Fannie Mae-No Politics (FNMA)

[kthomp19]

You guys should really read all the comments by Arkham on Bradford's most recent SA article. Very compelling argument.

I agree.

Keep in mind that his arguments all fit together. He thinks that an equitization (as opposed to writedown/cancellation) of the seniors is all but certain at this point. Treasury is going to get another pound of flesh on top of what they've already received.

So the question isnt a matter of if we will win for the takings and breach of contract but rather WHEN it will happen.

There are three types of lawsuits left:

1) Lamberth's case, breach of contract and implied covenant of good faith and fair dealing. Damages here would only be for preferred shareholders.
2) Direct USCFC claims. Those will only be payable to the named plaintiffs unless classes are certified, and most cases (including, most notably, Washington Federal) do not seek to have current shareholders included in the class.
3) Derivative USCFC claims. Payment on those would only go to the companies, and actions taken afterward or in conjunction can harm shareholders, i.e. dilution.

Technically the door is open for retrospective relief in Collins, but even some of the Supreme Court Justices (Gorsuch, Kagan) realized that the majority opinion basically already denied it.