kthomp19 - Completely agree with the chart - except that it realistically needs to be based on 3%. Every time this discussion comes up in terms of organically recapping - this song plays in my head:
You can't break the laws of physics - the more the GSEs earn - the more the balance sheet grows. It would take like 40 years of no housing downturn to recap at 3%. By then we would all be wiped out - common, JPS, man, women and child - by the next downturn that would let the Feds step in and seize the GSEs for real this time. The only thing that would prevent this is a Hail Mary legal victory - and our track record so far is somewhat less than stellar.
In regard to commons - I see Bill Ackman's estimate of a potential $30 as very reasonable. Based on $20B earnings, Nomura said that you would expect about 2/3s handed out as dividends. This would be $2B for JPS based on their current rates and $1.20 per share of existing commons if the warrants were exercised. Based on a 4% return - this would be $30. A win, win for all shareholders and a home run for commons if the warrants go away.
I think things are progressing slow but in the right direction. But any talk of an organic recap is ignoring the numbers.
Market Data 
Markets 
AI
