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Hi Chess, I saved your post # 688505 from last July 11, regarding the eight points you derived from the SCOTUS decision that are now apparently going to go before the 5th Circuit next month..Your post sounded well-reasoned and very positive. Are you still of the same persuasion?
Well, more cash will probably be required to secure the release of all the Americans left behind. Settling with the plaintiffs, agreeing to release from conservatorship and including a warrant exercise as part of the deal is a potential way of raising some quick cash.
Clark, can’t agree with you. Especially with the debacle going on in Afghanistan right now, Biden is going to have to pull a magic rabbit out of the hat to show the American people he can still be effective. The GSEs are the nearest rabbit….all prepared, ready and excited to be pulled out of the hat and to do the job for the American people they were designed to do. Pray he has the optics to see that.
ACE, both you and the Man with No Name, post 691218 are onto something, with the Gov’t trying for another crack at getting their hand into the cookie jar once again. Warrants may just be the vehicle they’ll try to use.
The attorneys for Collins surely calculated this when they included in their claim to have the SPS converted to common. Would be interesting to have anyone’s ideas on what they are up to.
Thank you, Kthomp….I just worked out the numbers on Fannie, re $12B earnings divided by 127B shares…..works out to earnings per share of $0.094. With a PE of 15, that’s about $1.41 market value per share of common. Not to far from where we are right now. So, at least we know the worst case scenario, we are in it right now. We are at the bottom of the barrel, looking up. So any better outcome that may turn out can only be an improvement in the outlook.
A good reason to stay positive.
Can you work out some numbers please?
Well, if Uncle is thinking about a conversion, it seems to me that he would need both the existing commons and a market that they trade in to make it work. The current market would help to establish a value, don’t you think? Another word, they need existing common shareholders….and if that is the case, to reap a return they have to carefully manage their investment.
Otherwise, they might as well put both GSEs in receivership and create a couple of new companies….more trouble than it would be worth.
Don’t need BS, just a prospective sharecount. If you don’t know, please let someone else answer.
No, seriously, what might the sharecount be? FNMA now at about 1.1 billion shares. So, anyone, what might the sharecount be after conversion of SPS to common?
If, after a conversion, the sharecount is say, 5 billion, but Fannie is then released, Uncle is going to do all he can do maintain and also increase the value of his holdings. With a historical median S&P price earnings ratio of 15, we could see shares in the mid-thirties at current earnings.
So anyone with a good knowledgeable idea of what a final sharecount might be, let’s hear from you.
Anyone…any idea how badly the existing commons would be diluted if the SPS was converted to common?
Hi DCBill, plaintiffs attorneys, as do all others, wear two hats….one as a litigator and one as a negotiator. The litigation hand has been played hard and the cap is getting frayed, maybe time to try on the other chapeau.
Guido and Mr. Fence, every day deals are cut with swindlers, robbers and murderers in our court systems, through plea deals. Deals at higher levels really no different, in essence. If you did want to sue over warrants, I believe FHFA and Treasury already established a $5 bil reserve for just such a purpose. So if they want to negotiate and arrive at a compromise with the current plaintiffs, and the plaintiffs agree, expect that to be the end of it. Where are any new plaintiffs, OF ANY SUBSTANCE, going to come from?
Guido, after all the disappointing court cases, maybe a decent offer and a reminder that a bird in the hand is better than two in the bush is what will drive a deal. That’s how a lot of compromises are done. At today’s high equity market levels, there’s enough “bird in the hand” to go around for all, if the parties on both sides drop all their pretenses and bargain vigorously but in good faith. 20.1% of something is better than 0% of nothing. Someone has to make a first move and my hunch is that those capable of doing so recognize how ephemeral and fleeting the current moment is. Housing is such an important make-it-or-break-it objective for the Biden Admin. A resolution here improves their prospects for achieving their goals. Tim Howard wouldn’t be mentioning that he was drawing up a release proposal for someone at a high level in the Biden Admin if there wasn’t someone over there cooking up something. I’ve followed Tim’s site for years, he’s not a B.S. type of guy. So let’s all focus on clues as to what’s cooking and see if we can figure out if indeed this is the direction this is all heading.
Louie, I suspect warrants exercise might result from a grand settlement with plaintiffs. Everyone will get a cut.
Louie….if gov’t did exercise the warrants, might not be so bad for current 20.1% shareholders. As an 800 lb gorilla, they would do all they could to max out on the value and push the price of common up. Current shareholders could ride the gov’t’s coattails and still do okay.
With so many thousands of other stocks to invest in, I’m curious why those posting here on IHUB with negative comments on the GSEs bother to do so. Why continue holding onto a money losing trade if you no longer have any conviction in it? It’s easier to click SELL on any e-broker’s site than to type up a message here on this board. As Jesse Livermore said, “if you have to depend on hope in a trade, it’s time to get out of it”. There are still a lot of positives going for a favorable outcome here. If you don’t believe that, please move on. If you do believe, please continue looking for positive news items and post them up here, along with any encouraging thoughts. I find it very encouraging to note Tim Howard’s comment today on his blog that he is preparing a paper outlining his thoughts on a structure for release for a high-level Biden administration official. I believe there is movement behind the scenes on getting housing going and that an out-of-conservatorship Fan & Fred are going to have a big role in that. Still a lot of validity in that old chestnut, that it’s always darkest just before the dawn.
If the gov’t plans to equitize the senior preferred shares, or exercise the warrants, don’t you think they will need the current existing commons to help form a market and help their scheme work?
Welcome!
For those inclined to chart analysis, looking at FNMAS and FNMAT, as representative of all the other preferred issues, the move from the second half of 2019 to these past couple of weeks is a textbook example of a measured move. Most of the year 2020 was spent in building up a big bearish flag, exactly mid-point in the measured move.
For those looking for a future opportunity, we now wait for some back and forth trading to take place. A bottom and a reversal pattern may then develop. If JPS are going to be a part of any future deal or restructuring, the charts may give a strong hint of it ahead of time. A downtrend of this magnitude will take a little time to settle out, and it may take several months or more. With patience, an opportunity may present itself.
Ok, project for the board, need contact info re Collins and Hitchcock for Guido.
30yrFixedfan, you very succinctly made a very good point….SCOTUS very plainly made the case for the plaintiffs to claim Congress (through HERA) authorized the (taking) theft, and for the plaintiffs to use yesterday’s SCOTUS judgement as backing in their takings claim in the Court of Federal Claims. Question….was yesterday an intentional gift by SCOTUS to shareholders?
Lumpina, take a look at the ten-year chart on Fannie…..you can do it right from your quick quotes on your cell phone. You can plot a straight support line under the lows from ten years ago through this week. We are right at support. As long as it holds, this is still very much alive.
With 79.9% riding on the warrants, we are likely now partners with President Biden and crew, and want to encourage them to act on them. We have a mutual interest with them.
Robert, I heard Logic has been deleted from most law school’s curriculums.
Guido, your posts are always terrific. Hope you are privately communicating your thoughts with the plaintiff’s team. They may not like unsolicited advice, but you are someone they should pay attention to.
Looking at the ten year chart on FNMA, today’s decline met support on a trend line under the lows going back ten or so years. So, maybe it’s an opportune time to add more.
For the more legal minds out there.....was just reading about the 1878 SCOTUS case, U.S. vs Throckmorton. Key takeaway was that “fraud vitiates everything”. I’m wondering if this isn’t something the Collins plaintiffs, and others, should be developing as an additional complaint in the current cases vs FHFA/Treasury.....
Anyone pick up on the story on ZeroHedge.com at 1PM today about the Supreme Court....”Unpacked and Undivided. Is the court sending a message with all of its recent 9-0 decisions?”
Exactly
Navy, you are right on the money....all BS excuses.....Philips is one of those shoulda, woulda, coulda kind of guys.
Clark, not fake news....rather an optimistic outlook. We are all mature investors in this stock and we all understand the risks. Not fair for you to attack Navy....he is a welcome addition to this lifeboat we are all on.
Don’t know what your motivation is going after Navy. Long time folks on this board enjoy having him here with us as we endure the tough grind we have faced.
Hi shanon1, looks to me like you were the only one on the board to pick up on the significance of yesterday’s Caniglia vs. Strom Supreme Court decision (and it’s bearing on Fannie & Freddie shareholders and Collins vs. Yellen).
The case was about protecting a citizen’s rights under the 4th amendment, against unreasonable search and seizure without a search warrant.
It was a surprising decision in that it was UNANIMOUSLY, 9-0, decided in favor of the plaintiff and his privacy and property rights. I say surprising, in that a part of the court has had a previous liberal, pro-government bias. Good to see the high court still believes in the Bill of Rights! It was a good slap-down to the defendants, Robert F. Strom, et al, in attempting to deny Mr. Caniglia his rights under both the 2nd and 4th Amendments.
So hopefully this decision carries enough momentum to carry over to the final decision on Collins vs. Yellen. Hopefully, we can see the court provide once more some continuing education to the Federal Government on the meaning of the Bill of Rights and a reminder of the sacredness of private property.
Maybe the buyer is Mnooch....
Hi Robert, Always like your posts, very informative and encouraging. I suggest to all to compose your own “amicus note” to EACH of the Supremes and fill in anything that Mr. Thompson might have missed. Keep it BRIEF, CONCISE AND POLITE!
Here’s where to write:
The Honorable John G. Roberts, Jr., Chief Justice
The Honorable Clarence Thomas, Associate Justice
The Honorable Stephen G. Breyer, Associate Justice
The Honorable Samuel E. Alito, Jr., Associate Justice
The Honorable Sonia Sotomayor, Associate Justice
The Honorable Elena Kagan, Associate Justice
The Honorable Neil M. Gorsuch, Associate Justice
The Honorable Brett M. Kavanaugh, Associate Justice
The Honorable Amy Coney Barrett, Associate Justice
Supreme Court of the United States
1 First Street, NE
Washington DC 20543
In numbers there is strength!
The whole point is to physically handwrite a written note on a postcard, and put a stamp on it, and drop it in a mailbox. VERY OLD SCHOOL......but it works!!!
Not sure what you mean by direct live links.......do you want to throw a rock through their window with a note wrapped around it ?
Re-list!! Weekly postcard campaign!
A timely message, or whatever you would prefer to write: “Save our stock market! Re-list Fannie Mae and Freddie Mac, two BIG success stories, back onto the NYSE. What have you got to lose?”.
Mailing addresses for Trump, Kudlow, Mnuchin and Calabria on post # 594599 (click above).
Trump desperate to get stock market back up!
Weekly postcard campaign, now more than ever! Politicians say nothing catches their eye like a handwritten note from a constituent. It has a LOT of impact. So please help out, we need to let Washington know what we are thinking. Don’t be a griper on this board, be a person that does something.
Details and mailing addresses are on my post #594599 (click above).
A timely message, considering the market this week: “If you want to give the market a big boost, re-list Fannie Mae and Freddie Mac, two success stories, back onto the NYSE”.
Let’s have Trump, Kudlow, Mnuchin and Calabria hear from ALL OF US1
Weekly postcard campaign, now more than ever! Politicians say nothing catches their eye like a handwritten note from a constituent. It has a LOT of impact. So please help out, we need to let Washington know what we are thinking.
Details and mailing addresses are on my post # 594599 (click above).
A timely message, considering the market this week: “If you want to give the stock market a big boost, re-list Fannie Mae and Freddie Mac, two success stories, back onto the NYSE!”
Let’s have Trump, Kudlow, Mnuchin and Calabria hear from all of us!
Weekly postcard campaign! Politicians say nothing catches their eye like a handwritten note from a constituent. It has a lot of impact. So please help out......details and mailing addresses on my post #594599 (click above).
A timely message, considering the market this week: “If you want to give the stock market a big boost, re-list Fannie Mae and Freddie Mac, two success stories, back onto the NYSE!
Let’s have Trump, Kudlow, Mnuchin and Calabria hear from all of us on this.