Replies to post #509085 on Fannie Mae-No Politics (FNMA)

[Guido2]

Wow!

[action8101]

Incredible DD, sir. Hand shake

[kthomp19]

treasury and FHFA are not on the same page, 1 asked for a remand and 1 asked not to remand

They only wanted the en banc hearing regarding the constitutionality of FHFA's leadership structure. Both FHFA and Treasury defended the NWS and wanted it upheld.

makes me reasonably believe this will be a slam dunk, plus a positive 5th circuit ruling will be so much more cheaper for the administration

Sure, a reversal in the Fifth Circuit helps, but do you think a remand does? I don't think it would help nearly as much, because Perry was also remanded (and is going to trial!), yet nobody is talking about that case. The Collins case, if remanded, would be in the same boat only a year behind.

so converting to me is very very difficult if not impossible, I see a lot of roadblocks to converting,

Like what? I see you pushing back against the idea of a junior-to-common conversion, but I would like to know what your specific argument is. The other arguments on this board have all been faulty in one way or another.

as to “The junior prefs hold nearly all the cards” I don’t see it

By dollar amount, the vast majority of the plaintiffs are junior pref holders. They also have contractual rights that have been breached by the NWS.

By contrast, the common shareholders have no contract and have made no headway in the various cases, so their bargaining power is nil.

they want a conversion, because dividends where not paid but should be paid

They want a conversion only if the commons look like they will have value going forward (not a guarantee). It's about dollars. If the junior holders get a good enough conversion rate, they won't care about back dividends.

Nothing at all, but with converting prefs for common they amid it was not proper for them to suspend the dividends, so they admit decisions were made in bad faith

The "bad faith" bit is part of the Perry case, where Lamberth allowed the breach of implied covenant of good faith and fair dealing claims to go to trial.

Suspending the dividends doesn't need to be defended as "proper"; the juniors are non-cumulative and the companies can suspend their dividends at any time and for any reason.

sure they can be released and relisted, they have the credit card of the USA, and according to the government lawyers that is enough

Where did the government say that? They have said that the companies can operate with Treasury's credit line instead of capital, but I don't think that would fly outside of conservatorship. Especially with Calabria coming in, who says that it's a conservator's job to restore the companies to a sound a solvent state (meaning that the conservator's job is not done, and the companies cannot be released, until that happens).