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Wow! Thank you for the link JGlen!
It is hard to believe that the GSE Heist was such an open secret that it was the subject of an hour long public forum in 2015 at Columbia University. Where is the press in all of this? Ackman made some great points that seem to be the basis of POTUSs framework. The capital requirements seem much higher but the emphasis on the rule of law and the need for private capital was clear.
Also Thank you Navy and all the other veterans on this Board who served the USA. God Bless and Happy Holidays! Best Wishes and hopefully well deserved profits for the New Year!
I want to go on the record and thank Secretary McNuchin and Director Calabria for their great effort on behalf of the general interest of the American People. I think we all know who is the swamp scum and it is not either of them.
Happy Holidays to Secretary McNuchin and Director Calabria! Thank you for your public service.
Hi Holden,
If FNMA and FMCC trade at $10, the biggest winners will be the UST. The FNMA stake would be worth more than $46 billion and the FMCC stake would be worth more than $ 26 billion.
Next time the mortgage banker and lobbyist swamp starts to cry about shareholder finally being treated fairly and equitably they should be reminded about the $ 30 bn over paynent and the value of their warrants - according to your valuation range - $ 72 bn or more. Getting paid 10% on their payments and over $ 100 bn after a series of corrupt thefts during past Administrations leaves a lot of room for reasonable settlements, past commitment fees and even for some fair housing initiatives funded by stock or warrant sales.
The corrupt swamp lobbyist want to rip off the taxpayers again or have the GSEs fund programs for their private gains. Let the UST sell their stakes and fund programs in the light of day.
Thank you Nats!
I did not realize that Watt never implemented a new rule. It is also interesting how integrated the approval process is with the formal systemic risk assessment process engrained in Dodd Frank.
Do you take any solace in the fact that Chairman Powell has come out in favor of private capital and perhaps Secretary Designate Yellen will be deferential to that view?
Doesnt seem like easy fodder for political hacks and the corrupt mortgage swamp creatures.
Thank you for the reply Holden!
Does this mean that this is the first effective amendment to the OFHEO rules?
Dont you think that it is fairly clear that the FSOC Committee has taken the position that private capital needs to be raised for the GSEs?
Do you think that it would be a heavy lift to materially change this trajectory within the FSOC structure since Yellen would probably be influenced by Powell's opinion that private capital is needed?
Hi Kthomp,
Do you think it is possible that new common equity can be effectively sold without a dividend since FNMA is not a growth company?
Can FNMA pay dividends on new common and not existing common?
If dividends are paid on any common dont they also have to be paid on the JPS?
Justice Breyer was right in that BO/JB effectively NATIONALIZED the GSEs and we are asking SCOTUS and POTUS to uphold the Rule of Law.
Wedbush price target of $0.00 memorializes this NATIONALIZATION. As Chief Justice noted the shares had trading value and if the GSEs haters have their way the current loss would over $23 bn loss in trading market value. If the GSEs traded without If the shares traded freely with the constant barrage of hit pieces and politically connected swamp creatures the value would be closer to $ 250 -$ 300 bn.
Perhaps Mr. Thompson should have mentioned the enterprise valuations for the GSEs or even how WEDBUSH clearly thinks the GSES were NATIONALIED when Justice Roberts brought up the current trading prices in the SCOTUS oral arguments.
Happy Holidays Amelia! Best wishes to all for the New Year!
Thanks Heist! Effective Date Feb 16. Looks like it will be hard to reverse - need to get the capital and make the GSE's attractive enough to raise capital. Dont see how they can unless the write down the SPSA and set the GSEs on the road to release?
Exactly! - one or several developments will occur by Jan 20th and then we will have the time period between Jan 20th and the SCOTUS decision. On the whole we should expect more positive developments rather than negative until the SCOTUS opinion. After SCOTUS things will get political so that is why Toomey and GA election are very important.
Who has been more right? - I thought it was your hubby? Give it until Jan 20th and then pass judgement.
Great post Guido!. Cap rates are at historical lows - best time to raise capital - especially JPS and sub debt. Meanwhile the GSE portfolio weighted average lives are lengthening since it may be a refinancing opportunity of a lifetime -especially if interest rates go higher. This is really a sweet spot to get the Recap and release on its way.
This is not a change. It pertains to short term liquidity - cash or short term investments not capital like stock, preferred stock or debt like subordinated bonds.
Lots of interesting insights regarding the CRP and SPSA - Thank you to all!
Seems like we really should question the probability that SM made a material change in his plans from the time he testified before the House and the time he participated in the WSJ interview. Perhaps things like the effective date for the CRP an how this may fit into a SPSA modification are much more germane. Really dont see the WSJ as something new but perhaps Mr. Market misunderstood SM before the House?- cant see why there would be a big change in policy or direction in a few days.
Thanks Kip and Holden.
Does anyone know if Watt also published capital rules? What set of capital rules are the new published rules changing? How hard/easy would it be to change the Calabria capital rules?
McNuchin
Kao
Hollihan Lokey
Growth Fund of America
Are already there.
Cant believe that the UST wont use some of that oil to lubricate a fair way forward.
Just to be fair to POTUS
1.We still have over a month to actually see what the UST comes up with. Maybe Ackerman has it wrong or wants to intentionally spin negatively? How different is the interview from what he said at the House Hearing?
2. The Majority En Banc 5th Circuity Opinion was written by POTUS Appointees. The 9-7 majority would be a minority without POTUS appointees
3. ACB, BK and NG all are POTUS appointees. We will see what impact these three will have on final SCOTUS opinion
4. The reason we have 45 billion protected from the NWS is due to the UST Amendment. Sounds like we will have more than that going forward.
5. If Toomey is going to become Senate Banking Committee Chairman it will be because close US Senate races in Iowa and NC stayed Republican. POTUS support is probably critical to keep GA.
Maybe HRC would have treated us better? Maybe JB will? I say thank you POTUS and say we expect PROMISES MADE - PROMISES Kept. Jan 20 is still after Christmas.
Here is an interesting timeline about how premeditated the GSE takedown was under Hank Paulson. Dont know how he could have morally stuffed the new JPS investors after all of this
http://online.wsj.com/public/resources/documents/fannietimeline0506.pdf
Agreed. Hank Paulson wanted to bring down the GSEs as early as March 2008 and everyone at GS probably knew it.
DF]Attached is the document used as the sourcing for today's ...
fcic-static.law.stanford.edu/cdn_media/fcic-docs/...
Steel was the Ex Vice Chairman of GS Jason Thomas is now at Carlye.
No - Hank Paulson seems to justify his actions with a super ego. I never understood how a follower of Mary Baker Eddy could be so viscous and vindictive. He not only destroyed shareholders he destroyed small banking communities across the USA who held JPS as part of their regulatory capital. Many well meaning local bankers and their customers were destroyed when he said the UST would honor subordinated debt but not JPS. Absolutely terrible mistake that made the suffering in parts of the inner city and smaller banking communities much worse.
Great Analysis Rumple - Thanks!
Thanks for explanation Robert!
I think it is going to be hard for Thomas and Gorsuch not to challenge or at least terminally neuter the Humpfrey precedent.
I am thinking that we could be 7-2 or so on the ultra vires act of the Conservator and 5-4 affirming the 5th Circuit ruling that the FHFA is unconstitutional. Robert could try to concur but with a narrower exception than the majority.
Is there a way that SCOTUS could go with the $ 30 bn damage solution rather than exposing the UST to the whole enchilada!
Agreed!!
Hi Holden - what is the path forward for the Derivative Suits?
Could the UST settle the Derivative suits while the Collins case is still being deliberated at SCTOTUS?
Can the capital raise go forward before the Derivative Suits are being settled?
Wow - Great work Robert! Thanks!!
Just to make the point again - even Ralph Nader thought this was wrong.
ttps://nader.org/wp-content/uploads/2013/05/lew-5-18-13-11.pdf
Hi Robert,
There are two of the Amicus briefs that address these questions. The Pacific Legal Foundation brief written by an previous Circuit Court clerk for Gorsuch advocates for the overturning of Humpreys:
https://www.supremecourt.gov/DocketPDF/19/19-422/154707/20200923131044714_FINAL%20FINAL%20Collins%20AC%20Brief.pdf
There is also another brief accessible via Scotusblog from New Civil Liberties which advocates for retrospective relief as a deterrent to the Adminstrative State but does not advocate for the overturning of Humpfrey's
I did not get the feel that Alioto wanted to go down either of these routes- did you?
Also - I dont think that MC was thrown under the bus. With the 5th Circuit Ruling the SG had to make a decision to support the Administrative State or not. It was not prompted by the Administration. Additionally - I think POTUS did not expect to loose and does not think he did loose - at least fair and square so in his mind Calabria would not have worry about another POTUS.
Hi Ano,
Could you share your perspective on the derivative litigation.
What do you think about the possibility and potential timing of the derivative suits?
How many derivative plaintiffs are there?
Can any one of the plaintiffs settle all the derivative claims?
If there is a settlement of the derivative claims would that affect the SCOTUS Collins deliberations?
Thanks in advance!
Agreed - Ackman has a reasonable near term target. Perhaps we get a better settlement but Ackman's target is nearly 3.5 to 4 times where we are now - that is probably unrealistic but it is nice. Maybe in 5 years we can be 10 times higher than we are now - tax free (if we dont sell) with some divs?
Agreed
Thomas has been asking questions for a couple years now - especially now with remote hearings.
Assistant Solicitor General of the United States
Amicus
The SG is trying to figure out what the F-- there claim is - that is why this poor guy is having such a hard time. It was a mob like theft and this is America. If SCOTUS holds that this a direct claim - Washington Federal and all the direct claims dismissed by Sweeney can be reinstated
If Sotomayor votes for shareholders - I say put her on the commemorative coin that the SG mentioned it his hypothetical.
God Bless SCOTUS! This makes me be proud to be an American!
Hope Yellen wont be a Fellon.
Do you think she will have the stamina to finish her term? Do you think she will treat the GSE shareholders fairly?
Pacific Legal Foundation Post - SCOTUS AMICUS
https://www.dailyjournal.com/articles/360644-high-court-should-clarify-that-agencies-cannot-break-the-law-without-consequence
Author clerked for Justice Gorsuch at 10th Circuit
Hi Kthomp,
I think this will be an interesting point to observe during oral arguments. I am hoping and thinking that at least a couple of the Justices will want to take a swipe at the Humprey's Executor precedent.
The long term infrastructure of socialism will be the expansion of the Administrative State and unless future reform minded POTUS's can replace future agency heads the creep of socialism and unaccountable government will continue.
We shall see - perhaps we will be pleasantly surprised by the breadth of the policy discussions. Personally this case should be the amno to do some real damage to the Administrative State.