Absent actual evidence in the real world to the contrary, this is wishful thinking. The fact that Mnuchin hasn't/isn't acting administratively is consistent with the fact that this plan could be aligned to his agenda, rather than administratively implementing Moelis.
Evidence in the real world of what? I don't follow.
Given that Mnuchin cannot unilaterally implement two of the core parts of the Milken proposal, how do you expect that to be a plausible downside scenario? I don't see how the Milken plan could be amended into something Treasury can do by itself. It begins with amending the charters, something only Congress can do.
It can't be. Hence why I'm worried that he's waiting for another Congress & a new FHFA director to stand behind him. If he wanted to go the route of Moelis, he can do that today. Doesn't need a new congress. Doesn't need a new FHFA director.
With respect to your legal argument, all of the legal arguments to date have passed every basic common sense test (and seemingly the opinion of some attorneys), yet we've been absolutely blindsided by the judicial branch opining that it does not have the authority to review. How does that argument not also apply to the liquidation preference in the event of receivership? You're acting like its a probable event that we win a liquidation preference suit and I just don't see how you're optimistic on the legal front at this point.
To be clear- I remain cautiously optimistic and am playing devils advocate.
It only takes one win, and we're not close to the point of all outstanding cases being dead right now. I just meant that receivership opens a whole new can of worms for the government because it breaches contracts (wrt liquidation preference) with all
current junior pref holders, giving them all standing to sue. Right now only those who have continuously held since before the NWS have standing.
This is where I differ from the Seeking Alpha crowd that shouts "the government can't exercise the warrants because it will be a taking!" in that the liquidation preference rights have been explicitly recognized by the court, and FHFA/Treasury are trying to argue that they aren't ripe yet. Receivership certainly would ripen those claims along with creating a bunch of new ones. To be sure there is still plenty of downside: the cases would take years to resolve and might only result in a return of cost basis, perhaps with interest.
On a side note, this might be why we have seen only one major case (Washington Federal) challenge the conservatorship itself: the set of people/companies who have held shares since before the conservatorship and are willing to spend the time and money to drag it out in court is likely vanishingly small by now.
