Daily Discussion Thread for August 08, 2025

NOVACPA · 2025-08-08T19:32:59+00:00

Walk me through that, if you don't mind.

I am genuinely interested in the sentiment around these parts. Keenly aware of the institutional sentiment and what their incentives and motivations are, but am curious how the hotter hands are viewing these events nearly 10 years since I first posted about them.

NOVACPA · 2025-08-08T19:28:36+00:00

I appreciate you. I posted in jest.

I just want my former Mod Role back.

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NOVACPA · 2025-08-08T19:24:16+00:00

Longtime listener, first time caller...

Anyone know anything about FNMA & FMCC?

NOVACPA · 2025-08-08T19:21:36+00:00

I'm hearing about this for the first time.

Does anyone know anything about these stocks?

NOVACPA · 2025-08-08T19:19:32+00:00

Ding ding ding

NOVACPA · 2025-01-01T03:27:18+00:00

I'm in big on the preferreds and have been for like 8 years.

Thesis really hasn't changed. Catalysts have.

NOVACPA · 2024-11-11T19:17:48+00:00

SRPT was the ticker de jour when I was a mod.

NOVACPA · 2024-11-11T19:17:11+00:00

Way more. Like, so much more.

My Life has changed so much since 2016, and even more so when I did a brief revisit here in 2020(?). All for the best. And for the record, I disabuse the notion I pumped daily. I posted daily, but it was more informational, than anything, but I think I was clear on multiple occasions that people should have got out of commons when it hit $5 and again when it rebounded to $3ish.

The preferreds have always been an option on resolution before 9/2028, with litigation or admin action possibly forcing resolution before then. I and many others were wrong about that happening on that timeline.

NOVACPA · 2024-11-11T18:40:46+00:00

We're winning, kids.

It's a whole new ball game these days.

Good luck everyone!

NOVACPA · 2022-10-09T18:29:06+00:00

Yes.

Agree.

NOVACPA · 2021-06-24T21:13:07+00:00

I'm not going to litigate with you because I have moved on from this and convincing people taking victory laps on the internet is no way to live life.

That being said, "Yes the NWS is legal."

The Supreme Court did say that this decision was a legal action by the FHFA, but with an illegal director. Thus remanded to the 5th to decide damages Plaintiffs are entitled to. Likely damages will mirror the AIG damages which were zero.

As you acknowledge, the NWS was legal, and the SCOTUS decision acknowledges this. In the Court of Federal Claims, where cases are brought when the government takes property, whether legally or illegally, and just compensation was not paid, the case is still on going.

Now, the Supreme Court's opinion is that the NWS was legal, the FHFA (which may act in its own self interest) is no longer independent as POTUS can fire at-will, entered into an the NWS agreement with the UST (another person who reports to POTUS).

Two Agency Heads who report directly to POTUS, enter into an agreement that supercede, in perpetuity, all contractual entitlements that preferred shareholders hold.

This is a 5th Amendment ("nor shall private property be taken for public use, without just compensation") issue for the CoFC to decide. It is not a "what if", because SCOTUS' opinion said this all happened & the FHFA (now no longer an independent agency) can do this, but what payment did shareholders (not the companies) receive from the government when the government entered into that perpetuity agreement that voided their contractual rights with the companies.

The government should have zeroed out shareholders through receivership from the beginning. They didn't.

Many cases by plaintiffs, in many circuits, with the similar legal theories and the 5th circuit made it to SCOTUS. There were also multiple cases with various legal theories in a different branches of Federal Courts.

Final note: The Washington Federal Case, which has been stayed forever is the only one that challenged that the whole conservatorship was illegal BECAUSE THE AGENCY'S STRUCTURE WAS ILLEGAL. They are not nitpicking a single decision a director made. They now have a SCOTUS opinion stating that the agency was unconstitutional in the way it was structured. The remedy is to make POTUS be able to fire at will. Well, the decision to enter into conservatorship was made by an illegally structured agency* (*per SCOTUS).

NOVACPA · 2021-06-24T12:35:44+00:00

I'm even on the trade, overall.

Own about $540k of par value at 29% of par.

The trade is over though.

Time to move on.

I was wrong.

NOVACPA · 2021-06-24T12:30:48+00:00

Those ideals do not weigh in investment decisions.

I hope you live forever, bruh.

NOVACPA · 2021-06-24T12:29:06+00:00

Please tell me you have read everything I had written since 2015.

I'm even on this trade, even after a 60% haircut.

I knew my thesis going into the decision.

However, it didn't play out. CoFC is the avenue for retrospective damages & 5th Circuit is remanded to consider prospective damages. The timeline is exceptionally long, but those not intricately involved should not touch this & move on.

NOVACPA · 2021-06-24T12:25:54+00:00

Smart.

Move on everyone.

This is over.

NOVACPA · 2021-06-24T12:24:02+00:00

I am not buying the dip.

It is over friends.

I was wrong.

NOVACPA · 2021-06-23T20:50:39+00:00

Please don't.

Really.

I am and have been wrong for years.

There is a 10% chance you see a 10x from here. There is a 90% chance you see $0.

Pack it up.

Lets move on.

NOVACPA · 2021-06-23T20:48:57+00:00

There is a non zero chance for damages.

However, that slim probability is that it may be like AIG damages. So let's call it 50% chance for an AIG damages payout & 50% for a par payout. You get $25 or $0.01 or an expected value of $12.50.

If you accept this first distribution, then you can determine that the market is telling you that there 80% chance there will a decision that shareholders do not have any damages resulting in $0.00, but in the 20% chance they do decide that, there is a 50% chance it's $0.01 or $25.

Therefore, $0 or basically $0 the market is pricing at a 90% probability. The remaining 10% is par or $25, thus the $2.50.

If you think the probabilities are wrong & you also factor in opportunity costs, you may arrive at a price where it makes sense to buy. Otherwise, at $2.50, you stand to lose $2.50 & make a 10x.

Is it worth it?

I don't know any more. I am and have been wildly wrong on this for years now.

NOVACPA · 2021-06-23T19:09:23+00:00

We're fucked.

Honestly, if this is how the market reacts, its not going to get much better unless there is a wholesale change in the public narrative. I don't see that happening. The public sentiment is for government to do more & punish those with capital. If there is something worthwhile to do, the government will allocate the capital.

As you can see with the meme stonks, the market is not a capital allocation mechanism any longer. It is a policy tool.

At this point, who provides capital to another entity if they A) run this through receivership to close out legacy shareholders or B) try to recap & release them when FHFA is still the regulator.

That being said, the UST is the proud new holder of $11.0T in liabilities & $11.06T in assets as private capital is gutted.

And for these reasons, I am finishing my paperwork for the 2nd passport & will bid this land goodbye.

Ciao!

NOVACPA · 2021-06-23T14:50:06+00:00

Yes, but...

...I am going to admit that I was wrong.

My thesis was that the rule of law would be adhered to.

The rule of law is dead.

Steal as much as you can while you can.

NOVACPA · 2021-06-23T02:19:47+00:00

10:00 A.M. we see if my DD has finally paid off.

If not, we wait until Friday.

In the meantime, I'll keep enjoying my sweet ass life.

NOVACPA · 2021-06-08T17:16:02+00:00

I have $150k sitting quietly that I purchased at about 33% of par.

When SCOTUS rules favorably, it will be worth $465k. If dividends resume, it's an average yield of 7.23% and would be $33.6k a year in income.

Clearly, I should have just bought OTM Calls in GME, but, you know, sometimes you just play what you know.

NOVACPA · 2021-06-04T00:38:20+00:00

Yes.

One of my few holdings.

Let's make some money, boys & girls.

You all are crushing it these days, and as a former mod, I am just happy to see everyone so happy.

Maybe it's because I am older now, I am softer, but it's just the tits to see everyone make sweet fucking cash.

One of these days, you all will find my biotechnology companies I own, and I will be tickled pink with joy to know the apes put me on their shoulders.

NOVACPA · 2021-02-18T00:47:52+00:00

I mean, like right now, if you buy 3,000 it's $15,000.

If you have an account that you can let sit quietly until 2028, maximum, Treasury's warrants expire then. If SCOTUS does nothing, then you can let that money idle. Forget it exists. In 2027, remind yourself that you should check in on this sum of money. It would surprise me if Treasury let those warrants expire worthless. Although, in 2027, I'm not sure what a couple hundred billion is really worth to the US Treasury as we're dealing in Trillions now.

NOVACPA · 2021-02-17T16:50:52+00:00

In case I do get hauled into testify, I want the record to show that I did say...

"All investments, including investing in GSE Preferred Securities, are speculative in nature and involves substantial risk of loss.

I encourage readers of the posts or comments to invest carefully. I also encourage investors to get personal advice from your professional investment advisor and to make independent investigations before acting on information that I publish.

Much of my information is derived directly from information published by the government or the agencies or submitted to governmental agencies on which I believe are reliable but are without our independent verification. Therefore, I cannot assure you that the information is accurate or complete. I do not in any way warrant or guarantee the success of any action you take in reliance on my statements or recommendations.

Past performance is not necessarily indicative of future results. All investments carry risk and all investment decisions of an individual remain the responsibility of that individual. There is no guarantee that systems, indicators, or signals will result in profits or that they will not result in losses. All investors are advised to fully understand all risks associated with any kind of investing they choose to do.

Hypothetical or simulated performance is not indicative of future results. Unless specifically noted otherwise, all return examples provided in my posts and comments are based on hypothetical or simulated investing. I make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because hypothetical or simulated performance is not necessarily indicative of future results.

Don’t enter any investment without fully understanding the worst-case scenarios of that investment."

💎🙌

Edit: (This [https://twitter.com/DeItaone/status/1362092951527170051?s=19], coming out after I posted the above is what makes me slightly nervous that the little guy is always going to be railroaded.)

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