue FHFA. But that does not preclude a litigation against Lew or UST. If the court rules to invalidate Amendment 3 as actions not authorized under HERA or facilitated by a taking. This could likely lead to a court order directing Treasury to revert back to the 10% SPD mechanism and apply any overpayment to a reduction in senior liquidation preference.
This creates an environment where the case ends, the 100% sweep is modified, but conservatorship remains and is not subject to any judicial review. This is the ultimate default outcome where limbo prevails until sagging income forces another draw, either with or without help from another external event... or... by an eventual wind down imperative succeeding in the new legislature in 2017.
The only gamechanger in this stalemate would be a major success in some other litigation which I have always thought would come via Jacobs, Hindes in Delaware. But even that looks like it has stalled in directionless inactivity.
JMHO.
Here's a wildcard for you. Suppose the court rules that FHFA actions are not reviewable, but Treasury acted in violation of the law by accepting a 100% sweep forever? This is not all that farfetched and backdoors a way out of the judicial review, and potential access to a solution that meets some of the issues brought forth in the Perry complaint.
Cayne and Cooper legal teams file letters docketed in the Perry case on August 23 and August 24 regarding the Pagliara decision in Virginia. Both files can be viewed on gselinks.
What I find most interesting is how Hamish Hume's letter (which is the preceding document in the queue) was met with huge interest and dozens of posts, here, signifying great importance, but there isn't even a "whiff" of reporting on or interest in these new filings. Could that be because Pagliara's complaint dismissal is a setback for Fannie Mae shareholders and, as such, is grounds for concealment here as detrimental to the celebration of certain coming wealth?
I believe that the Pagliara decison is a step closer to liquidation in receivership. The appeal in DC is failing. Sweeney is going nowhere fast. And Jacobs, Hindes has yet to even file an amended complaint or be given a date for oral arguments.
The lights are dimming...
JMHO.
Both of Pagliara's cases were designed to serve a different master. As legal steam appeared to be ebbing in the DC appeal and with Sweeney's never-ending Docugate delays, Pagliara brought suits to attempt to inject a fraud claim into the legal discourse. This claim, if driven forward by discovery of "what's in the books" could advance shareholders rights in a liquidation if the net worth runs out and FHFA pursues the"wind down" process.
At the time, I viewed his actions as more driven by fear of no progress and a desire to "cover his bets" than anything else.
I also keep reminding everyone that Delaware is one of the few jurisdictions with a Court of Chancery where stay orders are commonplace under common law principles of property rights. So at least in the action targeting Fannie Mae, his suit was not as undeserved to me than others seem to believe. There is a reason why a movement to remand is underway, now, in Delaware.
I bet that the Judge Cacheris decision could be one of those "silent but deadly" decisions that comes back to stink up subsequent plaintiff actions that remain pending.
JMHO.
A stay is precisely what the Delaware Court of Chancery is known for, which is why I keep bringing it up. Thus, the remand request. Too bad nobody wants to discuss anything they didn't introduce.
Hedge fund plaintiffs are leading the privatization pathway. Holding the preferred shares is the key to a reorganization to privatize the GSEs, make elements within Congress happy... the Grover Norquist balanced budget cretins like Paul Ryan and the Tea Party... and steer the mortgage finance MBS market and insurance businesses to a new cadre of privateers, sub-profiteers.
Bruce Berkowitz of Fairholme was one of the first to step into the privatization fracas. But don't leave the Perry Capital crowd out of the picture, either. There is a reason why these fund managers are willing to front $ gazillions in legal expense to litigate shareholder claims. And there is a reason that they hold preferred shares, like Timothy Pagliara, Glen Bradford and other notables hold similar stakes in preferred equity.
These guys are really the ones that want to steal your Fannie?
https://www.thestreet.com/story/12108118/1/freddie-freddie-hedge-funds-could-claim-victory-go-home.html
These guys could give new meaning to "wind down" of Fannie Mae and Freddie Mac. By some definitions, that appears to mean wind down the old junk with a 30year payoff to common shareholders while all the business, going forward, goes to the preferred shareholders in an entirely new, private entity.
http://online.wsj.com/public/resources/documents/FairholmeOffer.pdf
Then, again, maybe Berkowitz and Perry are really just philanthropists, looking out for the financial health of all the little people whose savings, retirements and pensions were affected by the housing crisis. I guess it is plausible that these icons of Wall Street will throw their high profile investment clients under the bus to help out Mr. & Mrs. Mainstreet recover their common equity's original worth. Yeah, right.
JMHO.
I sold all my Seritage, yesterday before the crash started. Bad call by Buffett on that one. Brucie fell in love with the Sears dinosaur, years ago, and I think he was just infatuated with Lampert's success with Autozone. I used to moderate the SHLD board and got sick of the pom-pom shaking. It is Dead Man Walking,now.
I bet FNMAS and FNMA will continue to dip until some further ruling comes out, but I doubt Berko will sell anytime soon. FNMAS dump, yesterday, was retail traders failing to understand that a setback in court is a step closer to liquidation and a payoff for pfd's. I will buy more at any S/P below $3.
It is easy to track. On the opening I-Hub screen for FNMA, click on the tab for "trades". All T trades are listed in the "type" column with a T notation. You may have to download some free software to view the file with Adobe Reader.
Yesterday's chart shows 3 T trades for 330,000 shares executed after the 4PM market close.
Why would that be so? Hamish Hume just updated the Appeal's Court on the Viszel ruling, despite arguments having concluded.
Bethany McLean just recently released an extensive article on precisely this sort of stuff, so please spare me the anti-Carney garbage. Carney and Joe Light are two of very few reporters that truly understand the full gamut of issues in Fanniegate. That's why they get reviled and discredited by so many Fannie Mae fans... because they expose the inconvenient "other stuff" that has a lot to do with the pending legal matters before many,many judges in many, many jurisdictions.
JMHO.
I wonder if Judge Brown knows that White House Chief of Staff Rahm Emanuel was on the board of directors for Freddie Mac just prior to his appointment to serve Obama. I wonder if she also knows that Magnetar was once a campaign contributor to Emanuel? I wonder if she can connect the dots and see why a lot of document privilege has an actual basis in truth? I wonder if Brown knows who the joint book running managers and co-managers were for the $ billions in stock issued by Fannie Mae just prior to the crisis? And I wonder if Brown knows who among these were derivative counterparties to Fannie Mae? I wonder if Brown has studied synthetic CDO's used by hedge funds to help polarize the financial crisis?
Many questions. Most never questioned on this or any other blog or discussion forum.
No answers.
For the truth to ever really be known and acted upon, all aspects to Fanniegate need to be investigated, not just the one's that support some financial windfall in some spurious claim laid out in court complaints filed by people that mostly knew what the risks were and bought or held shares for their investor and pensioner clients, anyway.
JMHO.
That erroneous judge would be Judge MoeRon Steal. You know. The MIA judge-turned-partner in a big law firm he entered via the revolving door who promised an amended complaint in Jacobs, Hindes would be filed last Friday? Maybe his amendment is on the same "fast track" as his other efforts in that Delaware matter, noting that his last filing was on, what, March 3rd, or thereabouts?
But I don't want to be unfair by calling him MIA, since, an all actuallity, there simply is NO ACTION in Delaware that I can see. And it looks like Judge Cacheris just stockpiled a lot of kryptonite for Judge Sleet to mete out on The Man of Steel in both Pagliara vs. Fannie Mae and in Jacobs, Hindes.
JMHO.
Yes, I mistakenly skipped a step. Judge Cacheris ruled in Virginia on the exact same litigation filed in Delaware by Timothy Pagliara. So Judge Sleet will likely rule as did VA court. Then rule on Jacobs, Hindes in like fashion.
It's just like I said.
Dominoes.
I think everyone is missing the real point. Pagliara vs. Freddie was NOT an ultimate lynchpin case, nor is the Pagliara vs. Fannie case that will now inevitably be tossed. The point is that the Freddie dismissal was issued by Judge Sleet, the same Delaware Judge that will rule on Jacobs, Hindes in the very same courtroom on many of the same issues. Denying Pagliara access to the books only matters in the rationale for why this decision was rendered. That part is HUGE.
Read Judge Sleet's opinion memorandum. He says HERA legally stripped shareholders of any rights. He also cites judicial protection. He states that Pagliara as a shareholder has NO RIGHTS because they were all transferred to FHFA.
This decision is a bonecrusher to every other pending shareholder litigation and will be cited as a precedent in all of them, likely reinforced by a subsequent ruling in Jacobs, Hindes. It's just like watching a line of dominoes start to tumble... Lamberth, Wheeler/AIG no damages, consolidation, Judge Thapar recuses, dismissals,delays and a once thought dead case against Freddie reinstated in Cincinnati Fed Court, Pagliara vs Freddie bazooka'd... and Jacobs, Hindes soon to be decided by the same judge that ruled to dismiss, yesterday.
JMHO.
How can the Delaware Fannie Mae case be resolved quickly when the lead attorney hasn't filed a court motion I have seen since March?
Do you think he maybe plays a lot of golf?
JMHO.
Very appropriate analogy. In Meritor, investors snapped up cheap distressed shares for around a buck and after a 20 year ordeal in the courts, got four bucks. What great news for Fannie Mae shareholders that bought at about the same entry price... YOU ONLY HAVE ANOTHER 12 YEARS TO WAIT TO GET YOUR 4 DOLLAR PAYDAY.
A dollar invested at a 10% rate of return would be worth $6.73 compounded, after the same 20 years.
But, hey, thanks for exploding the myth of the $379 share price. LOL.
JMHO.
Actually, GM via warrant sales, paid back all but about $10 B of their approx. $50 B bailout. I have little respect for their failure to pay back the balance, although the government made the call to excuse the balance for some rationale I will never embrace.
I believe previous bailouts at "the New Chrysler" in the Iacocca days and the Boeing collapse involved some equity backstop, but I wouldn't bet my life on it.