FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[rros]

Kudlow was outspokenly in favor of GSEs shareholders. Will he be of any influence should he finally get Cohn's job? Or will he end up being metamorphosized by the government, like Mnuchin/Mulvaney?

tim howard has a comment up to his last post from his book quoting kudlow as being virulently anti-congressional charter for GSEs...wanted them to become pure private companies.  but i do believe that given his free market capitalism bent, he would want GSE shareholders to get back to square given the 10% moment has been reached.

Thanks. Yes, he most likely wants the government completely out as TH states. But check HalfMeasure's tweet by LK... That wasn't his only tweet. He was saying the same thing over the radio and in cnbc interviews over a period of time. Point is, he was very specific at defending shareholders' rights w/o one mention of Fannie and Freddie (which he may not like). I have followed him for a decade when he was commenting daily at cnbc together w/Cramer. He is seriously free market and his defense of shareholders could be real. As oppose to yapping on top of a hedge fund's check.

My question stands, will he turn into a do-nothing Mnuchin/Mulvaney/Ross?

At a minimum, Wayne's Goldman fears have subsided a little?

[SnarkyPuppy]

Larry Kudlow - https://www.dropbox.com/s/soupvnqqu349wz3/20150718__Kudlow%20Show%20Fannie%20Mae.m4a?dl=0

Interesting.  Is nobody worried that only pre-NWS are compensated?

[Midas79]

Larry Kudlow - https://www.dropbox.com/s/soupvnqqu349wz3/20150718__Kudlow%20Show%20Fannie%20Mae.m4a?dl=0

Interesting.  Is nobody worried that only pre-NWS are compensated?

Pre-NWS shareholders shouldn't be worried at all.

How exactly have post-NWS holders been screwed? Or more to the point, what reason does Kudlow have to believe that post-NWS holders have been screwed?

[rros]

Larry Kudlow - https://www.dropbox.com/s/soupvnqqu349wz3/20150718__Kudlow%20Show%20Fannie%20Mae.m4a?dl=0

Interesting.  Is nobody worried that only pre-NWS are compensated?

Looks like a 2015 show as LK speaks of government compensating us in 2016. However, he kept the same point of view of unjustice to shareholders up until recently.

The main risk we face, kudlow or not kudlow, is that anyone becoming part of the administration will have access to new information we may not have. This new information could make them change their stance or may force them to. So what they may have thought before doesn't really matter.

[rros]

Interesting article by Alex Pollock regarding the real estate market. Not directly related to us. Just that he is pessimistic about this market.
http://thehill.com/opinion/finance/378004-home-prices-are-soaring-as-federal-reserve-hope-to-avoid-market-crash

[cherzeca]

Larry Kudlow - https://www.dropbox.com/s/soupvnqqu349wz3/20150718__Kudlow%20Show%20Fannie%20Mae.m4a?dl=0

Interesting.  Is nobody worried that only pre-NWS are compensated?

Pre-NWS shareholders shouldn't be worried at all.

How exactly have post-NWS holders been screwed? Or more to the point, what reason does Kudlow have to believe that post-NWS holders have been screwed?

the pre/post NWS debate is meaningless; pre-NWS holders sell their stock and claims to buyers who become post-NWS holders

[DRValue]

Larry Kudlow - https://www.dropbox.com/s/soupvnqqu349wz3/20150718__Kudlow%20Show%20Fannie%20Mae.m4a?dl=0

Interesting.  Is nobody worried that only pre-NWS are compensated?

Pre-NWS shareholders shouldn't be worried at all.

How exactly have post-NWS holders been screwed? Or more to the point, what reason does Kudlow have to believe that post-NWS holders have been screwed?

the pre/post NWS debate is meaningless; pre-NWS holders sell their stock and claims to buyers who become post-NWS holders

I've been thinking about how any compensation etc. payments would be made to past holders of stock.

For example, if Junior prefs are found to be entitled to past missed dividend payments, would shareholders who had owned the shares at the time a dividend would've been declared and paid, be due any dividend if they have since sold their stock?

I used to think they should be entitled to any award but now, thinking about how bankruptcy contract claims can be sold, I'm more inclined to think the reasoning would be that only current shareholders at the time of any court victory would receive any award.

Is that the way to think of it Cherzeca?

In other words, if I bought a junior pref today and the courts vacated the NWS and declared that junior prefs are owed all previous undeclared dividends, tomorrow, then they would all be paid to me because the previous holder sold their claim, in the form of a stock certificate, to me.

[cherzeca]

Larry Kudlow - https://www.dropbox.com/s/soupvnqqu349wz3/20150718__Kudlow%20Show%20Fannie%20Mae.m4a?dl=0

Interesting.  Is nobody worried that only pre-NWS are compensated?

Pre-NWS shareholders shouldn't be worried at all.

How exactly have post-NWS holders been screwed? Or more to the point, what reason does Kudlow have to believe that post-NWS holders have been screwed?

the pre/post NWS debate is meaningless; pre-NWS holders sell their stock and claims to buyers who become post-NWS holders

I've been thinking about how any compensation etc. payments would be made to past holders of stock.

For example, if Junior prefs are found to be entitled to past missed dividend payments, would shareholders who had owned the shares at the time a dividend would've been declared and paid, be due any dividend if they have since sold their stock?

I used to think they should be entitled to any award but now, thinking about how bankruptcy contract claims can be sold, I'm more inclined to think the reasoning would be that only current shareholders at the time of any court victory would receive any award.

Is that the way to think of it Cherzeca?

In other words, if I bought a junior pref today and the courts vacated the NWS and declared that junior prefs are owed all previous undeclared dividends, tomorrow, then they would all be paid to me because the previous holder sold their claim, in the form of a stock certificate, to me.

if some court voided the NWS, then there would be an additional remedy proceeding.  Ps would argue for applying all sweep payments in excess of 10% dividends as pay down of senior preferred resluting in a complete retirement of senior preferred (aka 10% moment).  since juniors only get divs as/when declared, there is no claim for Ps to get divs.

[DRValue]

@Cherzeca

I don't think whatever way this plays out will result in a dividend windfall, but I do recall plaintiffs arguing in a court hearing (Perry, I think) that junior pref and common should have been paid rateably alongside the senior pref, i guess getting at contractual rights.

I guess that this would only apply should the NWS stand.

I'm betting this plays out with the seniors being declared paid and retired, the GSE's pay a re-insurance fee to the Treasury while they rebuild capital and then go about raising capital in one way or another.

I'd be interested in what that would do to the warrants though as I have read (somewhere...) that the original intent was that they would only be exercised if the Treasury was not be able to recover its investment in the seniors. I don't know how the common warrants would be worth anything if the treasury lost its investment in the seniors but that's for another day.

I can't cite anything right now but if i can find the text regarding the intention of the warrants i'll link to it.

I wonder if the text shows the intention for the warrants was as above, and the seniors are paid down, a case could be made to invalidate the warrants?

[Midas79]

I'd be interested in what that would do to the warrants though as I have read (somewhere...) that the original intent was that they would only be exercised if the Treasury was not be able to recover its investment in the seniors. I don't know how the common warrants would be worth anything if the treasury lost its investment in the seniors but that's for another day.

I can't cite anything right now but if i can find the text regarding the intention of the warrants i'll link to it.

I wonder if the text shows the intention for the warrants was as above, and the seniors are paid down, a case could be made to invalidate the warrants?

The primary intent of the warrant was to drive the share price down and make it appear that the companies were in more trouble than they actually were. FHFA's extremely shady accounting practices were the final nail in the coffin. I believe this is in one of the released documents from the Fairholme discovery.

the pre/post NWS debate is meaningless; pre-NWS holders sell their stock and claims to buyers who become post-NWS holders

Legally yes. But I'm trying to get more into Kudlow's mindset. If Kudlow believes that only pre-NWS shareholders were screwed, and if enough shareholders bought after the NWS (making them easy to demonize as dirty speculators), then Kudlow might conclude that it's not worth "unfairly" compensating post-NWS holders to make pre-NWS holders whole. Of course that assumes that Kudlow has that much power over this process.