well done. now what? are you still buying

You need to work on your summary or at least attempt to pay better attention if you are going to try to make fun. This is a disappointment as far as how attempts go. Try again. Try to say what i would say

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, s

Id say that the icba is significant

Note that the icba does not care HOW the government restructures its equity or what it does with warrants or spspa liq pref. Just that afterwards the companies can raise

Read the icba wish list. For the govt to restructure its equity stake in order to let fannie and freddie access third party capital and chart their course out of conservatorship

take immediate

action to resolve Treasury’s ownership based on the Preferred Stock Purchase Agreements with the goal of

allowing the GSEs to access the capital markets and to eventually exit conservatorship.

----
works for me. very nice!

Yup. Accessing capital markets means jps win

Nope

https://www.banking.senate.gov/imo/media/doc/whole_of_government_letter.pdf

the companies are retaining earnings, that's yuge... for me.

the legal rulings have gone sideways

Yes i play along with the court rulings. The court rulings are the truth as I understand the world works this way

i am recommending that there is no more material upside in that share class than you would have if you were invested in preferred instead, albeit with substantial more risk of being hugely disappointed by spspa conversion.

i am not wishing that common shareholders like yourself --- basically get the shaft in a restructuring.

i'm just saying that is what i expect in a spspa conversion scenario and so then the conversation is... why wouldn't we have that scenario?

i wish the best for you people, and am hoping that if there is near term admin reform there is still enough meat on the pending litigation bone to get a spspa writedown instead of a conversion... but i'm not sure .. and frankly you're right with respect to me not coming to trumpet the immense value relative to the current price of your share class.. i just think it is frought with risk and would rather play it safe.

Well said kind sir. Good luck to you

if you want to jump to that conclusion because looking out the rear view mirror that we've been driving downhill for 9 years, with a real descent in the past 2 --- that the future is downhill...

then by all means, go right ahead.

but your analysis does not reflect my forward looking expectations that jps get par out of this.

good luck kid.

Yes, my own approach to this was in my own opinion a bit weak and lame for the years leading up to the supreme court ruling in collins v yellen. I never expected the supreme court to get the law so incredibly wrong as it did here.

Since then, prices have collapsed to well below my cost basis and stuck around for nearly two years and counting.

I do not expect these low prices in preference shares to last forever. I believe the Biden administration has set aside a block of time, the next eight months, to address this situation of locked capital structures. Deese is out. Brainard is in. Bernstein is 2 weeks away from being promoted.

Even in the worst case (and in my view unlikely) where nothing happens — the companies continue to retain earnings on their path towards restructuring and ending the conservatorships — where eventually I believe that the JPS are made whole.

Maybe. Hope so for your sake. If they spspa convert you will have a sad

Preferred get par soon enough. Commons are a big ? Good luck but my view is under no reasonable circumstances will they materially outperform pfds

Ktomp is not wrong. Dude is pouring his heart out for everyone who reads this board regardless of the readers informedness. Kthomp is doing public service announcements of fact.

Yes you commons are being graced by the presence of some well informed investors… but you do know that he does not own commons… right?

Agreed. But it remains to be seen if facts are agreed upon here

Your last few posts have been good quality and i enjoy them even though they are no longer with us

while we all agree that the net worth sweep is illegal, the supreme court agrees to disagree and our opinion is worthless, whereas theirs is what matters.

we all agree the net worth sweep is illegal, and yet the spspa liquidation preference went up again this last quarter.. ggs

Did you hear yet about how the jury deliberations evolved over the course of rendering a verdict and how close or far we were from winning?

Did you hear if anything constructive happened during trial?

These are the types of things you may want to try to learn about as we go back to trial after a mistrial.

Also note that the damages model has not changed and will not change in this second trial.

Have you studied the damages model as it pertains to common shareholders? I do not know how much $ the commons dropped the day after the nws (the apparent basis for damages to jps — not sure if that applies to commons) and frankly i think this share valuation change is a retarded basis for damages but it is what we have got.

To be fair they have lost like $120b simce 2006. 2b shares x $60 per share

Now at 50 cents they are like $1b of outstanding value

For two companies that generate like $25b per year.

The tragedy has already happened. The value of their shares has already collapsed down like 99%. From this point moving forward their actual share value can collapse again, but they dont have $120b to lose, far less.

So from that vantage point they could lose theiir current $1b and end up with like $10-100m. That would be spspa conversion.

Anyway… the point I am making is that the real damage has already taken place as the valuations have collapsed to reflect a lot of it.

The only tragedy here is one of blind expectations. I have a friend named Matt who served in the marines and believes in truth and justice and has held commons for a long time and still thinks eventually he will become a millionaire on them. And if truth and justice were to prevail i agree he should be.

But the nws survived the bald ruling of collins in scotus twice now. And the warrants have no legal challenge.

The warrants alone prevent truth and justice but i see no way of stopping them

Anyway i just hope for a miracle but have told matt humdreds of times to get enough par value in preferred to retire and i think he probably could if he wanted to. He is a simple man and so am i.

Anyway. I find the plight of the commons relatable and sympathize with their losses and hate having to warn them about the spspa converting on them and destroying what little hope they have left but misplaced hope is an ingredient for sadness and possibly future learning experiences. Wishing the best but outlining the worst out of the kindness of my heart because i feel bad for these guys and gals who believe in justice

Whatever you think fully capitalized market cap is —- subtract from that the difference of capital requirements and how much capital they have now. That would be how much leftover value there would be if the companies were to raise that money. Compare that to the spspa liquidation preference

You quickly begin to see how the government can absolutely take over these capital structures and take all the existing commons in a restructuring to raise new third party capital

Like 99% plus dilution is not impossible

When i hear someone owns common shares i just think that they do not understand how enormous this spspa is and how a restructuring of an undercapitalized company works. Good luck, but owning commons is a fools paradise

Without litigation commons are nearly worthless. Spspa would convert to common

Like dumping a pool of water into a cup of pepsi and then common shareholders who had the pepsi thinking their drink still tastes like soda

You show great mercy coming back here to share your wisdom with these folks who think you are a bad guy wrongly so

Even if they are capitalized organically—?? the spspa liq pref willl be like a 100 foot wave crashing on a common shareholder dingy. Jps are like a buoy. They will be fine after the restructuring storm passes

Well. FHFA can do everything they can in their own power to further this goal/ mission. And then when they have done everything they can on their own, Treasury can monetize its equity position and allocate that money as funding for this

Largely depends on market conditions. What does the market estimate gse earnings on a normalized basis are? What multiple of earnings is the market willing to pay to buy equity at the time of captital raise? What is the differential between how much capital they have now and how much capital they need for this transaction? Lots of variables. I imagine that fannie and freddie are working on their capital plans with fhfa that are due in 3 months. Fhfa will oversee their implementation to acheive regulatory capital requirements.

No clue on brainard but bernstein is generally on our side. He was promoted

That scenario is not where we are right now. Hence the post I made. Patswil does not understand what is going on. The companies are not holding 3% capital and it will take them several years to get there at least.

I am a firm believer that if there was a simple way to zero out commons and jps, fnf would have been recapped and released a few years ago. Unfortunately, in a recapitalization you cant really zero out preferred, but the cram down zeroes out commons basically and for that reason i think it is attractive to the government

You thought we were already at 3% capital?

Take notes folks. If you are getting share estimates from patswil, his estimates include the assumption that the companies have enough capital to exit conservatorship.

jtimothyhoward
FEBRUARY 15, 2023 AT 9:44 PM
The NEC website states,”By Executive Order, the NEC has four key functions: to coordinate policy-making for domestic and international economic issues; to give economic policy advice to the President; to ensure that policy decisions and programs are consistent with the President’s economic goals; and to monitor implementation of the President’s economic policy agenda.”

I have argued that shifting from keeping Fannie and Freddie overcapitalized and over-regulated to the benefit of banks to capitalizing and regulating them on an economic basis to the benefit of low-and moderate-income homebuyers is in the best economic interests of the Biden administration. Since the NEC’s portfolio is economic policy, having new Director of the NEC take a fresh look at the Fannie and Freddie conservatorships–at the same time as the new Chair of the Council Advisers, Jared Bernstein, is doing the same thing–holds out a realistic possibility that a sensible, fact-based approach to these two companies may indeed be forthcoming. I’m not predicting this–there are very powerful interests working against it–but I do think the odds of it happening are higher today than they were a few weeks ago, and not insignificant

the idea being that after the government monetizes its equity position to commons that the JPS can convert to common which will lessen the amount of new money that will have to be raised by new third party capital buying commons by the amount of JPS converted.

you do know that this is a restructuring right?

like, right now, gov accrues all earnings to itself, that needs to be restructured.

in restructuring, priority order sometimes matters. according to govt's own documents JPS need to be dealt with.

i honestly don't care if they convert me or not --- but i expect they will if it helps them bridge the capital raise gap.

fortunately for you i think you have relatively a 10-20% personal position in this -- and so i think you will be okay. i would be concerned if you were 80-100%

To replace sandra thompson at fhfa calhoun would have to go through the confirmation process. As such, i think your prognostications of him going to fhfa are incorrect. The confirmation process takes a long time. Like several months at the shortest. Plus sandra thompson just got sworn in by vp harris in december i think. Cheers.

Also is it huntington beach whale Or

Hunt beach whale. Are you advocating for hunting beach whale?

I wonder if you will show an ounce of regret when this restructuring is complete if commons do not do as well as you hoped for misleading so many people?

I know for me at this point nearly everyone discounts what i say so i dont have that problem anymore. Maybe the same for you

Fun times

why don't you? what's your twitter handle?