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TRCPA - I wouldn’t throw Sotomayor and Roberts under the bus. Roberts likes to play both sides of an argument - and he did just that. Sotomayor really locked into the conservatorship, just couldn’t say FHFA. Those are cosmetic, superficial thngs to focus on.
I think the 3rd amendment is toast. I think SCOTUS could deal with remedy directly, or let Sweeney in the court of claims, or the lower courts in the 5th circuit deal with remedy.
Gorsuch was asking the gov why the Seila remedy couldn’t work?
There was a lot of good things said and I’m confident the PSPA will be deemed paid in full and the NWS cancelled, unless Mnuchin gets there first. Then $124 billion takings claim can proceed in the CFC before Sweeney. Mafia sayings and how Fairholme is essentially the same for all other cases in front of her, including WaFed, which is being appealed.
FFFacts - that is simply not true. Thompson said Plaintiffs would be fine with HERA in its entirety being vacated.
Whether or not the courts goes in that direction is unknown.
Folks need to understand that a Justice who has already made up their mind on an issue isn’t going to ask a question about it. No topic was missed.
I think Gorusch, Sotomayor (who has conservatorship understanding), Thomas, Roberts, Kagen, Alito, were all asking about what to do about the FHFA in it’s entirety.
I think Breyer’s “Cousin Joe” example about selling his property was not a well informed example, and Thompson answered the question perfectly, “in this case you’d be suing yourself.” FHFA agency vs FHFA conservator.
The basic “nationalization” logic voiced by Roberts, Sotomayor and Breyer is most likely backed by all more conservative justices. I feel pretty good about the NWS and a remedy.
I think on the easier NWS 3rd amendment question and some form of remedy - whether actionable from SCOTUS or remanded to the lower courts - I think that issue will enjoy a comfortable majority in favor of FnF.
I don’t think one judge buys into a 12 conservatorship where for 8 years all profits were swept to Treasury, effectively nationalizing FnF, which was said over and over again.
Thompson did very well and kept his answers all aligned to legal precedent. He got the $124 billion overpayment in there a couple times. Folks don’t appreciate how he kept focusing on legal precedent and hypothetical worlds.
It did not sound like anyone was in support of the NWS. Thompson, at the beginning, put the $124 billion dollar price tag. He did go lower on remedy near the end but did cite $124 billion dollar overpayment several times and Gorsuch referenced the high number in his questioning.
Direct vs Derivative we’re front and center for Roberts and maybe two other justices. That will be an interesting issue.
I think on the single director issue, that will follow Seila comfortably.
As for vacating the entire FHFA, I think Thomas, Gorsuch, and maybe a few others may be onboard but probably not a majority.
I think u mean the Kardeuschbags ...
Agreed - it was an "ends justify the means" kumbaya article veiled under a liberal, Gov saved us agenda.
I'm a moderate - Fiscal conservative - Pitch Forks and Torches!
Gaby spanked him good ... she may need a real man ... no swamp creatures in DC ...
Keep your eyes on the prize. PSPA write down and Consent Decree are what is actionable over the next 40 days.
SCOTUS will be interesting from a Q&A session, but the ruling won't come out for a while. And let it be said that the entire conservatorship is at stake, unlike what many want folks to believe. The fall back is the NWS and $124 Billion. Not a bad fallback position ...
Here we go!
Sweeney deems WaFed Identical to Fairholme. Mafia commentary doesn’t bode well for government in Fairholme et al!
It can't be any more clear that Sweeney deemed Fairholme and WaFed in a materially identical way.
FFFacts ... you do realize at the latest FSOC meeting Calabria said he doesn’t know how many more FSOC meetings he will be attending ... that’s the current events ...
kthomp19 - you are 100% wrong yet again ... too exhausting to refute every falsehood given your track record ...
HoldenWalker or JPS_Converted ...
Unlike JPS Bagholdens, we can read, as can hedge funds ... and institutional investors ...
If remedy is allowed, the catman is out of the bag ...
kthomp - thank you for the link. And it can't be any more clear that Sweeney deemed Fairholme and WaFed in materially the identical way. Correcting you guys is exhausting ...
http://www.glenbradford.com/wp-content/uploads/2020/07/13-385-0100.pdf
Page 11
kthomp - Incorrect ...
From page 11 of the WaFed appeal
HoldenWalker aka JPS_Converted (I'm sure he'll now pop replying to yourself)
From page 11 of the WaFed appeal - and frankly it's exhausting correcting you.
Maybe volume has slowed to a crawl b.c everyone is full ... KISS reasoning
Maybe Treasury has instructed SEC to monitor FNMA, FMCC, and all jps for manipulation and is forcing MMs to comply ... Nice dream
Still legal there ... I can be thy neighbor ... just don't covet all of 'em!
TRCPA - your scenario is better than the scenario I've put out there. I hope at minimum it is your scenario that is correct.
Delicious!
Navy, or others, can you explain this Treasury report in greater detail as to why the warrants will be cancelled?
I want to be eating crow ... I want to be 100% wrong and continually made fun of for the rest of my life on this topic.
Happy, when will the SPO be over the next 5 years?
Let’s expound on a possible conservative and controversial theory. The below works off the premise the PSPA is deemed paid and NWS cancelled which most agree will happen (except for Joseph replying to HoldenWalker, uh, I mean JPS_Converted).
Let’s say for arguments sake warrants are executed as is. No new term sheet being worked on that Glen Bradford said is being worked on currently that would obviously have updated percentages of total float ownership and anti-dilution clauses, along with fair market value calculations on the strike price, which is customary of such agreements.
So now the fannie float goes from 1.15 to 5.75 billion, where the gov owns 80% and sells their shares. Now Fannie is free and is earning a conservative $11.5 billion per year (rounded for EPS). That gives you roughly an EPS of 2$ per share. Without dividends let’s discount the P/E that the Congressional Budget Office gave us at 15 and revise it down to 10.
We now have an SP of 20$.
Let’s look at why Ackman says Commons outperform JPS in almost all scenarios, which I’m assuming the very few scenarios where JPS did outperform commons included the PSPA common share cram down which we almost all universally agree won’t happen, even you, HoldenWalker, uh, I mean JPS_Converted.
With a 5 year cap raise plan, that could easily be extended = more retained earnings.
The cap rule is seen by many as too high and could easily come down by 10s of billions under a Biden admin = less capital needed to be raised.
Treasury returns the overpayment of $30 billion ($20 billion to Fannie), which almost meets statutory capital with $10 billion per year over 5 years starting with $25 billion.
Treasury cancels the warrants = major increase in SP = 2 to 4 times higher.
Treasury amends the warrants to only 50% of the float with or without a revamped execution price.
Treasury amends the warrants to only 25% of the float with or without a revamped execution price.
SCOTUS torpedoes FHFA and requires $124 billion be repaid.
SCOTUS torpedoes the whole conservatorship and nulls everything and gives FnF everything. I’m flying private jets for the rest of my life.
News flash, they aren’t going to prematurely convert JPS just to dilute commons into oblivion - good luck if that’s your investment thesis.
This is why Ackman said what he did ...
Holden - 5 years to raise $100 billion for Fannie:
Let’s see. So Fannie has - lets round it to $25 billion. Without getting anything back from the gov that leaves them with $75 billion left to raise. At a conservative $10 billion only for the next 5 years, that gets you to $75 billion.
With fees having gone up and market share for FnF ever increasing and a housing shortage and a continual population increase, you could easily make the case for $15 billion per year.
Now that leaves you with $25 billion left to raise at $10 billion earnings per year. Pick a share price with a P/E of 10 (which is discounted for no dividends). I’ll say the S/P is anywhere between $30 and $60 by 2023.
Same person
Holden - they are not “mutually exclusive”... u may want to look up the definition of the term ...
Bradford says relist on NYSE - couple that with Ackman $10 ... I’ll take it in “short order!”
If warrants get cancelled and 8 years to retain, we are going to $200 per share eventually.
Could be as early as Feb 2021 to June 2021 the latest. I think ACG said most like March/April 2021.
I hope you guys are right that they go away ... It would be the right thing and I’d be ecstatic.
It also stands to reason a consent decree would give FnF at least 5 years to raise capital considering they wouldn’t want an economic down turn to have FnF deal with an adverse FHFA re going back into conservatorship.
JPS_HoldenWalker - I do recommend the article. We will be listed on the NYSE soon per Bradford and Gaby from ACG. Couple that with Ackman’s $10 prediction ... great article!
They could leave JPS with no dividends ... endless possibilities!
Ya gotta give Bradford credit - talks about his mom's retirement and he labels himself the “boy who cried wolf” too many times ...
As related to the investment, nothing mentioned about Ackerman ... would’ve been nice but he would’ve been promoting the “enemy.”
Nothing mentioned on timeline for raising capital ...
As we all know the capital restructuring is related to the PSPA amendment ...
Also talks about getting relisted to the NYSE ...
Warrant execution would require a term sheet and I’m confident that term sheet would require updated terms.
Crunch time over the next couple weeks ...
Jeddie - ok, but ACG seems to have their act together and I can’t fault one of the single largest investors in the company. I’ve also said the warrants would be amended many, many times.
Let’s say the warrants are amended to 10% of the company? That is 140 million shares and if there is basically minimal public offering to none and capital is generated via retained earnings, the gov at 10$ USD = $1.4 billion for the gov. At $100 per share, that is 14 billion for the gov.
As you can see you could start playing with the percentages.
Could the warrants be cancelled by Treasury? Yes.
Could SCOTUS crush the warrants etc? Yes.
Could new lawsuits be filed if the warrants are executed and claw back the dividends? Yes. Maybe put an injunction in place preventing the warrant execution until ajudication? Yes. Which could take 5 or 6 years and then FnF could settle and repurchase them? Yes.
There’s a reason ACG and Ackman are saying what they are saying and not everything we don’t understand is a conspiracy theory, or very harmful to shareholders.
Per ACG
The 4th amendment according to ACG is writing off the PSPA as paid and cancelling the NWS.
According to ACG the warrants are in play although per Gaby they would be used by a Biden administration.
I know ACG gave an update recently within the past two weeks and the timeline was extended out ... I would be interested to know what was said during that update.
Gaby confirmed the longer the retention period for capital the better commons do.
Gaby also stated that JPS conversion is a separate issue than the PSPA amendment and consent decree. She said negotiating with JPS will be done by Morgan Stanley and JPMorgan at the appropriate time, with the implication that FnF’s financial advisers will be running the capital raise effort.
So JPS conversion would not be part of the Big Bang that everyone talks about. The Big Bang relates to PSPA 4th amendment (deemed paid and NWS cancellation) and Consent Decree. A Capital Restoration Plan would follow and at least, according to the ACG timeline, a 4 to 5 year tail to raising capital. Exiting conservatorship has a time window according to ACG from mid-2023 to jan-2025.
45 days ago Gaby stated several times she felt there could be a settlement before SCOTUS Dec 9th. We will see this week and I know there was an update over the past two weeks.
Gaby also said NYSE relist will happen as the OTC doesn’t allow large institutional investors to take positions on FnF. That, with Ackman’s $10 prediction, could get us to the NYSE.
The scenario above was the most likely if Biden won the election and he did. There were roughly 5 scenarios if Biden won. One interesting scenario was the PSPA amendment (both items) but no consent decree. Gaby says commons do very well under that circumstance as FnF can retain earnings but probably no equity raise.
Mnuchin and Calabria have to agree to a consent decree.
Has all the public bs been done at the hands of funds who want cheap shares or is this politically motivated... politically motivated is worth the digital paper it’s written on, which is nothing ... go where the money is ...
Let’s see what happens this week ...
Why not? That’d be awesome!
Jog - from ur lips to Mnuchin’s ears ...
Action - the better question is why are ACG and Ackman talking about them staying? I think the terms will be changed to benefit FnF compared to how the warrants are structured now.
You guys can’t ask me. I don’t know. I only know what ACG and Ackman have said. Ackman says $10 in quick order. After that we would need information to see how much higher we are going.
Just need to get on NYSE.
Jog - I get it. If it were so simple than why are ACG and Ackman stating the warrants have a use to increase the SP? I want the cancelled as much as the next guy/gal.
As for our jps friends, you guys can go negotiate with JPM and MS for your tiny conversion ratio sometime in late 2021 or 2022, when we’re on the NYSE. Take a back seat ...
I agree warrants should be deemed paid, or make them part of an overpayment settlement.