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Starting to think even release news wouldn't boostPPS. With all the various proposals out there, and endless manipulation and PR from the TBTF disguised as news at Bloomberg and WSJ, I wonder if, even an announcement that a resolution has been finally decided on would even boost share prices as much as we've all been hoping all this time. I could see there being left over maybe too many unanswered questions, particularly if the lawsuits aren't settled when the GSEs are released, for institutional $ to really jump in as much as we might otherwise expect. Other unanswered questions include G-fee level, the question of there being possibly open ended competition via open CSP access threatening the GSEs' traditional "moat", the constitutionality of the FHFA's structure in question, 2018&2020 political risk and unknowns, Fed's gradual interest rate hikes seemingly forecast over the next couple of years making mortgages more expensive, and more questions I could think of. I'm starting to wonder if all of that plus the multiple layers of dilution to the common shares proposed by Moelis via two offerings, preferred being converted, and warrants being exercised and sold by gvt would add up to only a relatively minor pop in PPS, to maybe just a bit over where it was before the Appeals court decision came down. So say $5 or even $6 after a release announcement. That seems great from $2.60ish if you recently got into this. But for many of us who've been here for years...it might be a bit underwhelming to say the least.
Extremely interesting! Wish I'd noticed the contradiction. If you have a minute, could you please remind us what stage this specific lawsuit is in?
And did Lamberth and the appeals judges have any such stated-under-oath contradiction to consider? I don't recall that they did.
Any chance the plaintiffs who were shot down by appeals court will take this new piece of data to the Supreme Court?
My congratulations! Wonderful news! I'm about an hour south of your new granddaughter and i'm glad she's also got perfect weather right now.
Apply overpayment to recap. No dilution needed. $9/share? Who here's happy with that?
The result is gvt keeps its blood money, preferred are ok, and common get screwed.
Dilution would be the same. Capital is part of what is "connected to" shareholder equity. Increase the number of shares to increase capital, and you cause exactly that much dilution, which is the same amount of dilution you'd get if you diluted by raising $ for an acquisition, for example. Maybe what you are thinking about is the difference in expectations. That's hard to quantify. But I can see that there would be different expectations associated with an acquisition versus recapitalizing.
He's 100% right. We have tensMillions young people who grew up as radical socialists and don't even know it. I interact with large numbers of young people from teens to 20s regularly as part of work, and I can tell you their values are not consistent with the values of a free people. They are "gimme gimme gimme" people, afraid of having to think too hard or work too hard. They blame anyone and everyone else for their problems. They are easily indoctrinated. They don't respect or know anything about this nation's history. They think every single thing has something to do with race and are thisclose to yelling at you about race, no matter what the issue really is. They are deceitful too, with no ethics. They steal from their friends and lie about it. They have no idea how to work or concentrate on anything. They abhor struggling in any way. And they vote, and the below 18 ones will vote soon. Are we to think that people like that will ever vote to shrink the gvt? To increase freedom? We are in for decades of continuing "transformation" of this country into something frightening.
Yes! If big players all agree, they can just sidestep the law and do whatever they want, apparently. Courts aren't stopping any of it. Imagine, in a world where the law was followed and enforced, someone with just 1 share of FNMA should be able to rely on the law for his investment thesis! But the gvt simply refuses to obey its own laws, or enforce them, because picking and choosing at its whim which laws it enforces and which it doesn't enforce gives the gvt ENORMOUS power, the power of a dictatorship actually.
Wise people understand: a government like ours, totally saturated by corruption, WANTS laws to be broken, because then it can squeeze, use, siphon, coerce, and make corrupt deals with the offender in exchange for giving the offender easy treatment by the law. The gvt has leverage over offenders in a corrupt system that soon takes things outside of the law in the next steps, as the "enforcement" process (rather, The absence of enforcement) unfolds.
Commons diluted by warrants and 2 offerings. $9-10by2021? Moelis blueprint does seem more level headed than MBA's. But Who here would take that?
Warrants dilute commons 5x. Then two more offerings continue the dilution. And future dividends will thus be diluted along with that.
Who likes this? Who doesn't? Is it me or does it seem like there is zero chance that warrants won't be exercised in any scenario that doesn't also wipe out commons?
And doesn't it seem like court-wise and politically there is no avenue by which the 3rd amendment will be vacated, commons would be able to elect a new board, or the original 2008 deal will be vacated?
Moelis's plan seems kinda similar to Ackman's proposal. But Ackman didn't have two additional dilutions (Moelis's IPO then secondary offerings in consecutive years) after exercising the warrants did he? Why would Ackman go for three levels of dilution? His cost basis is in the low $2s. He'd still be getting a 5 bagger even with this dilution but...his own plan didn't include an IPO plus a secondary offering did it?
If this Moelis plan can be done as quickly as they say, and it does get done, no court case except maybe Delaware will be near completion. How will a judge who rules in favor of plaintiffs implement any relief to today's common and preferred holders after so many levels of dilution happen?
So true. Where's 60 minutes? FoxBiz? CNBC? NYtimes? Oh...right.
Link please?
Bloomberg Scrolling Paulson/Blackstone backs release/recap. News seems not to be moving the pps. Maybe everyone already saw this. I just did.
Why only 3500 documents released? Is that all Sweeney required?
This country's beyond Banana Republic status.
Sweeney basically conjured a delay for the defense! Out of thin air. Caused unknown weeks/months of delay in the case and it wasn't even requested by plaintiffs.
Sweeney: being thorough, or aiding and abetting in the gvt's delay strategy?
This "unforced error" of a delay, plus the fact that she let the DEFENSE choose which documents to release to the PLAINTIFFS together add up to my conclusion being that she is aiding and abetting the government in its efforts to delay this case to death, and delay it specifically to beyond the Jan2018 zero capital date.
Pps was approx $0.30 when NWS initiated. Aug2012.
Bingo. Don't forget Justice Roberts, who caved on Bocare, probably (rumor is) to immense political pressure and threats.
Then plaintiffs appeal doc selection=another year's delay. sweeney would slow-walk that issue tl death, too. Which docs were produced? Which docs that were not produced do plaintiffs want to see? Let's have a hearing for that in 3 months. Oh, defense wants a delay at the last minute? Ok. Another 2 months. Now here we are finally, and what are we addressing again? Oh, docs. Yes. Ok we see which ones plaintiffs want released. Let's reconvene in 4 months to discuss why plaintiff wants those specific docs released. And then defense's response to that discussion will be due 5 months after that. Then Sweeney will retire and a new judge will start the entire case from scratch.
If gvt replaces GSEs w/utility, likely name would be "Fannie Mae." That's my opinion only. Just...wouldn't it be the perfect way to keep the masses, who don't know much about the GSEs anyway, confused? Imagine the gvt decides to eliminate the GSEs and replace them with this Paulson-desired utility. I am betting they would name that utility "Fannie Mae". Because a) Fannie Mae is NOT the official corporate name of the company we are all invested in, FNMA, but it IS what everyone THINKS FNMA is named. By naming the utility Fannie Mae officially, they'd be able to make it seem like nothing happened at all, and things are normal.
The Origins and Rise of Political Correctness.
Codevilla
An excellent 2016 piece by one of the best political writers alive today, Angelo Codevilla, about
the Rise of Political Correctness:
http://www.independent.org/issues/article.asp?id=8932
And an excellent piece by another writer from 2000
The Origins of Political Correctness:
https://www.academia.org/the-origins-of-political-correctness/
Question: could 1/1/2018 zero capital trigger receivership? Or not?
Politicized hacks as judges. Weaponized against the constitution.
How did it go, generally? Thanks for posting! I'll not get to check it out until later.
Thanks for the reminder. It seems like a very very simple case. Is it really gonna have a jury, then?
After listening to the plaintiffs' super high powered lawyers try (pathetically) to argue the accounting points to idiot judges ginsberg, millet (that was the name wasn't it?), who equally pathetically couldn't grasp them, i unfortunately now have zero confidence that any lawyer can explain even this simple problem with paying 100% dividends to a single class and Zero to another that is at the center of the DE case.
But the DE case is just so...plain...obvious. What will go wrong? Will some scotus judge start spouting off and demand the case be stopped and sent directly to scotus? Will something weird like that happen? Will some Fed appeals judge say DE is not the "controlling legal authority" or something?
Jury trial? Not sure how I feel about that. Defense attorney will gin up / exaggerate the whole "GSEs caused the crisis" story and tug at the regular people's emotions. Not entirely a safe situation for plaintiffs.
That's diluted, yes, if I recall correctly. See Ackman's many slides long power point on his GSE investments from 2014 I think it was.
Never thought of that! Very interesting. But I can see DC being able to bamboozle the public / disguise the bailout as being "not a bailout". I mean that, by various means such as lack of media coverage, a draw/bailout would go largely not noticed by mass public. So that would give the Trump admin a sense that it could get away with it if that's what it wanted.
NWS Funding obamacare's been discussed here for years.
Securities fraud, yes. Back to old point: why let the shares continue to trade?
The answer to that question all but proves this is indeed a case of securities fraud, among other things.
Suing under RICO seems most appropriate.
And what lawsuits challenge that point?
Take it one step further. The arrogance of government also includes the original creation of the GSEs. Though we all seem to be fine with what their purpose is and what they do, there are arguments to be made and some positive (but positive to different parties) results that would probably exist in a world without GSEs too. And no I'm not "soft bashing". I'm long and have been for years now. But when the gvt originally established Fannie , why did it give Fannie the exclusivity/monopoly it had in the first place? From the get-go there were huge economic distortions built into it all. But those distortions were not a concern because affordability of housing increased and people seemed happy. However, we're talking about monthly payment affordability, not "what you ultimately pay in total to own the house free and clear." If we use that latter number, who won when Fannie was established? Who wins when more people can afford a monthly payment for a house and take out loans that will cause them to ultimately pay maybe twice the "price" of the house in interest payments?
I'm not making a judgement because some would say the middle class still wins because they get to be earning equity every month. Others would say the big banks (and MBS investors) win because they collect way more in interest payments.
Ending NWS=pps jump. Exit opportunity if one is long term afraid that DC resolution will somehow screw shareholders.
I agree with that interpretation. And if such a system (future GSEs) existed with that structure, i think that would make sense and be fine.
But my question is: why was Corker not trying to tell Mnuchin to eliminate the GSEs? Why was he almost being civil as he was discussing that supposedly hypothetical situation with Mnuchin?
Did corker actually say that? I heard Mnuchin's Tier2 response. I must have not heard Corker use the phrase "shareholders should be wiped out." Did he really say that?
Buying freeze imposed by whom? Isn't it ok for them to buy as long as they report it?
I mean I get that they could potentially be accused of insider trading, and maybe that's all you're referring to.
Brings up an interesting question. What if an employee at the GSEs simply wants to buy shares because he believes in the company and has no insider knowledge? In this environment, it would be risky to even buy innocently.
Many FannieInsider "formThrees" would be filed if goodnews became known.
Fannie insiders, who work at the company, would be buying shares as soon as they heard any shareholder friendly news wouldn't they? What's the lag time between them buying and the filing of their purchase being reported by the SEC?
Ouch. There ya go. MnuchinAskedForDividendPayments.
Crapo didn't bring up shareholders unfortunately.
Anyone notice Chryssa Halley buying FNMA? SVP Deputy Controller at Fannie Mae.
For whatever it is worth.
If Watt discussed capital buffer with Mnuchin, wouldn't that suggest that Mnuchin is at the very least ok with strengthening the GSEs before Jan '18 comes?
And maybe Mnuchin really does want to leave the question of housing finance reform to congress. But i think his willingness to strengthen the GSEs against their impending zero cap date shows that he is giving the GSEs a chance at surviving into and perhaps even through any congressional legislative reform efforts that might come. And if the notion that congress will still take years to pass reform holds, then the GSEs being better capitalized through that process has to give them at least a slightly better chance of surviving legislative reform. But then, the TBTF-owned congress will do whatever it wants. The Only check to that is possibly executive and judicial branches.
Watt might wan to permit it once reform via congress takes shape.