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Nays (9):
Sherrod Brown (D-OH)
Robert Menendez (D-NJ)
Jeff Merkley (D-OR)
Jack Reed (D-RI)
Chuck Schumer (D-NY)
Richard Shelby (R-AL)
Patrick J. Toomey (R-PA)
David Vitter (R-LA)
Elizabeth Warren (D-MA)
I suspect there is a lot of meat in that public appearance.
He is risking another set of lawsuits.
DNU, even these scenarios may not happen in a straight line. For example, the money to be returned (if that ultimately happens) could still stay with the government as a credit for all future 10% dividend payments up to the amount in question. Just as a safeguard that the government will be paid out. It's a crazy outcome. But one the government may push if they lose in courts.
Ted Olson, Cooper and the mutual/hedge funds are smart people. But not the smartest ones.
They have to find a way to disengage from the current relationship they have with the government. The current relationship is: hedge money is evil and the culprit and the administration is the savior in the name of taxpayers. The administration dominates the conversation.
For as long as hedge funds and their lawyers don't change the basis of this relationship, the government astutely will continue to exploit it and use them as a scapegoat. Under the idea that the public needs protection from them they will continue to feel totally safe stealing from Fannie and Freddie, violating the law for the sake of a higher goal and perversely misreading HERA statute.
Hedges funds are being used. They have to find a way to disengage and leave the government weak in its arguments.
I would not be surprised -after Mel Watt's public appearance- that hedge funds/Berkowitz will come up with plan B (or plan C) and not wait for the litigation to unfold.
Well... I agree with this and have never purchased any of those crappie stocks.
Problem is his day to day job is conserving assets to reach a sound and solvent condition to end the conservatorship, which courts have already established as a temporary condition. He can't escape that fact or risk crossing a legal line.
The basis of white house to support such a bill is this:
"If you've got a business you didn't build that."
Obama believes government rescued the entities so now they own them. Regardless of what was signed in 08'. This is reflected in the bills they helped shape.
Translation of above:
"Companies earning a bunch? You -shareholder- didn't do that!"
I always thought the GSEs were simply issuers of MBS and the bundlers were the Goldman Sachs' and other major crooks. Your vision would be a good way to stop greed dead in its tracks.
I am thinking Buffett does not favor Fannie and Freddie "as is".
Buffett wants to get a piece of the business and what he is saying is that he will wait until reform happens. Reform by which Fannie and Freddie will become something else or nothing at all. I am not seeing any green light on Buffett's comments.
Correct, 44. He has his own big-ego-leftist stake in play too.
Beta, it's all my personal opinion. But if there is some general consensus that C-W/J-C's bills or even Maxine Waters' will hand down Fannie and Freddie's business to big banks whether it is securitization/fees, etc. by winding them down, then I can only imagine how much of that will go to JPM, Wells Fargo, Bank of America, CitiBank and the like. Feel free to disagree anybody.
All these people -from the Administration to Congress- have sold their souls to the devil banks. That's why banks have kept quiet while housing reform bills keep coming up. Banks are the silent protagonists which politicians refer to as "private capital". I would not be surprised to one day hear a conspiracy theory by which Banks have agreed to be sued by the government -costing them big bucks- only to receive the entire mortgage business after reform.
Welcome back...
to your refreshing posts, 44c.
Guttentag on GSEs reform
http://www.dailyherald.com/article/20140412/entlife/140419791/
Is it going to be just the usual, average procedural stuff or something meatier perhaps? Worth attending?
He is a real estate guru. I do not think Colony Capital is a typical hedge fund. It focuses on real estate.
But, he invested in Jr. preferred shares as far as I know. Post-conservatorship but early investor. Given his position I am unsure he may be supporting the entire capital structure. So may not be useful. Mine was a quick reply.
Colony Capital
I think John Hempton sold a while back.
Ok. I now see why navy commander put that in a positive light. Thanks.
Why this makes you happy?
This actually protects FHFA/Treasury in case they mistakenly produce documents that should be categorized as privileged information and the agreement will allow those documents to be claimed back.
What is your understanding of a claw-back agreement? It seems to go hand-in-hand with a discovery that is broad.
Thank you, taint.
Understood.
Why are you touting Ackman in these boards? We are discussing preferred shares here of which Ackman owns none.
Why aren't moderators deleting these messages?
I believe this is what he did
http://en.wikipedia.org/wiki/Total_return_swap
Always,
in Perry Vs Lew this argument was demolished by Ted Olson already. We have to wait to see what the court thinks.
Thank you, Obit.
Your #3.
Yes, I was counting on a large excess payment to Treasury which -somehow- I considered normal. Now that I think about it I may have been brainwashed just too much with the "deserved punishment" tune for Fannie and Freddie. Maybe I should broaden my perspective now that I see where you are coming from.
I understand how the 3 branches work. But I also understand that "politics" is the underlying force behind the strict functions of each branch and the system of checks and balances. Sometimes politics gets on the way. As in pissing or not wanting to piss the other branch off. I bet House Republicans love to piss the Administration off whereas Ms. Waters may consider not touching the 10% dividend set by the Treasury in spite of her having all power to make law, increasing it, reversing it or telling the Koch brothers to pay for it. By suggesting a reduction of it in the draft she leaves Lew with half the juice. But all this is simply commentary, sorry.
As for the Capuano bill, I have to go back to my notes. It was introduced when Fannie Mae was just about to pay Treasury approx. 59 billion (June 30, 2013) so I can't remember the amortization schedule or the structure of the repayment. But I believe the 30 year term was way in excess, the full loan would have been $240 to $250 bill including all interests and it would have been repaid within a short number of years with any excess to the 5% being applied automatically as principal payments.
andydub, thank you for sharing these figures and your hard work!
Obit, please excuse my intromission... if you are saying just one large dividend payment for the whole sum both of which being paid at once, I think this will meet great resistance. But perhaps I again misread your carefully thought lines.
I believe now we all seem to be on the same page regarding the "repayment" and I also think this -at a 10% clip- would be usurious. But,
in the recent past,
Capuano worked on a bill that transformed the Srs. payouts into a loan. The structure was very similar to our interpretation of Waters except that -if I remember correctly- Capuano's had a 5% rate. This could be wrong as I am writing off the top of my head. So, not sure.
As for the 10%, trying to reduce it like Capuano attempted will be in direct confrontation with what Treasury decided and did. I am not sure anything can come out of Congress that will be a direct confrontation to another branch of the government. Just my opinion. So nothing more than air.
Obit, I salute your love of facts. As many here, it is a welcome respite from speculation and denial. Yes, Waters' draft appears incomplete, lacking precision or left as such in purpose.
The reason I went further in my imagination is because the key word "Repayment" (for Sr. preferred shares). Not completely clear how to do so or throughout which period. And the "time span" when this is accomplished happens to be critical.
Thank you for taking the time to answer.
Donot, we read it the same. Not sure why Obit disagrees but he responded differently. He sticks to the facts too much, lol. Thanks.
That'll work for me too, letgo.
You nailed it loobe. Absolutely correct. That is the essential takeaway. For us at least. Finally, some fresh air coming from a main politician, for once. I hope this develops into something...
I suspect final numbers could be tight. They may work the numbers so as to avoid a shareholder field day. At first glance there seems to be some discretionary figures sitting above us. How much they may move the needle for or against us we do not know. But, the door is open for Congress to throw us a bone.
I haven't read the details of her discussion draft. Does she say what the composition of the 50b is? Is there a door open for the Jr. payout to be credited as funds transferred to the NewCo a-la-Berkowitz?
In a pr/article, she also said that after Treasury is paid all remaining payouts will follow the law -or something like it-. I believe HERA 08 has a subsection for payouts and there is one paragraph that allows for "court ordered payouts" as in paying claims.
Well... I guess I should read the draft before writing.
If the reserve fund had been associated to just shareholders then point (5) and point (6) would have been subsections of (3). They are not. Waters must be anticipating that the wind-down will incur costs which will be paid prior to any payout to shareholders.
Thank you for posting this. Could not find it.
There is a recognition of shareholders. That is the good (great) news.
But,
it can get crowded before any payouts to Jrs./Common. We don't know the size of the reserve funds that she recommends the Treasury to create. This can be sizable as it relates to the wind-down.
Although it is great news that Jrs. are in line for redemption (#5) and commons in position #6, these last are greatly diluted (they will include exercised warrants). And we can't establish how much money will drip into the waterfall. So no real reason to get excited yet.
Yes, very different approaches. Hopefully, something will stick. Thank you for those links. Always very informative.
Tincupx, that is a great question.
Since the contention for Fairholme and Perry is the 3rd amendment a negotiated resolution may involve pre/post Aug 17, 2012 purchases. I also suspect that if the 3rd amendment is vacated by the judge, this ruling will affect the entire class of equity regardless of when purchases happened. So the judge could potentially make everyone whole whereas a negotiated agreement might not.
But as 44c always says, I am not a lawyer so this is a layman's opinion and is worth no more no less than anyone else's opinion.