Delisting/Commons iced-out & interest rates/10% dividends.
I have 2 thoughts to share and would love anyone's comments. 1) i saw somewhere else online somebody make an extremely interesting point.
He said that, as we know, when FnF were delisted and put onto the OTC, it meant that no institutional money could continue to hold those shares. It's against their own rules to hold OTC stocks. We're talking pension funds, etc. Here's where the interesting point was made...by eliminating institutional investors from the ranks of common shareholders, it meant that in the future, when reform of the GSEs was to be addressed, there would BE NO COMMONS AT THE NEGOTIATING TABLE AT ALL! And THAT would make it much easier for the TBTF to use its politician stooges to steal FnF's business. Pension funds would have enough clout, lobbying power, and $ to mount serious lawsuits against what was done to FnF if FnF had remained on a major exchange and/or over $4 or $5 or $10 (most pension funds' minimum allowed). So, delisting was probably done for the purpose of getting the institutions out of FnF, so that a "reform" plan could then be put forth that wipes out commons and paves the way for TBTF. Very interesting, isn't it? Not all of that would be news, but that different viewpoint on the exact purpose of delisting is fascinating to me.
2) we all have wondered why the abusive 10% dividend rate for senior prefferreds. Isn't there some strategic reason for that high rate such as; combined with gvt controlling the GSEs activities, there'd be no way the GSEs could borrow $ at the historically super-low interest rates to pay off the 10% mandated dividends? The criminals who setup the 10% knew that interest rates would very soon plummet to historic lows. They made sure to tie the GSEs' hands and prevent them from getting any relief in paying that 10%. (This was all before the even more criminal NWS escalated that issue to new levels of madness).
