Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
kthomp19,
Getting into the nitty gritty.....
Will the fees paid to the attorneys be on the ENTIRE amount of the damages?
What I am getting at is, does the fees paid to the attorneys also include the Interest on the damage calculation, or is it just on the damage figure itself?
Also, what catalysts could be coming up (& when) aside from the probability of Trump winning the '24 Election and the record date of the damages determined by Judge Lamberth that could cause upward momentum in the JPS &/or Commons?
TIA
kthomp19,
Do these damage calculations include the amounts to be paid to the attorneys? If not, how much of these damage calculations will be subtracted?
Do you think there is a (high) likelihood of appeal? Plaintiffs? Defendants? Who is leading the charge?
What is the chance Biden does (or announces) something meaningful during the SOTU? What could he possibly announce that would be positive to shareholders? TIA
James Lockhart states that it is time for the GSEs to exit Conservatorship. Would like to know your thoughts on Lockhart's comment that the GSEs should create "new" subsidiaries capitalized by the parent GSEs and then go public though these subsidiaries "to get them out of Government control." Can this be done? Can it EASILY be done? Is this a specific bulls-eye to screw legacy JPS & Commons by keeping these securities at the 'parent level'? Guess Congress can 'do anything' if they want, but is this a non-starter/possible/highly probable? TIA
Kthomp19,
Is there ANY 'reasonable' chance that on an appeal that there COULD be some form of 'injunctive relief?'
Do you think the Defendants will appeal, or will they kiss their lucky stars that Lamberth severely restricted the amount and type of damages for a 'Bad Faith & Fair Dealing' lawsuit and pay whatever the jury awarded?
What is currently making the Rounds in Washington is the possibility of Biden/FHFA/Treasury 'ordering'/setting up for F&F to purchase mortgages/mortgage securities off-balance sheet like they did in the '90s and 2000s up until Conservatorship. Presumably to lower mortgage rates. CAN Biden accomplish this without F&F (formally?) exiting Conservatorship?
You also stated that given the Mnuchin negotiations you are no longer expecting 'par' for F&F's JPS. How low do we go IYO?
TIA
kthomp19,
Great rebuttals!
What do you believe the JPS are (ultimately) going to be worth? Par? Less than par? Fannie? Freddie? Different value depending on which GSE? Another way of asking this, is do you believe Fannie or Freddie JPS may turn out to be more (or less) valuable than the other?
Pagliara's comment #6 intrigues me: "6. Election year politics - most think this is a “Trump” trade. I disagree. Biden is a seasoned politician surrounded by skilled strategists. Polling suggests housing affordability is a key campaign issue."
Over-seasoned maybe, but "surrounded by skilled strategists"!?
Okay
Do you agree? Do you also agree with Pagliara that F&F is NOT a "Trump Trade"?
Now it is disclosed that ST visited Pagliara's (CapWealth) HQ for a sit down and presumably an explanation on how to monetized the warrants/restructure via the 'Franklin Plan.' What is the 'Franklin Plan'? Tenets? Now it makes sense on why Pagliara is kissing some Admin butt.
Do you believe Biden/Treasury/FHA is (currently) performing meaningful work on restructuring F&F, releasing F&F, or perhaps working on closing down these avenues for Trump? At this point, can Biden get anything meaningful done b4 the Election?
TIA, SREZ
Thank You.
Does that mean for #7 that the JPS Dividends would be 'turned back on'?
What are the chances in appeals that shareholders get the raw end of the stick (again) and are awarded de minimis or even bumpka, $0?
2025 w/one appeal?!? 2027?! Really?!? Wow. of course, post-judgement interest would be applied, correct?
Where did you get $811M? Is that the total award ($612M) + Fannie getting simple interest since 2012?
2025 potential for Fannie, 2028 for Freddie....Would you say Fannie is the clear company to hold JPS in (since investors can't purchase the Seniors/SPS) versus Freddie?
Do you think Trump will be elected in '24?
TIA
Complete shot off the wall b/c I respect how you look at things --- gold just hit a new all-time high in dollar terms. Do you have any thoughts on the price of gold and where it could head (range) in the near/intermediate term? Why?
kthomp19,
Thanks for your answers!
Regarding expenses, what will they be? Estimate? Is there a chance legal fees might be paid by the USG/FHFA/F&F?
I believe JPS holders made a contingency deal where Hamish & Co will take 20? 25? 30%? Any way those expenses are paid/partly paid directly by the Defendants?
Assuming the contingency % is 'high' & must be paid by defendants, can these fees be negotiated downward? Do these (now) substantial contingency fees make it likely (or less likely, or no effect) that Hamish & Co would NOT want to appeal on behalf of Plaintiffs?
Who negotiated the contingency %?
Will this judgement be appealed by Defendants?
How long will it take b4 any $$$ is made available/payable to shareholders?
Does this judgement help, hurt, or have no effect on F&F exiting Conservatorship?
Are we reliant more than ever on Trump becoming President b4 any meaningful change in F&F's status (i.e. exit from Conservatorship)?
TIA
kthomp19,
Can you address Post Judgement Interest and 'named Plaintiffs'?
#1 - When does Post-Judgement Interest come into play. When does it start? When does it end?
#2 - Is it possible the 'named plaintiffs' who filed the suit get a bigger cut of the damage award vs. other JPS holders? Are all JPS holders treated equally (ignoring the Pre-Judgement interest Fannie holders might get vs. Freddie holders)? After expenses?
TIA
kthomp19,
You (& others) have used the term "settlement." What could theoretically (or realistically) occur in this regard? Would it be settling for LESS than what the damage figures are? More? Less interest Fannie Mae JPS' are entitle to? More? PJI applied to Freddie Mac's JPS?
In essence, what would both parties be 'settling', unless you believe it is more of an agreement/meeting of the minds on what has already occurred?
TIA
Kthomp19,
Like the way you think....
If Mnuchin (as he cites) was against a write-down (or write-off) of the SPS due to potential legal &/or political fallout issues, what IYO WILL Ultimately happen with the SPS + the large (& growing) value of the Liquidation Preference (LP)? Vis-a-vis the JPS?
Mnuchin didn't want the JPS to be structurally Senior to the SPS which would iccur withthe write-off or conversion to Equity/Commons, so will the SPS + LP be written down on a pari-passu basis with the JPS (which I believe Mnuchin was proposing)? Keep the SPS, but write-down the LP? How do the JPS obtain 50, 60, 70-90% of par in such a scenario?
TIA, SREZ
Do you believe that the SPS LP and JPS will be written down by the same % ala Mnuchin's plan? Then converted into 'new equity'?
If so, won't JOS holders demand protections to make sure this 'new equity' isn't diluted to oblivion?
TIA
Another question is AT THIS STAGE, what do you believe will happen with the JPS & what will their recovery be?
TIA 2x
Kthomp19,
What kind of haircut do you envision JPS holders taking? You make it seem as if it would be the same % as the write-down in the LP. What % do u forecast?
It has been rumored/reported that Mnuchin offered 30% FV to the JPS holders, & JPS holders said, "Nein." IF Trump gets back in do u think Trump would be dumb enough to re-instate Calabria as FHFA Director? Who would Trump's FHFA pick be? Treasury Secretary?
TIA, SREZ
Follow up as to WHY Capital Group/PRIMECAP/Fairholme have been meaningfully exiting JPS (primarily the liquids FNMAS/FMCKJ) over the last quarter. Could it be:
(1) redeploy capital potentially into a better investment/idea;
(2) admit an investing mistake;
(3) Insider info (especially Capital Group) on Negative news from the USG/Treasury/FHFA;
(4) new portfolio management with a new perspective on a Losing legacy holding;
(5) tax reasons (i.e. gains elsewhere to offset losses 'created');
(6) to pay off some party for some future action (whether $$$, or politically)/minimize 'headline risk';
(7) or it is perceived as a truly dead-money investment that is currently priced more than what it is ultimately worth?
Again, Why seemingly NOW and AT these extremely LOW valuations?
TIA!
Kthomp19,
Trying to get my head wrapped around this......
WHY, oh WHY is a long value shop like Capital Group meaningfully exiting their liquid JPS -- FNMAS & FMCKJ? WHY is PRIMECAP doing the same? WHY has Fairholme followed in the footsteps of these two, or is it vice-versa? Why NOW?
These are players that have been around a long time. Is it that there will be no capital raise for F&F, yet some mythical g-fee markup used to help 'balance the budget' and potentially allow the Treasury/USG sell shares into the open market with a consent decree?
Won't there be major blowback by the Republican Congress?
Do you see any meaningful light at the end of the tunnel for Biden's Team to act on F&F b4 losing the '24 Election? Why is Larry Fink so critical to the fate of F&F, especially their potential exit from Conservatorship?
Answer any or all! Lover ur thoughts and opinions!
Kthomp19,
We need some unsolicited postings from you. Your opinions are valued!
Do u believe SVB's blow-up materially help (i.e Timothy Howard) or hurt the cause of F&F exiting Conservatorship? Sooner rather than later? Are Don Leyton's recent comments valid, or hogwash, like TH has stated?
Is the Financial Establishment about to fail, & if so, how does this affect F&F? Is the USG/Treasury about to once again utilize F&F to bail out the FE?
TIA
KThomp19,
Boy do I agree with you on 98% of everything you have written, but sadly this post is in the 2%. Any functioning market is based on risk, opportunity, patience, as well as a gigantic amount of luck, persistence, analysis, & fortitude. The reward is a potential payoff, with absolutely zero guarantees.
Your post misses by a wide mark, but it did make me pause b/c a LOT of smart people (mostly from the Left, but not exclusively) seemingly think in this manner. Personally, this has the potential to End the Great American Experience/Republic, but hey, Rome fell too.
First, it is not based in Law, though the Law seems to change daily, and you correctly point out yours is a moral argument.
If a Spanish-owned galleon filled with Treasure mined on the backs of indigenous Indians in Colombia, visits Cuba, yet sinks off of Florida, who does the Treasure belong to? Spain, Colombia, Cuba, Florida? A Fund for Current Indigenous People since those directly affected (oppressed miners) are long since deceased? Should the Hemisphere receive the Collective lions share even though the $$$ will likely end up in some corrupt group/bureaucrat(s) pocket? Does the Treasure belong to the world and thus should be distributed to everyone living and breathing equally -- Putin and XI included?
Bottom line, any owner(s) who sold their shares, probably primarily for tax reasons, and had every opportunity to 'buy back', legally OR morally, has no claim. Being facetious, but supposed those investors took their $$$ and bought the FANNGS and made millions? Let's also say some got depressed and spent their $$$ on booze and drugs?
NO WAY to be able to cost effectively determine these, or any, outcomes. Only the Sale from the Seller. Only the Buy from the Buyer?
Just disagree with your thinking on this. Utopian IMHO. It seems to fail on the: Legal, Moral, Common Sense, Cost-Effective Fronts.
Keep the thoughts up! Yours are most intriguing!! TIA
Kthomp19,
What are the specific developments/inhibitions 'preventing' the NWS from 'simply' being turned back on?
There appears to be a 'sweet spot' for the Biden Admin to grab the cash (80% of $150B, 100% of $50B). It appears the '80% method' in essence protects the JPS (with probably a negotiated haircut), while heavily diluting the Commons. The '100% method' appears to put the Commons in absolute no-man's land, but what IYO would happen to the JPS under this method? Am I reading the situation correctly?
TIA
Good Post. Agree.
Good post. Agree.
AceTrader,
That was IN DEPTH reporting?
There were emails/texts introduced today that show internal memorandum between Treasury officials the gist of which said, 'F&F are going to report record rebound earnings, we should therefore not delay on the Net Worth Sweep.'
There was also a LOT of argument about damage models.
Lamberth will rule if these emails/texts will be permitted tomorrow (today).
There were a lot of emails/texts like this that shockingly could be used as 'hearsay' and if can believe this, not admitted.
Bottom line, nothing will come $$$ from FHFA &/or Treasury, so there is no huge pressure to settle except t save the USG embarrassment.
Hopefully, that might be enough.
TAGL
Thank you for sharing your experiences and thoughts.
Am VERY curious at what settlement(s) were presented in your case & why you did not take 'it'?
Also, why do you think settlement talks have been ongoing regarding F&F "until recently?"
What do you believe these talks MAY (i.e. purely speculative) have led to in terms of a 'settlement"?
TIA
kthomp19,
All extremely well said & like the way you think.
At this point, after ROP, and now heading to Lamberth trial, what do you on an updated basis think 'floor' damages could be for the F&F JPS and FMCC Common?
Low to High range would be much appreciated.
Appeal on damages would take a year, correct?
TIA.
Was the unredacted document made public from Lamberth, and if so, did you glean anything meaningful from it?
TIA
kthomp19,
Could you please go over what you think is likely to (ultimately) happen to the JPS of F&F and why? When this will occur, if possible?
Lamberth trial, Angel, Bhatti, Fairholme, 5th Circuit, et al.....
No PhD dissertation necessary, but by all means if the spirit moves you please go at it!
You are by far one of the best informed posters on the issues facing F&F.
Also, if you have an update on any unredacted Lamberth documents, would appreciate.
TIA