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When is the deadline for buying shares that still benefit from the Lamberth ruling?
I am truly sorry. Anyone who bought commons at $2 to 3$ (or JPS at $6 to $9) a few years ago is also sitting on significant losses, but those poor buyers from 2007 were downright robbed and plundered - out of unscrupulous greed.
Unfortunately, Sandra has lost her sense of security. She is no longer FDIC-insured.
As FHFA director, she compensates for the lack of private sector security by relying on permanent conservatorship. The government never goes broke. No insurance or security needed. She can spend whatever she wants as long as it's for the public the FHFA serves.
I think most of what Tim Howard writes is good and sound, and I can follow his arguments. But he is a bit optimistic. I don't think the government will ever admit its own mistakes, as Howard still hopes.
I think your arguments and criticisms are valid. That's why I'm invested in (low risk) JPS and not in (high risk) commons.
Still, I think it's helpful to present and discuss Howard's arguments here. The discussion may help to clarify whether they are realistic or not.
Glad to read something reasonable from you (the sentences underlined by me).
Tim Howard is in the same boat, and he's not a pref boy.
For a lawsuit to be filed, he would not only have to have stated a price target of 0.1 cents, but also a deadline by which this target should be reached. Without a deadline, he is innocent
That's right, but only in theory. In practice, you're dealing with cutthroats who have robbed you and then use every legal trick in the book to hide the evidence.
You'd better email the shit emojis 💩 to Biden's press office.
I am happy with any award I am honored to receive.
WTS is usually the World Toilet Summit:
https://worldtoilet.org/world-toilet-summit-project/
But Donotunderstand uses WTS as an abbreviation for warrants. He doesn't understand the double meaning ("commons down the drain").
Carlos, how do you actually manage to fight windmills when you have to go to the outhouse three times an hour?
To be "awarded" a shit emoji 💩, all you have to do here is write that a capital raise is necessary and will take place.
The December 2020 CBO paper left no doubt about that (all three scenarios presented).
But no one here cares, because it doesn't fit well with the $250 "go commons go!" utopia.
1. The "bankruptcy protection" argument is a quote from Louie_Louie's post. I just commented that it doesn't make sense.
2. Moreover, the (false) argument came up when FnF were put in conservatorship. So the (false) argument is 15 years old. Judging it from today's perspective (more than $100 B in cash) is misleading at best.
That's why his real "real name" is Carlos Sancho Pansa
Carlos fights against the general evil. In his mind, this is a single person (Lucifer? 👹) - because everyone who posts here is supposed to be the multiple ID of one and the same person.
He is like a knight on a crusade who wants to bring Lucifer 👹to his knees.
The only unholy thing about his mission ✝️ is the continuous dropping of shit 💩 emojis.
Hi FOFreddie. Interesting thoughts. I think it could go like this: In the IPO or secondary offering, there will be some large buyers (e.g., Middle Eastern sovereign wealth funds) who will acquire large blocks of shares. This is because there will most likely be a discount of 10% to 20% to fair value. Later, these large buyers will sell some of their shares at a profit.
So index funds and ETF buyers (SPY) are likely to buy the new FNM and FMC shares from the sheiks and other large SPO buyers (Goldman?) who bought the shares cheaply at a premium.
No president, neither Biden nor Trump, would run the risk of a failed FnF IPO (SPO) for just $25 billion more (that's what an SPS conversion adds to the government's gain from R/R as compared to the "warrant exercise only" scenario).
Thank you FOFreddie. I would like to illustrate the "benefit for all" argument with some numbers.
The numbers are based on the following paragraph from Howard's latest article:
There is no contradiction. The SPS could be deleted or canceled because they are deemed repaid.
Tim Howard: "...If this or a future administration turns around on the way it treats Fannie and Freddie, even given the history of the past fifteen years, a P/E relative to the S&P 500 of 50 percent would seem to be attainable, and one higher than that would not be out of the question. A relative P/E of 40 percent would put the market value of Fannie and Freddie at around $250 billion, which would be split among Treasury, existing shareholders, and whatever new investors are needed to help the companies meet their new, more reasonable, capital requirements (with Treasury’s percentage being inversely related to the amount of new equity issued) *❗️
Fannie and Freddie’s $25 billion in annual earnings, high-quality books of business, and results of their last three years of Dodd-Frank stress tests highlight the fact that there is no reason for them to have been kept in conservatorship for 15 years, and certainly none to keep them there for another 15 years. The net worth sweep and the unreasonable capital requirements of the ERCF prevent the companies from getting out on their own. But here, the August 14 (jury) verdict against FHFA in the Berkley Insurance case involving the sweep and the pointed criticisms of the ERCF in response to FHFA’s request for input on Fannie and Freddie’s capital and pricing give the current administration, or a future one, legitimate reasons to question both. Whichever one does will discover that there is an easy way out of the conservatorships that is a win for all parties—the administration taking the action, its Treasury, the mortgage finance system, homebuyers, and the new and existing investors that supply the private capital Fannie and Freddie need to carry out their missions."
https://howardonmortgagefinance.com/2023/09/11/an-easy-way-out/comment-page-1/#comment-30401
(Emphasis added by me)
-------------------------------------------
*❗️: The important point here: The lower the capital requirements (ERCF) are set, the less the dilution of the legacy shareholders in the capital raise, and the more the government "earns" from recap/release, because a smaller percentage of the final market capitalization goes to outside investors (the subscribers to the new shares). So lowering the capital requirements is a win-win that benefits both the government and the legacy shareholders.
Calabria's excessive capital requirements have therefore harmed both the government and the shareholders. Presumably, their main purpose was to delay recap/release for as long as possible. The main beneficiaries of this strategy were the TBTF banks, which could gain market share.
I also think the rally in the commons is positive, and I would be very happy if it was due to a release where the SPS were cancelled and only the warrants were exercised. Because in that case the JPS would certainly reach par value. Unfortunately, I think the probability of this happening is low.
In any case, it is a common misconception here that JPS holders would be interested in seeing the commons heavily diluted and underperforming. Hope this wouldn't happen is no investment strategy, though.
I have observed that any rally in the commons that didn't coincide with a rise in the JPS was doomed to fail. At least so far.
A good omen?
Exchange-traded funds that invest in stocks linked to home builders soared this week, blowing past the strong performance of the Dow Jones Industrial Average and S&P 500 index.
Shares of the iShares U.S. Home Construction ETF ITB have jumped more than 13% so far this week, putting the fund on track for its best weekly performance since May 2020, according to FactSet data, at last check. The SPDR S&P Homebuilders ETF XHB has climbed 11% this week based on Friday afternoon trading...
https://www.marketwatch.com/story/home-builder-etfs-surge-this-week-exceeding-the-dows-big-gains-7cee8481
In wouldn't dare buy the commons. There's a lot of downside risk with little upside chance, IMHO. Call me a conservative investor.
If you buy at 75 cents and it goes down to a nickel, you still lose 87%. I'm not buying into double- or triple-digit pipe dreams.
In that case, the government wouldn't make any money. And they would lose their piggy bank. So there's a double lack of incentive.
crappy millenium, so far.
Aren't they nothingburgers?