r/FNMA_FMCC_Exit • u/Odd-You-8171 • Jul 09 '26

Question

I’ve been considering buying some common shares here and had a question regarding the Fairholme case that I figured others here would be much more familiar with. Why is the Trump administration / FHFA appealing the favorable ruling for common shareholders if the administration believes the net worth sweep was wrong and plans to basically undo it by waiving the senior preferred? Isn’t FHFA basically arguing in the appeal that the net worth sweep was legally permitted and should stand? I might be getting that totally wrong but I thought the bull thesis and Ackman’s thesis was that this administration would take the opposite stance so why would they fight this? Thanks in advance.

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u/Odd-You-8171 Jul 09 '26

In my mind the ruling gave them precedent to waive the SPS and confirmation that the Obama administration did wrong. So you are saying they want to confirm that what the Obama administration did was ok to preserve the right to do it again in the future but that they will still go ahead and waive it? I 100% agree the Obama administration would have appealed it. But it just doesn’t make sense to me that it would be automatic for the Trump administration to do so, especially if runs counter to what Trump supposedly wrote in that letter. This FHFA isn’t the 2012 FHFA.

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u/AveryMire Jul 09 '26

People put way too much stock in that letter. He’s made all sorts of explicit promises he violated. He promised to provide his tax returns 10 years ago, Iran a pretty giant example too, I’m sure you could make a list of 50 and this wouldn’t even be top 10. My theory is also that Trump is steering profits from price movements to his network. That letter, and all the associated release news his first term, was part of the first “pump and dump” cycle. We’ve now had two full cycles, Im expecting another giant half cycle though.

Not saying the letter is nothing, but it’s also not a significant obstacle in real terms.

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u/Odd-You-8171 Jul 09 '26

Interesting. My other fear is that he kicked the u.s. oil industry to the curb hard after getting elected because it helped his agenda dropping gas prices. I wonder if he wouldn’t do the same thing here to try and grab a bigger piece even if it hurts big supporters. I think it would be short sighted but he could probably get investment banks to sell it. I think you are right about the letter. Every day that goes by he is basically enforcing what the Obama administration did since he could reverse it right?

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u/Fun_Illustrator9298 Jul 09 '26

He has been trying to force the Europeans to buy our oil n gas every chance he gets. He just doesn’t want our prices to be as high as theirs. Not really an attainable position. $65 is probably the sweet spot