kthomp19
36 minutes ago
Howard is about to lose his shirt thinking that commons need to be treated fairly for outside capital to invest...
Not personally. He sold his common shares a long time ago.
Still, he's wrong on that count and others who do own legacy commons and agree with his flawed thinking are certainly at risk of losing substantial amounts.
These two parties' interests are literally on opposite sides of the negotiating table.
That's the huge flaw in Ackman's thesis. He wants Treasury to exercise the warrants because in his mind it would align Treasury's interests with legacy common holders'. A senior-to-common exchange inverts that and gives Treasury a reason to grab as much of the pie as they can, thus leaving as little as possible behind for legacy common.
The fact that Ackman wants the warrants exercised also illustrates the backward thinking of some common shareholders, the ones who take Ackman's outdated $23-47 price target from 10 years ago and then argue that the warrants should be cancelled rather than exercised, leading to a higher common share price. They start with a high share price and start arguing for the steps it would take to get there, rather than looking at FHFA and Treasury's actual incentives first and estimating a share price from there.
kthomp19
38 minutes ago
Exactly. Regardless of what they say, to save the banking system, they treated the GSEs as a financial trash can.
No, this is false. FnF did NOT buy toxic mortgages after conservatorship started. Tim Howard looked at their books of business and found that the late 2008 and 2009 books of business were of high quality, similar to 2003-2004, which totally debunks the "FnF were forced by FHFA to buy toxic mortgages" myth.
kthomp19
38 minutes ago
Not an all-talk do-nothing hypocrite!!!! Please don't expose me.
Either show me your court filing or stop talking about supposed illegalities, like the commitment fee, and I will withdraw my accusation.
Your hypocrisy is already on display for all to see. You constantly talk about government wrongdoing but have yet to get off your ass and do something about it. All I'm doing is pointing it out.
I would love for you to join me and help me with a lawsuit. Why not?
To be blunt, it's because I don't think your lawsuit has any chance of succeeding. Any time and/or money spent on it will be wasted.
You are quickly running out of time, by the way. If a senior-to-common cramdown really does occur it will be nigh impossible to undo the dilution. FHFA is protected from injunctive relief by 4617(f), and any takings or illegal exaction suit against Treasury can only result in money damages being paid, not undoing the dilution.
Unless you have a vested interest and prefer to see the gov cramdown
I don't want a senior-to-common cramdown to happen. I expect it to. That's why I have positioned myself in the junior prefs instead of the commons, so that such a cramdown doesn't hurt me nearly as much.
and dilution of us poor retail investors.
Oh come off it already. You will get no sympathy from FHFA or Treasury when they execute their plan.
If you bought your shares after the conservatorships, and especially after the NWS, you do not have the moral high ground.
kthomp19
39 minutes ago
Toxic or not Fannie and Freddie were the engine used to bailout the banks.
More sensationalist nonsense with no evidence behind it. The "evidence" you list doesn't have anything to do with this statement. The first piece only talks about the Fed engaging in a bailout, and the second only said there was a "plan". Tim Howard found that that "plan" never materialized when he looked at the numbers: FnF's book of business was of high quality just after they went into conservatorship, comparable to 2003-2004 rather than 2006-2007.
If the insinuation was that FnF were put into conservatorship for the purpose of facilitating this bailout, it falls flat. FnF had made a lot of political enemies via their aggressive lobbying and that was their undoing more than anything else.
Fannie and Freddie did not meet any of the 12 requirements passed by the newly passed HERA legislation justifying conservatorship.
Wrong. The boards consented to conservatorship, fulfilling the ninth condition: 12 USC 4617(a)(3)(I).
If you're going to bring up the tired old talk about the boards being coerced into consenting, three things:
1) One of the court cases (Washington Federal) already alleged this and the entire case was dismissed
2) Hank Paulson admitted as much in his book On the Brink, and yet that didn't help in the Washington Federal case
3) No currently outstanding lawsuit alleges this
Funnily enough, my first signature line does not apply to the "FnF's boards were coerced into consenting to conservatorship" argument because it was brought in a lawsuit and still failed.
RickNagra
3 hours ago
Barr has talked to Bessent. Huge.
Rep. Andy Barr, who is running to lead the House Financial Services Committee next year, is bullish on the idea: “There's more work to do to recapitalize the GSEs before they can be released,” he told our Eleanor Mueller. “But the point is, if you can get the GSEs into better financial shape, then it could be a substantial pay-for for the tax legislation, and it can deliver a more sustainable housing finance system.”Barr said he has discussed the GSEs with Scott Bessent, Trump’s nominee to lead the Treasury Department.