Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2271164 times)

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9120 on: January 11, 2018, 07:02:52 AM »
Question for those who feel that shareholders will be treated favorably in exchange for dropping lawsuits-

Is there a realistic scenario whereby all future litigation risk is removed from the government?   Even in a recap/release whereby warrants are exercised- would there not be a new set of lawsuits raised against the government regarding the legality of the warrants?

You can't say this is an unlikely outcome while simultaneously thinking that the legal route (the spefific legal route challenging HERA constitutionality) is viable.

I have seen this part brought up in several places. At this point I don't see why the warrants are illegal or on what grounds a lawsuit would be brought if they were exercised. Certainly anyone who bought shares after the conservatorship already knew about the existence (and thus possible future exercise) of the warrants.


orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9121 on: January 11, 2018, 08:11:52 AM »
Question for those who feel that shareholders will be treated favorably in exchange for dropping lawsuits-

Is there a realistic scenario whereby all future litigation risk is removed from the government?   Even in a recap/release whereby warrants are exercised- would there not be a new set of lawsuits raised against the government regarding the legality of the warrants?

You can't say this is an unlikely outcome while simultaneously thinking that the legal route (the spefific legal route challenging HERA constitutionality) is viable.

I have seen this part brought up in several places. At this point I don't see why the warrants are illegal or on what grounds a lawsuit would be brought if they were exercised. Certainly anyone who bought shares after the conservatorship already knew about the existence (and thus possible future exercise) of the warrants.

I dont think the warrants were illegal and I think to contest the legality of the bailout you have to put yourself in the time and place of what was going on . It will be a high bar to hurdle that it was completely illegal when you had BAC, WFC, C, GS, GE, Dupont, GM, etc etc needing a bailout from the gov or WEB. Every day there was talk of a huge financial institution possible going belly up needing gov support. Gov got warrants for nearly all of those bailouts too.

The Net Worth sweep a different story, different time, different place. I believe this is also why Berk isn't contesting the original bailout. Way to difficult to say it was illegal at that time.

Im trying to think but cant think of a mechanism that could preclude any more lawsuits in a newco or recapitalized company. If the gov exercises the warrants that means common still exists. I'm sure there is something that you holding common past a certain date or after restructuring would preclude you from suing. Such as accepting shares in the new company or cash selling the shares in the open market as a payout after gov exercises warrants. Who wouldn't accept either, or sell out of shares early with full notice and carry on a lawsuit?  That doesn't of course mean you love the return you would get though.

I think treating pfd favorably is a whole different world then common treated favorably. Prf getting treated favorably would mean par and maybe a div. Common treated fairly would mean you just don't get completely wiped out. Gov could treat common fairly and newco could dilute the shit out of common holders for years and earnings could blow if new competition is substantial.


Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9122 on: January 12, 2018, 05:40:02 PM »
For those that may have been concerned...
from Peter A. Chapman:
Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares.

Order attached
"Come meet this motley crew of misfits, these liars and these thieves. There's no one unwelcome here. And that sin and shame that you brought with you, you can leave it at the door and let mercy draw you near." Listen: https://www.youtube.com/watch?v=DXXxLwxfo0U

doughishere

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9123 on: January 12, 2018, 07:12:19 PM »
A copy of Judge Sweeney's scheduling order entered this afternoon is attached to this e-mail message.  Judge Sweeney directs that (a) amended complaints be filed by Feb. 22; (b) motions to dismiss be filed by June 22; (c) responses be filed by Sept. 20; and (d) the government's reply be filed by Dec. 19.  Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9124 on: January 13, 2018, 09:10:11 AM »
Why does a bloomberg journalist keep focus on stock price and volume on a daily basis? I can now see the general perception on social media that he writes to manipulate stock. Very disturbing.

"High volume in some thinly traded Fannie and Freddie preferred shares today"

https://twitter.com/joelight

I've found it useful throughout my career to spend zero mental energy on the stuff that doesn't matter.  This falls in that category.  Emily, as a college student I know you're early in your investing career, so I would like to suggest you focus your energies on what is important and nothing more.

Ironically, somebody on a message board posting something that doesn't matter to me shouldn't result in me spending time to respond to it, but in this case my response might be beneficial to you.
"Come meet this motley crew of misfits, these liars and these thieves. There's no one unwelcome here. And that sin and shame that you brought with you, you can leave it at the door and let mercy draw you near." Listen: https://www.youtube.com/watch?v=DXXxLwxfo0U

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9125 on: January 13, 2018, 11:10:25 AM »
A copy of Judge Sweeney's scheduling order entered this afternoon is attached to this e-mail message.  Judge Sweeney directs that (a) amended complaints be filed by Feb. 22; (b) motions to dismiss be filed by June 22; (c) responses be filed by Sept. 20; and (d) the government's reply be filed by Dec. 19.  Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares.


question: a big if, but if they move on something legislatively or administratively in 2018, is it viable that the govt wouldn't have to settle lawsuits such as the one above in conjunction with such a move? or theoretically the govt could just act with a legal overhang?

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9126 on: January 13, 2018, 01:22:50 PM »
A copy of Judge Sweeney's scheduling order entered this afternoon is attached to this e-mail message.  Judge Sweeney directs that (a) amended complaints be filed by Feb. 22; (b) motions to dismiss be filed by June 22; (c) responses be filed by Sept. 20; and (d) the government's reply be filed by Dec. 19.  Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares.


question: a big if, but if they move on something legislatively or administratively in 2018, is it viable that the govt wouldn't have to settle lawsuits such as the one above in conjunction with such a move? or theoretically the govt could just act with a legal overhang?

i would answer this way:  1) mnuchin is a banker who is used to seeing hair (litigation risk) on transactions...and what you do when you are an experienced banker is remove the hair as/when you do the deal; 2) congress folks are less experienced with large transactions and will not have a clue as to the need to eliminate the hair when they want to do the deal...in fact, congress isnt even aware that GSE reform is a deal, not just a bill.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9127 on: January 13, 2018, 03:28:58 PM »
Thursday, January 18, 2018    12:00 PM - 1:30 PM EST   
Craig Phillips will discuss the state of financial regulation and housing reform in the Trump Administration.  He will give the Administrationís views on the best path forward.

http://www.whfdc.org/index.php?option=com_jevents&task=icalrepeat.detail&evid=42&Itemid=115&year=2018&month=01&day=18&title=financial-regulation-and-housing-reform-in-the-trump-administration-a-public-policy-luncheon-with-craig-phillips-counselor-to-the-secretary-us-department-of-the-treasury&uid=ac32398b1890bc28d64a3c2c708b76e8
« Last Edit: January 13, 2018, 03:37:24 PM by Luke 5:32 »
"Come meet this motley crew of misfits, these liars and these thieves. There's no one unwelcome here. And that sin and shame that you brought with you, you can leave it at the door and let mercy draw you near." Listen: https://www.youtube.com/watch?v=DXXxLwxfo0U

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9128 on: January 14, 2018, 05:47:26 AM »
Thursday, January 18, 2018    12:00 PM - 1:30 PM EST   
Craig Phillips will discuss the state of financial regulation and housing reform in the Trump Administration.  He will give the Administrationís views on the best path forward.

http://www.whfdc.org/index.php?option=com_jevents&task=icalrepeat.detail&evid=42&Itemid=115&year=2018&month=01&day=18&title=financial-regulation-and-housing-reform-in-the-trump-administration-a-public-policy-luncheon-with-craig-phillips-counselor-to-the-secretary-us-department-of-the-treasury&uid=ac32398b1890bc28d64a3c2c708b76e8

predictions from the big brains here on this board?

i'm guessing at this point he's got to mention more than the standard 'protect taxpayer and 30yr mortgage' line.  but I doubt he goes into deep specifics.   so I expect somewhere in the middle where he touts or refutes some specific concepts like:  explicit govt guarantee, multiple guarantors (i.e. competition), utility model, ginnie mae wrap role, and possibly how the transition to the new system works.  he'll likely reiterate their desire to go through congress.

I don't think he'll mention warrants in a positive light; at a minimum it's optically best to put proper policy above warrants as the driver of reform.

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9129 on: January 14, 2018, 05:49:37 AM »
A copy of Judge Sweeney's scheduling order entered this afternoon is attached to this e-mail message.  Judge Sweeney directs that (a) amended complaints be filed by Feb. 22; (b) motions to dismiss be filed by June 22; (c) responses be filed by Sept. 20; and (d) the government's reply be filed by Dec. 19.  Judge Sweeney's order also denies without prejudice the government's supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares.


question: a big if, but if they move on something legislatively or administratively in 2018, is it viable that the govt wouldn't have to settle lawsuits such as the one above in conjunction with such a move? or theoretically the govt could just act with a legal overhang?

i would answer this way:  1) mnuchin is a banker who is used to seeing hair (litigation risk) on transactions...and what you do when you are an experienced banker is remove the hair as/when you do the deal; 2) congress folks are less experienced with large transactions and will not have a clue as to the need to eliminate the hair when they want to do the deal...in fact, congress isnt even aware that GSE reform is a deal, not just a bill.

ok, thanks.  if i'm a congressperson, like tom cotton questioned, i'd like to have some conclusion on any large legal compensation overhang before signing off on a deal.  it's wild the courts take so long.