Appreciate the feedback. I haven't given a tremendous consideration to congress now only because of the new admin and Mnuchin's comments.
FYI - just saw an additional post from Tim Howard
"I’ve never said that I am with “fine” with the warrants being exercised. I also don’t dispute any of the misdeeds by Treasury and others that you cite, or that Treasury has done nothing to earn the 79.9 percent of Fannie and Freddie’s common stock it in essence granted itself, after bullying the Fannie and Freddie boards into accepting conservatorships they didn’t need while refusing to tell them the terms that would be imposed upon them in the aftermath. All that is true, regrettable and deplorable.
But what happens now? I believe that in a negotiated settlement between the Trump administration and plaintiffs in the lawsuits, it is more likely than not that the warrants will be exercised–although likely on terms different from and more favorable to shareholders than the original terms of the PSPAs–simply because that will be one of the components required to get a deal done. Do I wish it were otherwise? I certainly do. But what’s the alternative?
None of the plaintiffs in the net worth sweep cases challenged the original action by the government to take over the companies in 2008, or the terms imposed upon them by the PSPAs. (There is a reason for that, which I don’t agree with–and if asked won’t say what it was–but that’s done; “it is what it is.”) The “takeover and the terms” of the 2008 conservatorship WERE challenged in the Washington Federal lawsuit, but as I first learned from the Rule of Law Guy and have subsequently confirmed elsewhere, the lead counsel in that suit took it on contingency with a view to settling, and are highly unlikely to want to invest the significant amount of time and money required to carve themselves out of a settlement and pursue years worth of litigation on their own. Without credible leverage of continued litigation against the warrants, which so far I’ve seen no evidence of, I have to conclude that–as unpleasant as it is to contemplate Treasury being rewarded for its illegal behavior–the warrants most likely are in play."
