The last letter agreement reduced the incentive for the government profiting, but since liquidation preference was and is still in place, one can make the argument they profit, but at a later date. I, personally, am dubious of the idea that the NWS being ended suddenly creates some kind of urgency for a Yellen Admin to settle. There is clear incentive for JPS to settle (and I now think Par is a best-case scenario), but I just don't see it on the Treasury side. If UST was willing to roll the dice on SCOTUS hearing the case, they are not gonna get religion now and settle before ruling. Seems like only thing that could do the trick would be a major adverse ruling from SCOTUS, as others have echoed.
So much analysis here was based on the assumption that Mnuchin wanted to end the conservatorship in a manner equitable to legacy shareholders but that was never the case so all this analysis has been faulty. Mnuchin on the way out the door still talks of legislation aimed at restructuring the GSEs while his policies have firmly worked to destroy the interests of legacy shareholders. Mnuchin teed this up for Yellen nicely. She doesn't have to do anything and this is on cruise control until SCOTUS. Yellen has already stated that the GSEs need to be "restructured" and in her opinion the best option is for legislation. But she must wait for the SCOTUS decision before this can be done. (Note, she may or may not do that because the status quo may be preferred for Treasury).
Our hope is that SCOTUS (or remand) unwinds the NWS, and a forced settlement occurs with JPS. That's it. Otherwise, in the event of a loss there are any number of options where JPS get nothing: selling core assets to private firms while leaving a worthless shell behind, legislation for new entrants to have an explicit backing, or, status quo.
I'm staying in and betting on a SCOTUS win.
+1