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"If it was an investment and not a loan, then there should have been no dividends during conservatorship. That’s what the plaintiffs’ lawyers and a couple of judges have said. The government can’t have it both ways.
"
Guido2,
Excellent point. If it was equity investment then there should have been no dividends that would have depleted the capital of already under capitalized companies.
But mafia conservatorship went one step further and started NWS to bankrupt the companies. How did Judge Lamberth and Perry appeals court ignored this?
"This is not legal without a formal tender offer.
Plz read up on securities laws.
Probably be helpful"
Companies buy back their own shares from the market.
Why do they need to make formal tender offer?
"I agree, they should be buying JPS so they can retire them and not have to pay out dividends at over 3x the current interest rate.
It would also be an easy 2-2.5x increase on the $FNMA money invested wink
"
Who knows, FnF may be already buying JPS from OTC markets.
Why pay par value when JPS can be bought from OTC for 30%-35% discount of par value.
"$FNMA Commons continuing to trade is adequately compensated by almost all standards.
Expecting anything more would be considered over-compensated."
Why US Gov is not doing the same with all other company shareholders?
"
;Why @FHFA Should Direct @FannieMae & @FreddieMac to Relist Today: https://t.co/YrAxhaGhQD @USTreasury @MarkCalabria @stevenmnuchin1 @larry_kudlow #capital #liquidity #value #safety #soundness
— joshua rosner (@JoshRosner) January 24, 2020
"but it is equity to the company that issues it"
Yes, only for the purpose of regulatory capital because of non-cumulative dividend.
"Someone just dropped a LOAD of cash on FNMFO. 140 shares at $39,650. Guess someone does not believe all the B/S about the perfs."
JPS have good value up to certain limits.
But do not bet on cheap common shares. Wall street bondholder play the game of "wipe out CS holders" with distressed companies.
But FnF are no ordinary companies and not in financial distress. FnF are Gov's policy instruments and Gov is not going to allow wallstreet traders to play their usual games with FnF.
"JPS are equity"
The meaning of equity is ownership in the company.
JPS do not have any ownership or voting rights in the company.
JPS are considered equity for the purpose capital only. It is just because of non-cumulative dividends.
JPS are basically fixed interest bonds but lower in preference to debt holders.
"What you say is well and good, but it doesn't matter because it is all just an opinion. Did the GOV only have nefarious motives to impose C-ship as you cite? Maybe. But did the GOV maybe have genuine concerns of a liquidity crisis triggering a depression and 25% unemployment? Some economists have so stated. Is the role of Conservator or Regulator to end the C-ship or is it also to assure another one is not lurking in the future? The answer to this is "maybe" also."
YG,
Thanks, you have correct facts and correct view of illegal acts of FHFA and Obama administration (Wallstreet bureaucrats).
Hank/Bush and Obama Administrations may have had genuine concerns about economy and jobs etc.. But these people had confirmed plans/plots in causing and precipitating the crisis and using the crisis for their benefit.
Besides using secret, illegal and nefarious means to achieve these goals were not necessary and not sanctioned by laws.
Gov can not commandeer private properties for public use without fair compensation and without complying with laws. FHFA and bureaucrats under Bush/Hank/Obama/DJT administrations have consistently chosen to hide behind 4617(f) and mislead to avoid fair judicial and public review/scrutiny. Few judges have rightly pointed out these violations and ruled in favor of shareholders.
During court trials FHFA/Gov will find it embarrassing to defend most of the decisions made before as well as after conservatorship. Courts may not award damages to shareholders for many PC reasons but will surely rule in favor of protecting FnF from overt bureaucratic abuses. This in turn will benefit both JPS and CS shareholders.
"Yes, there were plenty of confirmations of Big Trouble in River City."
Yes, But FnF were well capitalized and their loan losses were far less than other private FIs. FnF were no where near the brink of defaulting.
BTW the reasons for FHFA conservatorship was to use private FnF for public use (without compensating for the servie). That is to provide liquidity to illiquid markets and bailout privat FIs. Behind the scenes the sinister plan was to destroy FnF and give their business to Wallstreet private companies.
FHFA conservatorship was never meant for bailout of FnF because FnF were not in need of Gov bailout. Why would FHFA force massive asset write offs and force unwanted expensive loans on FnF? If Gov wanted to help FnF it could have simply provided a credit line.
If FHFA conservatorship was to help FnF then FHFA would have allowed to FnF to just pay back the loan and end the conservatorship. But FHFA went further to force NWS on FnF to never allow FnF to exit conservatorship.
These can never be considered as voluntary consent by FnF/BOD/CEO or FnF share holders.
"Do not forget :
Gov instituted a GAG Order with prosecution giaranteed.in first minutes of take[over.
Gov threaten BOD for interfering at time of National Emergency which results in criminal action and being prosecuted.
New BOD was installed the first order of business day of takeover. Strange those New BODs were available so quickly. Can you say pre-planned.
"
Yes these are good points. The mob gang was preparing for this for years. If one goes further and alleges that the gang even precipitated 2008 crisis in order to push their agendas, it may not be out of order.
"Fannie/Freddie Investors were stripped of ALL their rights
priveledges/voting upon the IMPOSING of the Conservatorship
which transferred to FHFA ....
so they HAD NO ABILITY TO CHALLENGE the Warrants ..."
JTH is a pro JPS holders (or Pro moelis). So JTH is in favor of UST benefiting from warrants. Basically UST warrants deprive FnF the ability to recapitalize easily without wiping out CS.
JPS holders' (moelis) plan is to convert JPS to CS after wiping out the current CS holders.
There is no way FnF can recapitalize with UST exercising the unlawful warrants. It makes no sense financially. Exercising warrants will destroy FnF and it will be total loss for JPS and all CS holders including UST.
"The fact is that coercion would be very difficult to prove when the boards had been at the helm of a 90% share price decline in the prior year, the default rate and foreclosure rate were skyrocketing and an independent study by Morgan Stanley revealed heavy loss risks and even Barrons, a highly respected business media was citing risk of bankruptcy to the GSEs."
Did foreclosures and heavy losses happened only with FnF or most other private FIs also?
Overall Share prices declined for all the companies and market liquidity froze but FnF were not in any default risk.
Besides there is well document mob like conduct by Hank and Wallstreet team. FnF board never requested any Gov help and also resisted Gov takeover. After imposition of conservatorship, there is well documented forced asset write offs and mob like bailout/investment. In the end there is NWS as ultimate mob action. Besides bureaucrats have fought hard to keep the conservatorship documents hidden from public as if it is a super secret national security matter.
Can any judge or jury looking at these events, ever think that there was no mob like attack and coercion?
"I concur that the preferreds were harmed by the Treasury's Net Worth Swindle. But their fight should be with the Treasury, not the commons. Judge Sweeney by accepting the derivative claims and rejecting the direct claims has laid out the road map for a resolution. This involves the Treasury returning the overpayments. $116 billion by my calculation; $124 billion by hers. Once the dividends are restored, preferred will automatically get around par."
This seems to be correct thinking.
Corporate FnF were the entities that were directly harmed by unlawful actions by Hank team and obama administration. FnF shareholders were indirectly harmed as a result of unlawful harm inflicted on FnF.
Judge Sweeney probably likes to reverse the unlawful harm inflicted on FnF so that indirect harm inflicted on shareholders also gets reversed. This also seems to be political correct way to go, since there will be no damages awarded to shareholders and also no windfalls.
"Judge Atlas probably won’t rule for some fairytale accounting. GSEs will get their overpayments back and SPS and 10% dividend survive."
RuudG,
As in the past, some JPS holders are coming up with these outlandish ideas.
SPS liquidation preference value goes up and down based on draws and repayments as per SPSPA. Third amendment changed it and made SPS as investment that can not be paid back.
If one goes by original SPSPA, SPS can be considered as paid off. Only remaining imposed obstacle is warrants. Warrants needs to be cancelled considering mob like conduct by Hank team and BO administrations. Another easy option is to let FnF buy back warrants at nominal price. There are no other easy options if WH wants to end conseratorship.
"So, come back to earth, and stop talking to teenagers. Do your job instead and release fannie from conscrewtorship."
LOL, Very great and prudent advise to Calabria.
If Calabria is interested in outer space and cosmic matters then Calabria can surely apply for jobs in NASA. Calabria is also welcome to send FnF haters to rarefied outer space from this earth.
Most important thing to all is, Calabria should explain to people of this country about why FHFA is continuing with conservatorship when White house has decided that FnF should be released as soon as possible to minimize any further risks to taxpayers and economy..
"It's called Fraud on the Court, and yes the plaintiffs get to present the false statements, and if ruling decision is warranted, damages can be assessed, such as removing an attorney from the bar."
You are correct.
"I believe that the current case in front of Lamberth is a transfer of a Fairholme case from another judge
There was a different original case - I believe the first to some judgement - in which Lamberth granted GOV motion to dismiss - said 4617 precluded intervention - said some not ripe anyway - and told us to go to Congress to change the law as courts could not help
I do not remember that plaintiff but assume that one is dead"
Remanded Perry case in Judge Lambert's court is based on direct claims related to damages. So everything matters and all the facts do matters.
"and I assume Lamberth asked for documents on the NEW (handed over) case as he could not go back to a settled case"
Settled case? which one.
If ruling was based on false statements then plaintiffs have the rights to re-litigate.
https://www.law.berkeley.edu/our-faculty/faculty-profiles/john-yoo/
yooj@berkeley.edu
Tel: 510-600-3217 | Fax: 510-642-3856
329 Boalt Hall (North Addition), Berkeley, CA 94720 MC:7200
Faculty Support Contact: Drew Kloss
"There will be NO IPO until the GSEs are OUT of Conservatorship"
This is Release and Recap plan, that I have been supporter for long time.
"Release and Recap plan" is the most safe, viable and risk free plan for all.
GSEs should start building capital as if they are never going need to raise any core capital from capital markets.That makes GSE most attractive to capital markets. This is the most simple common sense plan
"Looks like a $FNMA Commons to JPS Rotation is occurring yet again.
The Polar Express has officially broken down frown"
CC,
I do not have any specific agenda to promote cs or jps, and one against another. I own both CS and JPS in both FnF.
My personal view is that, JPS will get up to par value plus may be damages it they are lucky. Not sure about CS but there are good chances that CS will get good returns.
Substantial CS dilutions is very unlikely.
Obi, Thanks.
"Since a final decision at trial has not been entered, any appeal made by the parties now would be an interlocutory appeal that must be first certified by Chief Judge Sweeney under 28 U.S.C. § 1292(d)(2). See:"
Obi,
Do under interlocutory appeal, proceedings continue or stop.
Agree 100%
Guido2, Thanks.
"Comments to Clown Calabria are increasingly HOSTILE ! ."
We need to tell the squid that it is very easy if he walks the talk.
Just follow rule of law. Open up all the secret documents. Be honest and truth full to all stakeholders. Finally do your job instead of just talking.
"Until that happens, it's best to Sell the Pops knowing $FNMA Always Drops wink"
CC,
You are only telling the half the story.
$FNMA also goes up. Net result is $FNMA has gone up.
So it is best to buy when it goes down.
This is how people make money.
Todays CNBC News:
SEC is investigating Chinese traders for stock manipulations.
Along needs to be careful about his post.
"How could a remand go back to a jury to decide fixes from en banc ruling?"
Golfbum22,
We are not legal experts. Just making some reasonable guesses.
There was no trial in District court. It was a summary judgment which was appealed and remanded back to district court. So now judge has the option of revised summary judgment based on laws or a trial based on laws/facts.
"But I believe remand means judge Atlas alone decides based on en banc decision
Which means judge only verdict on govt punishment and sentencing on fixes that need to be done
"
If Judge decides on summary judgement based on laws then no trial. But other wise it would be regular trial based what was requested.
"smile No it is not mark or steven, it is me Ano, you state “back to the original deal” “Everything fair and square as if sweep never happened.”"
If the cases go to trial, defendants are sitting ducks because of so much lawlessness in the last 11 years of FHFA conservatorship.
The best option for defendants is to cancel the original SPSPA & amendments and come with a new agreement compliant with laws.
https://www.inquirer.com/columnists/fannie-mae-freddie-mac-mortgage-refunds-20191209.html
Did U.S. steal $300 billion from investors in ‘coercive’ takeover of Fannie Mae, Freddie Mac?
Updated: December 9, 2019 - 11:16 AM
by Joseph N. DiStefano
"But if Sweeney finds the 2008 takeovers were illegal, the government might have to give back the money and lose the value of the warrants. And Bush Treasury Secretary Hank Paulson, former New York Fed chief (later Obama treasury secretary) Tim Geithner, and others could be hauled into court to explain “whether or not the government used improper means to coerce the boards” and expose the secret measures."