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This whole saga is just mind blowing! Money and human behavior is soooo predictable.... Shame on Mario, was he only temporarily employed in a high level gubmint position or was he a lifer and now "retired"? One of the posters told me he lived in Gainesville VA, a new fast growing upper middle income community with pretty good schools and nice amenities and lifestyles...
Apparently Mario was pulling down about $234,000/year in salary (ironically paid for from your jps and common shares via funding of the FHFA by the twins!), I'm sure he's no worse off! Too bad all the shareholders have been creamed! I'm sure he could care less! His boss Lockhart and of course Bush 1 and 2 always disliked FDR's creation (so too apparently did BO!). Where's the love? HeeeHeee! I think the twins (and bankers generally?) are hated equally by both parties....
That's right, but for the jps holders litigation efforts we may not have gotten even this far! When the federal government wants to do something they typically act first and we can see that only after $100 million plus in litigation expense and years at the different courthouses are WE THE PEOPLE EVEN ABLE TO FIND OUT WHAT OZ IS DOING BEHIND THE CURTAIN.
I haven't really kept up with Lamberth's court cases, I still remember the disappointment of reading his opinion (he is a highly respected Judge) that basically said there is no relief available for shareholders, go write a letter to your congressman\woman....
But from what I understood from Tim P. yesterday:
(1). The case is still alive on at least 1 legal theory (breach of the covenant of good faith in contract law).
(2). Lamberth is not pleased that Mario Uglio deceived a high ranking and prominent federal Judge by stating in a sworn affidavit that the purpose of the nws was to avoid the death spiral and not "salt the earth with the carcasses of the gses".
We'll see what happens, stay tuned...
Well from what I gleaned from todays video chat, he says Lambert is getting ready to decide next Spring, whether or not the government violated their implied covenant of good faith dealing that is implicit in all legal contracts, when the Government failed to disclose material information to the prospective buyers of jps in 08 that bought $33B of jps, the government pays 1 dividend payment and defaults. Paulson as head of UST had material information that it was the Government's intent to take over the gses and while Paulson disclosed that information to some he did not disclose it to the innocent jps buyers who paid close to par for an investment that was getting ready to halt their dividend payment.
Lambert is a little upset that the government hasn't been exactly straightforward with the court and I'm sure he'd like to have a little chat with Mario.
Where's Mario?
I think he went way overboard on the cap rule, BUT it gets the message out to lawmakers and others that want free money from the gses' (e.g., payroll tax cut, housing trust funds, skipping rent and mortgage payments for as long as they want, etc) that after the Government has taken $308B of their profits there's nothing left to take!
“Asset prices may be vulnerable to significant declines should risk appetite fall,” the central bank said.
https://www.cnbc.com/2021/05/06/fed-warns-of-possible-significant-declines-in-stocks-as-valuations-climb.html
If I could just find a stock that earns $4 EPS/QTR for like $2, but that would never happen right?
I think it's a great move by MC and the twins and appears to be a win/win, helping reduce a major American monthly family expense for borrowers who may have been passed by from 50 year low Mortgage Rates while at the same time reducing the credit risk of the gses book of biz, what do you think?
Me too! ALWAYS enjoy Tim P.'s and Gaby's perspectives! It is a complicated investment (which I find intellectually stimulating, Law, Economics, Housing, Politics, sprinkled with the predictable human behavior of abuses of power inherent in unaccountable Governmental Power) and I think they hit the nail on the head, YOU CAN GET IN ON THIS (EITHER COMMON OR PREFERRED) AT VERY LOW PRICES VERSUS WHAT THEY HAVE BEEN TRADING FOR AND WE ALL KNOW THE MAJOR UPCOMING CATALYSTS!
THANKS NAVY, FOR THE LINK!
"Landlords said the decision validated their arguments that the legal basis for the federal moratorium was unsound and overstepped the government's power."
From todays NYT, does the nursing home have the large print edition?
The big three and others were too reliant on just in time delivery from their vendors and refused to hold a 3 or 6 month supply of chips. They will going forward! Someone told me copper was so plentiful in the UP in MI, they use to scoop it off the ground, but that's all gone now!
But the Government is not above the law nor more importantly the US Constitution. You should read it sometime!
The Government is at it again, steamrolling private property owners rights, this is from the NYT, today: ""Sadly, this action won't help get more vaccines available to the world," Dr. Luciana Borio, who oversaw public health preparedness for the National Security Council under Mr. Trump and was the acting chief scientist at the Food and Drug Administration under President Barack Obama, wrote on Twitter, suggesting that the United States donate vaccine doses instead. "There is no reason to celebrate. We wouldn't have our amazing vaccines without U.S. innovative companies. These vaccines are hard to develop and manufacture, and our companies do that most efficiently."
Craig Garthwaite, a professor of strategy at the Kellogg School of Management at Northwestern University, said he worried that the move would "signal that we, at a certain point, will not respect I.P. if the global health need becomes big enough," using the initials for intellectual property. "I worry about Covid-20," he added.
Mr. Garthwaite also noted that, unlike many drugs, the coronavirus vaccines are complex technologies that will be difficult to copy without the help of the companies that developed them. "People think you're going to pick up this patent and read it like a cheesecake recipe, and make this awesome cheesecake," he said. "You really want Moderna and Pfizer helping you.""
Insurance companies tend to use building cost estimates from companies like means, https://www.rsmeans.com/rsmeans-city-cost-index
You can see the increase in replacement costs there.
Looks like copper is starting to make a run up in prices lately as well as lumber hitting daily highs, https://www.cnbc.com/2021/05/06/copper-is-the-new-oil-and-could-hit-20000-per-ton-analysts-say.html
https://www.bloomberg.com/news/articles/2021-05-05/lumber-futures-extend-record-rally-to-top-1-500-for-first-time
NIMBY zoning across the nation continues to limit the supply of buildable lots.
PRICES FOR HOUSING WILL INCREASE SHORT TERM and builders will respond by increasing supply!
Bodes well for higher Purchase mortgage loan balances for the gses.
Texas and Florida have NO state income tax but a high sales tax when you buy stuff.
Who's Third Avenue Management LLC, looks like they added 5.8 million shares?
https://thirdave.com/
"At Third Avenue, we focus on our highest-conviction ideas that typically sit outside of common benchmarks, an approach that leads to high Active Share1 across our portfolios."
"Rooted in our founder Marty Whitman’s time-tested philosophy, Third Avenue’s modern-value approach emphasizes four key investment pillars when evaluating companies and the securities they issue:
Financial strength
Management acumen & alignment
Discounted security prices
Ability to compound value over time"
The "MBS market at risk" argument, isn't there a $2B line of credit at UST pursuant to their original Congressional Charter plus the $50B in accumulated retained earnings on their books? Do you really think the MBS holders will immediately dump MBS knowing that the government guarantee has been IMPLICIT not EXPLICIT since the gses first issued MBS in the 1980's? Couldn't the Federal Reserve increase MBS purchases if that did happen and Yellen for some reason that defies all common sense refuses to increase the gses line of credit at the UST?
Looks like Ole MC has been "WOKE", A WIN FOR HARD WORKING LOWER INCOME AMERICANS AND A REDUCTION IN LOAN DEFAULT FOR THE TWINS!"
JB: "YOU KNOW I CAN FIRE YOU NOW!"
MC: "I'VE BEEN WOKE NOW"
Who really wants to be on the sidelines watching, given the magnitude of a positive ruling from the highest court?
"Of the cases heard in oral arguments and resolved already this term, she has voted 100% of the time with Thomas and Gorsuch."
https://amp.cnn.com/cnn/2021/05/05/politics/barrett-supreme-court-kavanaugh/index.html
But for the "evil hedge fund guys" that Senators like Sherrod Brown and Elizabeth Warren love to eviscerate, these Governmental Shenanigans likely would have never have seen the light of day! The federal government with their unlimited resources has NEVER admitted to their bad acts and has defended the nws all the way to the US Supreme Court. Just as shocking, Steven T Mnuchin an alleged capitalist believed that he had to protect the US "investment" in the gses by continuing to defend the nws even when the evidence clearly shows it was designed to ensure the gses never return to shareholder owned companies and in direct violation of HERA.
Well remember even though they have poked fun at us all these years, if I'm not mistaken the jps have shelled out a majority of the approximately $100 million plus legal fees so far necessary to pry all these smoking gun documents from the overly reluctant government who looks like their bad actor ways can only be stopped by the courts. Also the consensus has been for over a decade that jps was THE way to play this. So the reality of late has hit them hard and fast and it's still not 100% certain who will have the last laugh. I just hope it ain't da gubmint!
https://www.cnbc.com/2021/05/04/covid-vaccine-incentives-make-us-look-bad-doctor-says.html
"Melinda Gates and Bill Gates have no prenuptial agreement." WHAT ARE YOU KIDDING ME! https://nypost.com/2021/05/04/bill-gates-hires-law-firm-founded-by-charles-munger-for-divorce/amp/
Justice Thomas will likely revert back to his reserved silent ways beginning in the October 2021 term. It was a real treat hearing him ask the, "how does one unscramble the egg?" question. I think one time he went 10 years without asking a question. Why? He believes that the attorneys should have the time to advocate their position and sometimes it does sound a little like a Family Feud when the Justices get carried away asking their questions.
https://www.nytimes.com/2021/05/03/us/politics/clarence-thomas-supreme-court.html
You know his numerous jps investors are probably giving him plenty of heat over the recent and rapid inversing of the investment performance that has lasted for over the last 1/8th of a Century between jps and common! I ran a price performance linechart comparing jps price performance over the last 60, 90, and 180 days and CLEARLY common has outperformed. Why do you think that is and don't you think by unloading a large block of common and buying fnmat, fnmas, etc. closing the underperformance gap between jps and common is the right thing to do days prior to a video call on a recommitment to your jps philosophy?
Do you think that as a former Chair of the Federal Reserve and with Jerome on speed dial coupled with a PhD in Economics and a lifetime career at the Federal Reserve that when she comments on the future need to raise interest rates that business people might take what she says to heart? You know how JB is controlled by the women in his life and they will only give him a very short leash....
Did Freddie close higher than Fannie by 7 pennies? Only news I could find is this, https://www.law360.com/articles/1381335/fannie-mae-must-end-non-judicial-foreclosures-1st-circ-told
You KNOW he's taking heat from his investors who have been use to their shares outperforming us for years and years, why not avoid the inevitable questions they may have as to why he has taken a miniscule position in fnma?
Looks like fnmas and fnmat are no longer following the trend of tracking in tandem with fnma since 1:45 pm est....
TP liquidating his remaining common and buying fnmat as a demonstration to his jps friends that he is all in on his conviction and for his upcoming ACG video cast?
That would explain the recent surge in pro jps comments on this and other media platforms.
Is Yellen spooking the market by threatening to take away the punch bowl? https://www.cnbc.com/2021/05/04/treasury-secretary-yellen-says-rates-may-have-to-rise-somewhat-to-keep-economy-from-overheating.html
If purchasing a option for the eventual exit from conservatorship is worth the current share selling price? I guess that's why I just added some more!
The APA Claim for a meaningful remedy for the Collins Plaintiffs is perhaps the easier, cleaner, and more intellectually palatable route to invalidating the nws and putting an end to the almost 8 years of the federal government blatantly nationalizing two large private corporations.
While many Judges and perhaps some of the Justices may not feel comfortable reversing a multi billion dollar "contract" and providing RETROSPECTIVE RELIEF via the unconstitionally insulated Director claim, Seila Law said that the Plaintiffs need not create a but for world:
JUSTICE KAGAN: I mean, in a case like
this, Mr. Thompson, where we're trying to figure
out the proper remedy, I mean, it's -- it's --
it's a -- it's a kind of equitable question,
isn't it, and we're trying to figure out what
position you would have been in absent a
constitutional violation. Why -- why isn't that
the right question?
MR. THOMPSON: Well, I think Footnote
12 of Free Enterprise and Seila Law just last
term rejected that. They said plaintiffs don't
have to try to recreate a but-for world. And,
here, if we -- it shows why. We'd have to go
back to 2009 and see what would have happened if
Director Watt, for example, had been there
throughout the entire time and, you know, would
the President have preferred to keep the money
at Fannie and Freddie and spend it on affordable
housing rather than send it all to the
Republican-controlled House of Representatives
and the Treasury?
So that's a difficult --
JUSTICE KAGAN: Does that mean,
Mr. Thompson, that we have to do a great deal
more than invalidate the -- the -- the Third
Amendment and everything that follows from it?
I mean, why shouldn't we go back to the -- the
-- the -- the -- the First or the Second?
MR. THOMPSON: Well, Your Honor, we
focused on the Third Amendment because that's
the -- the feature of this that rearranged the
capital structure, but, as we made clear to the
Fifth Circuit Court of Appeals, we are perfectly
content with all of these arrangements, which,
as we say in the complaint, were a concrete
life-preserver. It's like getting a credit card
with a double-digit interest rate that you can't
repay the debt on. It's not debt, but you can't
pay the money back, and so --
JUSTICE KAGAN: Thank you,
Mr. Thompson.
MR. THOMPSON: -- we would be
perfectly content with it being thrown out.
As to the Takings argument:
JUSTICE BREYER: The talk -- you --
you said, well, this is really like a
nationalization and the -- the government took
the company, gave it to the Treasury, and our
shares are near worthless.
Well, why didn't you bring a takings
claim?
MR. THOMPSON: Your Honor, we have
brought a takings claim, but that doesn't
absolve this Court of -- under the APA, of
addressing our challenge to the lawfulness of
the agency action. There's no reason to think
that --
JUSTICE BREYER: I didn't say it did.
I was just thinking, if you brought a takings
claim --
MR. THOMPSON: Yes, Your Honor.
JUSTICE BREYER: -- and this seems
like a takings claim, why should we stretch out
of recognition or stretch or try to draw lines
unnecessarily on the question of derivative
actions?
MR. THOMPSON: Well, I think it's
basic --
JUSTICE BREYER: I'm -- I'm aware of
derivative action of the conservator. In fact,
he so -- goes so far that the company's hurt,
really hurt, and the shareholders are destroyed,
bring a takings claim, but as long as there's a
colorable claim, as long as there's a colorable
defense, forget it. Apply ordinary derivative
law.
MR. THOMPSON: Well, Your Honor, two
points. Number one, principles of
constitutional avoidance would counsel in favor
of not reading Congress as having authorized
nationalization. There's no reason to think
Congress would have wanted to stick the
taxpayers with a big tab for a takings verdict
in the Court of Federal Claims.
But also, if the Court were to apply
traditional measures of derivative/direct, we
say we win. We would point to the Alleghany
case.
JUSTICE BREYER: I see that, but you
have a rather special company which your
shareholders brought into -- bought into with
knowledge, and that is a company that has a
public as well as a -- more of a public aspect
than ordinary. They're there and both parts are
relevant.
And so even if this is at the border
of derivative action, shouldn't we interpret the
derivative actions -- why not? -- to encompass
what goes on here with a colorable argument that
they did it for the benefit of the -- of the
corporation?
MR. THOMPSON: Well, again, Your
Honor, constitutional avoidance. We don't think
the Court should depart from its precedent in
Alleghany to create a massive takings liability.
JUSTICE BREYER: All right. If I have
time for one more question, I don't know."