Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 4272585 times)

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14380 on: November 26, 2019, 05:13:49 PM »
Tim Pagliara...
https://twitter.com/timpagliara/status/1199470618783166464?s=21
The Fifth Circuit didn’t argue with David Thompson either.  I doubt that this was a cosmic coincidence.
"You are life, You are life, in You death has lost its sting.  I'm running to Your arms, I'm running to Your arms.  The riches of Your love will always be enough, nothing compares to Your embrace.  Light of the world, forever reign." Listen: https://www.youtube.com/watch?v=ADuWzd7x25c


Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14381 on: November 26, 2019, 06:42:54 PM »
Judge Sweeney transcript attached...

Not only is the government schizophrenic (Judge Sweeney's words previously), they have also acted like the mob (again, according to Sweeney).  According to this transcript, she has already completed a rough draft of her ruling.  Seems to me like this case won't be dismissed: "I want the parties to have their day -- well, we’ll have many days in court, but I mean, for this initial oral argument. Let me just -- we’re going to go off the record just for 10 minutes so we can just..."

Yeah, I don't see how "I want the parties to have their....[day] in court" squares with her granting the motion to dismiss.

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14382 on: November 29, 2019, 06:48:32 AM »
Judge Sweeney transcript attached...

Big day today, our SC filing is due.   Should be interesting to see if the lawyers indirectly ask for the SC to take up the APA given Calabria and Mnuchin shockingly defend the NWS day after day in court and publicly.

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14383 on: November 29, 2019, 06:55:59 AM »
Plaintiffs have asked SCOTUS to take the APA claim, and rightfully so using the same rationale ask that they take the constitutional remedy claim. https://www.supremecourt.gov/DocketPDF/19/19-563/123839/20191127103429028_USSC%2019-563%20Brief%20for%20Respondents.pdf

Judge Sweeney transcript attached...

Big day today, our SC filing is due.   Should be interesting to see if the lawyers indirectly ask for the SC to take up the APA given Calabria and Mnuchin shockingly defend the NWS day after day in court and publicly.

muscleman

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14384 on: November 29, 2019, 07:59:47 AM »
Plaintiffs have asked SCOTUS to take the APA claim, and rightfully so using the same rationale ask that they take the constitutional remedy claim. https://www.supremecourt.gov/DocketPDF/19/19-563/123839/20191127103429028_USSC%2019-563%20Brief%20for%20Respondents.pdf

Judge Sweeney transcript attached...

Big day today, our SC filing is due.   Should be interesting to see if the lawyers indirectly ask for the SC to take up the APA given Calabria and Mnuchin shockingly defend the NWS day after day in court and publicly.

Thank you. When will SC say if it takes the case or not?
I am muslceman. I have more muscle than brain!

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14385 on: November 29, 2019, 08:00:48 AM »
According to David Thompson during the Sweeney oral arguments, Dec 13.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14386 on: November 29, 2019, 12:47:50 PM »
Judge Sweeney transcript attached...

Tim Howard's comments posted this afternoon on the transcript...
https://howardonmortgagefinance.com/2019/10/21/some-simple-facts/#comment-13727

NOVEMBER 29, 2019 AT 1:43 PM
I’ve now finished reading the entire 392-page transcript of the Oral Argument in the Defendant’s Motion to Dismiss the various lawsuits in Judge Sweeney’s Court of Federal Claims, and agree that the Washington Federal case—the only one which challenges the 2008 conservatorships—is likely to survive the motion to dismiss. The government made two arguments for dismissal—that the Washington Fed suit needed to be filed within the 30-day window applicable to the companies were they to have challenged the conservatorships, rather than the general six-year statute of limitations that applies to the other suits, and that the Washington Fed plaintiffs had failed to state a valid takings claim. My reading of the transcript is that Sweeney will side with the plaintiffs on both issues, allowing the Washington Fed suit to continue.

Most if not all of the suits against the August 17, 2012 net worth sweep are likely to survive as well. Sweeney all but said as much when, just prior to breaking for an afternoon recess, she said, ““I want the parties to have their day — well, we’ll have many days in court, but I mean, for this initial oral argument…”.

I also was struck by Sweeney’s clear and direct statements about how she sees the merits of both the 2008 conservatorship challenge and the 2012 net worth sweep. On the former she said, “I’m very concerned that Treasury approaches the board of directors of the enterprises and says, you either agree to the conservatorship or you’re out. That’s – that sounds like undue influence, if not a death grip,” and “The enterprises were never able to repay the debt to the United States taxpayer… and so the– Freddie — the enterprises were never able to right their financial ships of state and then make their profits while not borrowing anything from the U.S. taxpayer and then pay what dividend they can to their shareholders. And that doesn’t seem cricket. That doesn’t seem cricket to the way our government operates.” She was even more unambiguous in her description of the net worth sweep: “I hate to say it, I’m not — this is going to sound so flip, and I don’t mean for it to, but this is like the mob. And it’s not, of course, but, I mean, you have all the money is being turned over to the Treasury.”

The substance and tone of Sweeney’s comments throughout the hearing was strikingly different from we’ve noted in the recordings or transcripts from other cases concerning Fannie and Freddie, and of course there’s a reason for it. All of the proceedings so far have dealt solely with issues of law, and the government has consistently given a false rendition of the facts leading up to and surrounding the companies’ initial placement into conservatorship as well as the subsequent net worth sweep. Judge Sweeney permitted discovery in her case, and she therefore has become intimately familiar with the facts, which to put it mildly do not favor the government. Sweeney’s view of the merits of the case thus is not just a harbinger for how she might rule if the cases in her court ever make it to trial, it’s a foreshadowing of how the judges in other cases likely will react once they focus on the actual facts of the issues they’re being asked to adjudicate.
« Last Edit: December 01, 2019, 05:33:12 PM by Luke 5:32 »
"You are life, You are life, in You death has lost its sting.  I'm running to Your arms, I'm running to Your arms.  The riches of Your love will always be enough, nothing compares to Your embrace.  Light of the world, forever reign." Listen: https://www.youtube.com/watch?v=ADuWzd7x25c

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14387 on: November 29, 2019, 03:30:31 PM »
Guys, what do you think about the 3 possible scenarios Gaby Heffesse lays out regarding the Supreme Court (1) not taking the case, (2) taking the case and gov't wins, (3) taking the case and gov't loses.  I'm trying to figure out how juniors prefs get hurt in any of those scenarios.  Thanks.

Video: at around 9:30 https://www.realvision.com/tv/shows/trade-ideas/videos/an-update-on-fannie-and-freddie-the-road-to-recapitalization

Here's the transcript...
GABRIELLA HEFFESSE:There's three scenarios. There's one, the Supreme Court does not take this up, in which I think we can see the PSPA amendment around the second quarter because it, I think,forces the government's hand to settle because as they said,it frustrates their policy objectives. They can't do it. B, Supreme Court decision in June,there's two outcomes,either the government wins or the government loses. I think both of them and then a pretty similar outcome actually. Because if they win, then they can just do whatever they want. They have more flexibility. If they lose, they settle the litigation and they have great political cover to really not have the headline of you've made hedge funds billions of dollars. I don't think there is a bad outcome for the administration given what their policy goals are.

JUSTINE UNDERHILL:What about in terms of shareholders, do you see negative outcomes there or positive?

GABRIELLA HEFFESSE:That gets into the timing. If the Supreme Court takes the case, and they go in June, I don't think we'll see the PSPA amendment until late summer next year. Really, if they don't take it, and it signals a settlement, it's somewhat positive. I think that the shareholders think there is a good chance of winning this case in the Supreme Court. If it's legally decided the benefit that you get from it isyou can't retroactively change it. If there is a different president and they would change their policy objectives, having the net worth sweep deemed to be illegal in the first place, make sure that it will never happen again and gives more investor confidence in investing in the enterprises.
"You are life, You are life, in You death has lost its sting.  I'm running to Your arms, I'm running to Your arms.  The riches of Your love will always be enough, nothing compares to Your embrace.  Light of the world, forever reign." Listen: https://www.youtube.com/watch?v=ADuWzd7x25c

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14388 on: November 29, 2019, 10:47:09 PM »
I think she is right. The case is more of a battle for the common dilution and how fast a recap will take. If plaintiffs win Collins (best case), admin has cover for a settlement that would include paydown of pfds + tax credit of ~$30b for overage payments which helps common dilution and accelerates recap. Pfds are money good here. If plaintiffs lose, admin doesn't have the cover to be as aggressive and may look to monetize a portion of their snrs which hurts common with more dilution. But again as pfd holder you are fine as any residual value for common means money good for pfd. If SCOTUS rejects the case you are probably somewhere in the middle (write down snr pfds but no tax credit).

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #14389 on: November 30, 2019, 06:31:28 AM »
Gary Hindes on recent developments (attached)...
"You are life, You are life, in You death has lost its sting.  I'm running to Your arms, I'm running to Your arms.  The riches of Your love will always be enough, nothing compares to Your embrace.  Light of the world, forever reign." Listen: https://www.youtube.com/watch?v=ADuWzd7x25c