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Look up the plaintiffs pre-trial statements where they walk through their damage models. The 150% of par would be the restitution model (this model has common shareholders getting zero).
It's possible Jr Pfds get zero in the lamberth trial along with common shareholders, and there are scenarios where common shareholders make more than jr pfd shareholders, but there are zero scenarios in lamberth damage models (you can look them up yourself) or outside of that case where common makes money and jr pfds shareholders get zeroed out. That's the value of being higher ranked in capital structure relative to the common shares. It's also probably why since the supreme court ruling the jr pfd shares are up over 120% while the commons are down 55%.
Good luck to you sir
Anyone in the class action who didnt opt out is at the mercy of the lawyers. If they decide to do a settlement that favors pfds over common there is nothing any of us can do or say about it. If you had an issue with this your deadline to opt out has expired.
There are damage models in the Lamberth case where commons get zero and preferred get 150% of PAR ($37.5 for FNMAS)... + The potential for snr pfd conversion to common in any settlement. Big risks you have to consider
Unlikely. I'm thinking year-end.
Collins 5th circuit en banc had 9 judges (including several Trump appointed judges) rule the NWS violated HERA and should be unwound. Mnuchin/Admin could have used that as cover, instead they choose to appeal it to SCOTUS and the rest is history.
Yes there is currently a motion for summary judgement pending Lamberth that he needs to rule on before the pre-trial conference. Defendants are asking for dismissal of the case in the motion for SJ for various reasons, if granted, would mean no trial.
Run up will begin if and only if we survive motion for SJ which should come within the next ~2 weeks.
Would be travesty to let that precedent stand, that being said i still think its low odds.
Most optimistic about Lamberth (coin flip odds). Have very low expectations for the rest.
Newly argued Collins appropriations claim is very interesting but that is a year away from reaching the 5th circuit en banc again (where the odds of success on that specific claim rises significantly given it was their idea for us to argue that) .
A plan so secret not even FHFA, UST, FNMA, FMCC, or the president know about. Its in the law!!!
There is a jury selection process to weed out anyone with any biases towards either party overseen by Lamberth
Trial is scheduled for 10 days (2 weeks)
Best case they order the NWS to be unwound in its entirety. Low odds imo.
I highly doubt we get a settlement until this or a future admin has plans to release the GSEs and a settlement would be a required step along the way.
if supreme court does not accept the case, does it not mean that scotus says it is ok to nationalize them without just compensation?
does that mean they must take the case and not taking is not an option?
From the governments pretrial statements:
"None of these classes includes holders of Fannie Mae common stock because no one has brought claims on their behalf."
Nothing important. Just the next sealed filing in Lamberth prep for trial. All that matters there is motion for SJ ruling (expected before trial) and trial (in october).
$19b = Fannie
$33b = GSEs combined
GSEs 2022 Stress Tests Released (https://fhfa.gov/AboutUs/Reports/ReportDocuments/Final_2022-Public-Disclosures-FHFA_SA.pdf)
- GSEs combined would EARN $15.6b over 9 Q's in the stress test!
- Key Assumptions:
1) Unemployment increases to 10%
2) GDP -3.5%
3) Home prices -29%
4) Commercial RE -35%
5) Equities -55%
Thats a separate claim that I wasnt discussing. We may still get compensated for that if (BIG IF) SCOTUS agrees to hear our case.
NWS was authorized under the statute, no facts are relevant to this case, thats why trial isnt required to sort out the facts that you are convinced would change SCOTUS's mind. It's irrelevant what the facts show. Statute says NWS is legal. period.
Your analysis is incorrect and I explained why in my previous post. It's not worth discussing further. Good luck
Direct from one of the shareholder petitions today...
"In Collins, this Court upheld the Net Worth Sweep as authorized by the Recovery Act."
There you have it, shareholders admitting that SCOTUS ruled the NWS is legal.Twist it however you want from there.
Furthermore, SCOTUS ruled the removal provision in HERA was unconstitutional. SCOTUS fixed it by making it so the president can now fire the director at will (which Biden immediately did by firing Calabria), as a result the unconstitutional issue within HERA was resolved. That has no effect on the NWS (past or future).
The remand had nothing to do with the NWS being excessive. The remand is specifically to look at the issue of since Trump couldn't fire Mel Watt (which they ruled to be unconstitutional) from day one, where shareholders harmed as a result (sent it back to lower courts to decide this issue). The issue of was NWS legal or excess or however you want to label it has been decided by SCOTUS. Nothing improper there.
Yes it is true. SCOTUS blessed FHFA's authorization for imposing the NWS under the guise of it being in the best interest of the public.
There is no such thing as "buy volume" and "sell volume". All volume is created equal. For every 1 share bought, there is a seller of 1 share, and for every 1 share sold, there is a buyer of 1 share. How can you have someone buy 4,348,458 shares without an equivalent amount being sold? Think about it my amigo.
They have actually been adding to jr pfds most recently using the proceeds they got from selling common…
If it quacks like a duck, smells like a duck, and looks like a duck, its a duck.
This is a MAJOR common dump my friend. Down from $1+ to 40c in 6 months. No excuses.
Also say this is a takings case-why isn’t this a takings case?
You are correct. If scotus declines to hear the takings case, Sweeney's job will be to rubber stamp the appeals court ruling and her job will be done.
Common shares are imploding before our very own eyes. No support in sight just goes down every day. Common has only been positive 2 days this whole month! (+0.6% on 6/17 and +4% on 6/15)
You should read the lamberth opinion more closely, who agreed with the SCOTUS ruling and literally said even if FHFA can act in its own best interest, doesnt mean our contractual rights werent breached and refused to dismiss shareholders contractual claims on that basis (hence we are headed to trial).
By my math genius hedge fund investor Bill Ackman is down >75% on his cost basis from his common shares investment from almost TEN YEARS AGO. Pfds are relatively unchanged during that same time period. Maybe he should hire better advisors!
So you're assuming:
1) government is going to cancel senior pfds,
2) government is going to cancel its warrants, and
3) fannie mae is going to magically get $73b of capital overnight to fill its capital shortfall required to exit conservatorship without an IPO/diluting its current shareholders.
Good luck
They didnt have a live feed, should have access to recording/transcript some time next week