Replies to post #793085 on Fannie Mae-No Politics (FNMA)

[DaJester]

"Existing common shareholders do not own the companies at all. They have no economic rights and no voting rights. Nothing."

If you want to make an extreme click-bait statement, sure.

But as usual, you state facts yet drill down to a single conclusion that only time will tell if it's true. We are still shareholders. Shareholders have the rights associated with the Shareholder agreement. These rights do not dissolve suddenly in 2012 because of a contract between two government entities that violates the fair dealing with Shareholders. These rights travel with the shares. This is backed by the Berkley verdict.

The economic and voting rights are temporarily suspended during conservatorship. That is why it is a Conservatorship and not Receivership. Dilution of those rights is possible as part of the emergence from Conservatorship. In fact, Treasury could wipe all of the Common and JPS value based on their LP amounts. It's also possible they don't wipe 100% of the value of the companies. And no - the amount of equity Treasury took from AIG has zero bearing on what they may take from the GSEs.

Furthermore, FHFA (control) and Treasury (ownership) fall under the Executive Branch. As such, the control and ownership can be altered based on political winds of who is in charge of the Executive branch at any time. It is possible the leader of the free world will abscond with the value of 2 publicly traded private entities worth billions of dollars. It's also possible the leader of the free world will believe in the 5th Amendment. We may see a concept similar to Tyler v. Hennepin County, where the GSEs would be seen as obligated to render unto Caesar what is Caesar's, but no more. The resolution of Conservatorship may include NOT further violating the covenant of good faith and fair dealing with Shareholders. IMO, this would be the smarter resolution.

It is completely unnecessary for Treasury to liquidate the GSEs in order for them to function again or to be rehabilitated. There is no need for a government windfall to make Caesar whole. So while I agree with you that it is possible Treasury conversion wipes common shareholders out completely, I also see other possibilities. If you don't see those possibilities, that's on you and I'm sure you will invest accordingly.

[Wingsjr]

You’ve pumped this bull 💩 for years. I can tell you with 100% certainty, common shareholders will get very rich off FnF. We will see 80/share minimum. If they try to screw us shareholders, there will be no second offering or reoffering because we will sue and nothing will happen for another 15 years. The SCOTUS already hinted that a takings case would be won by us if brought to the SCOTUS.

[Wise Man]

The fraudsters want to become more Communist than China.

Existing common shareholders do not own the companies at all. They have no economic rights and no voting rights. Nothing.

Economic rights don't exist because there is no "right" to anything, but a legal claim.
For instance, the JPS have a legal claim on a dividend payment as per contract with FnF, but there is no Right, as those can be suspended at the discretion of the Board of Directors (for recapitalization, not for fun) and also, restricted by law when FnF remain undercapitalized (Restriction on Capital Distributions. IN GENERAL).
A Common Stock represents a legal claim on all the future EPS ( Net Income Attributable to common shareholders, after the payment of compensation to the Preferred Stocks, and shares on a fully diluted basis -Warrant-. Hence today's market price discounting a Machiavellian Conservatorship).

You mean Property Rights like the Legal Ownership, which is inherent to a common stock and they've remained deposited in our broker accounts all along, acting as custodians.
You are talking about a Receivership instead.

Other rights, like Voting Rights were transferred to the conservator in order to allow it to fulfill its statutory mission.
Once FnF have met some minimum thresholds (MANDATORY release Undercapitalized in the FHEFSSA , struck by HERA. Image below), FnF are released from the TEMPORARY Conservatorship, and those rights are returned, unless the conservator uses its Incidental Power "in the best interests of the Agency" ("authorized by this section" means Capital Adequacy-wise), to extend it more years, seeking a "membership cleansing" (FHLB-style in a 2016 Final Rule) with the redemption of the JPS (Core Capital and AT1 Capital), which is what is happening (Conservator Risk).