no. my only takeaway from Borden is that Thomas once again referred to the Writ of Erasure Fallacy article, which is against severance as a remedy, which is favorable for the unconstitutional structuring claim. moreover, it is a statutory interpretation case includes reference to frankfurter's famous quote re when congress using a word loaded with common law meaning, it is assumed congress wanted that meaning to carry over (re collins, "conservator")
In canceling the Sweep can overpayment include a combination of tax credits and surrender of the warrants that were recently valued by the CBO at 13 billion on table S-10?
7) Treasury’s warrants to purchase 79.9 percent of the common stock of the enterprises expire after September 7, 2028. The warrants were valued at $13 billion at the end of 2020.
if/when a remedy for the NWS is negotiated, tax credits and warrant value can all be on the table...this would be down the road after a SCOTUS APA claim win, and a trial or summary judgment at federal district court. the fed judge will likely "encourage" the parties to negotiate their own remedy rather than order treasury to write a check
Assuming we win on APA claim, what’s your expected time-fame on a suitable capital raise that entails settling with pfds by conversion to commons? In other words, can you envision us winning on APA but pfds languishing?
my guess is that the junior preferred will still trade at a substantial discount to par until a common stock financing is teed up...since I expect a financing will want to eliminate the currently existing high cost preferred in order to set up the possibility for common dividends. when that will be is very hard to predict.
I highly doubt SCOTUS grants relief outright, that being said it was very encouraging to even hear the liberal judges refer to this as nationalization. This one will be close
Here is my point. While SCOTUS may simply affirm the 5th C, I wonder if SCOTUS, in articulating the Conservator's duty, goes one step beyond the 5th C to make clear that not only did the plaintiffs make a plausible showing that the NWS doesnt satisfy this duty, but that the government has a high hurdle in showing why depleting the GSEs' capital to zero is consistent with the Conservator's duty. So yes, while I dont see SCOTUS granting remedy (that would be for the District Court on remand), I wonder whether SCOTUS makes clear in articulating the legal standard that the NWS is inimical to the Conservator's duty...which makes the federal judge's job on remand a much simpler exercise.
Just listened to scotus audio again. Why do you suppose that no reference was made by plaintiff to the Treasury entering into the third amendment knowing that (a) gses were about to become profitable, and (b) the intent of sweep was to ensure they couldn’t exit c-ship? The opportune time to have made that point was when plaintiff made the point that Treasury threw the GSEs a life line.
Secondly, do you have reason to believe that scotus is aware of (a) and (b), and do you think they are aware that (c) forensic accounting shows that the entire c-ship was unnecessary?
Thomas asked SG to explain what would make a "direct claim?"
SG replied that..."voting rights" would cause a direct claim...? did the SG slip? Did he forget that the SPSA agreement along with dividends plaintiff was also deprived of voting rights?
Seemed to me that 3rd amendment will be deemed void ab-initio by a majority, I think a larger majority perhaps all will agree that APA allows shareholders aggrieved by administrative action to bring Direct Claims. I wonder if you could handicap the odds or valuation of the warrants if your guess on outcome is correct? Since common is trading at about 1% of what FNMA would be trading at with current share count at 15x earnings. It seems that the market is discounting 99-1 the possibility of warrants retaining full value. I imaging it is closer to between 10 or 20 to 1 based on how the questions before SCOTUS to SG Moopann were much tougher than to shareholder council who was mostly asked about remedy.
Nice work. I think the plaintiff's argument was that the carry out of the NWS is done by an unconstitutionally structured agency thus the plaintiff should get relief.
Thanks for all you do.
does the way Borden v. U.S. was ruled concern you?
no. my only takeaway from Borden is that Thomas once again referred to the Writ of Erasure Fallacy article, which is against severance as a remedy, which is favorable for the unconstitutional structuring claim. moreover, it is a statutory interpretation case includes reference to frankfurter's famous quote re when congress using a word loaded with common law meaning, it is assumed congress wanted that meaning to carry over (re collins, "conservator")
ROLG,
In canceling the Sweep can overpayment include a combination of tax credits and surrender of the warrants that were recently valued by the CBO at 13 billion on table S-10?
7) Treasury’s warrants to purchase 79.9 percent of the common stock of the enterprises expire after September 7, 2028. The warrants were valued at $13 billion at the end of 2020.
if/when a remedy for the NWS is negotiated, tax credits and warrant value can all be on the table...this would be down the road after a SCOTUS APA claim win, and a trial or summary judgment at federal district court. the fed judge will likely "encourage" the parties to negotiate their own remedy rather than order treasury to write a check
ROLG,
Assuming we win on APA claim, what’s your expected time-fame on a suitable capital raise that entails settling with pfds by conversion to commons? In other words, can you envision us winning on APA but pfds languishing?
my guess is that the junior preferred will still trade at a substantial discount to par until a common stock financing is teed up...since I expect a financing will want to eliminate the currently existing high cost preferred in order to set up the possibility for common dividends. when that will be is very hard to predict.
I highly doubt SCOTUS grants relief outright, that being said it was very encouraging to even hear the liberal judges refer to this as nationalization. This one will be close
Here is my point. While SCOTUS may simply affirm the 5th C, I wonder if SCOTUS, in articulating the Conservator's duty, goes one step beyond the 5th C to make clear that not only did the plaintiffs make a plausible showing that the NWS doesnt satisfy this duty, but that the government has a high hurdle in showing why depleting the GSEs' capital to zero is consistent with the Conservator's duty. So yes, while I dont see SCOTUS granting remedy (that would be for the District Court on remand), I wonder whether SCOTUS makes clear in articulating the legal standard that the NWS is inimical to the Conservator's duty...which makes the federal judge's job on remand a much simpler exercise.
Just listened to scotus audio again. Why do you suppose that no reference was made by plaintiff to the Treasury entering into the third amendment knowing that (a) gses were about to become profitable, and (b) the intent of sweep was to ensure they couldn’t exit c-ship? The opportune time to have made that point was when plaintiff made the point that Treasury threw the GSEs a life line.
Secondly, do you have reason to believe that scotus is aware of (a) and (b), and do you think they are aware that (c) forensic accounting shows that the entire c-ship was unnecessary?
all of that was in the plaintiff's briefs
Best guess. Closer to 1 or 8 weeks?
🤷
Great info as always.
Thomas asked SG to explain what would make a "direct claim?"
SG replied that..."voting rights" would cause a direct claim...? did the SG slip? Did he forget that the SPSA agreement along with dividends plaintiff was also deprived of voting rights?
Seemed to me that 3rd amendment will be deemed void ab-initio by a majority, I think a larger majority perhaps all will agree that APA allows shareholders aggrieved by administrative action to bring Direct Claims. I wonder if you could handicap the odds or valuation of the warrants if your guess on outcome is correct? Since common is trading at about 1% of what FNMA would be trading at with current share count at 15x earnings. It seems that the market is discounting 99-1 the possibility of warrants retaining full value. I imaging it is closer to between 10 or 20 to 1 based on how the questions before SCOTUS to SG Moopann were much tougher than to shareholder council who was mostly asked about remedy.
Thank you for your efforts in providing us information and your take on things. It is very much appreciated.
Nice work. I think the plaintiff's argument was that the carry out of the NWS is done by an unconstitutionally structured agency thus the plaintiff should get relief.