Fannie Mae Preferred S (FNMAS)

[5bagger]

Our lawyers either attack "ripe" or FHFA now

Not sure how 'ripe' fits into the equation. If someone borrows something and doesn't give it back, then the offended party should accumulate the amount(s) lost and be able to claim that loss. The fact that the amounts continue to accumulate and is a moving target, shouldn't be a defense. Govt. claims that Fairholme agrees that c-ship was allowable, but Fairholme does not state that it is INTERMINABLE. Taking of financial assets of a financial company is different than taking of a physical railroad - there are no physical / hard assets in a financial company.

As for FHFA, they should consider JoeSchlecta's point - which is "what did you know and when did you know it" - as you point out. This attacks FHFA

The 'quotes' by insiders (in the 3rd Amendment and subsequent report (I believe Aug 2013) from FHFA say that 'normal' profits were not going to be able to pay back the principal. But:
1) DTA - total of about $100B
2) Lawsuits for $200B (which have netted between 12.5% and 20% - JPM and UBS on each end) for $25-$40
3) Increase in g-fee from 25BP (average 2002 to 2007) to 55BP
4) Possible reversal of losses (unknown and unforeseen what impact this would have had - but it did recapture 25-30B EACH)

N.B.
*IF* the government would have allowed them to carry the DTA and to amend the DTA as the years passed - the balance would have started out $40B less and would have only adnvanced by 60% of that balance. By declaring - ex-ante - that they were to-be-considered as non-going-concerns (i.e. never allowed to make a profit and repay the debt) the government and the auditors disallowed this (favorable) treatment.

60% of 147 = $88B and that is with the 10% dividend attached (accumulating and compounding). The balance never would have reached $88B it would have only reached $50B or so (guess) and that is combined.
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They were a "willing market participant and decided to beg the treasury to please take all of the profits" almost 4 years after c-ship where the FHFA said that they were going to: "conserve and preserve the assets until the companies were in a safe condition"

Imagine: you are the head of FHFA and now starting to stare down the barrel of immense profits. You advise the gov't of this. Then this new agreement comes into play.

There are witnesses (accountants) who told DeMarco that the profits were coming. Those witnesses will be called. No doubt they knew 6-12-18 months before as most companies in america.

They will find the witnesses.

This is all my conjecture....
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