So everyone is jawing about whether a settlement is in the air between the administration and the investors in Fannie Mae and Freddie Mac.

The latest round of discussion comes after the White House requested access to documents filed in the Fairholme vs U.S. case by defendants, and after a couple of research notes from Rafferty Capital’s Dick Bove, vice president of equity research, suggesting a putting green pow-wow between the President and a lawyer from the firm representing Perry Capital meant, yes, talks are on.

Bove, unafraid to go out on a limb, believes there’s increasing pressure for a negotiated settlement, and put together a suggestive timeline.

Pressure continues to build for a negotiated settlement. Retired Judge Myron Steele files suit in Delaware. President Obama golfs with Ron Kirk, a key hedge fund counsel. Judge Myron Steele was Chief Justice of the Delaware Supreme Court prior to his retirement. He had filed an amicus brief in the Fannie Mae lawsuits making two key claims. The first is that the 3rd Amendment on the company’s senior preferred stock is unenforceable. Second argues that the Amendment breaches Delaware law which explicitly states that preferred shareholders cannot take all the profits of a company leaving nothing for common shareholders.

Judge Steele has now gone one step further. He has filed a lawsuit under his own name in the Delaware court making the same arguments. Since Fannie Mae is a Delaware Corporation, if the courts in that state find for Judge Steele, the game is over for the Treasury. The other lawsuits will be moot since Delaware has claimed that Fannie Mae has broken the law. Todd Sullivan reported in Value Plays that President Obama played golf with ex-President Clinton and lawyer Ron Kirk a couple of weeks ago. Mr. Sullivan also published a photo of the threesome on the golf course.

Ron Kirk was mayor of Dallas and a special trade representative appointed by President Obama. Mr. Kirk now works for Gibson, Dunn, and Crutcher Perry Capital’s law firm. Perry is suing the FHFA and the Treasury seeking the redress of the Fannie Mae Third Amendment.

Mr. Kirk also had dinner with the President as one of a group of eight people including ex-Attorney General Eric Holder. Six days following the golf outing, the White House filed suit to get the Discovery documents in the Lamberth Appeal case. The timing may be a coincidence or it may suggest that the White House could possibly lose control of Fannie Mae. If the Delaware courts find that the Treasury has broken the law, then it must pay back all of the excess funds that it has taken from Fannie Mae.

Also, if the courts find against the FHFA and the Treasury, the President could possibly lose the right to make a unilateral decision as to how Fannie Mae should be run. The advisors might be telling him this. 

If so, negotiations to solve the Fannie Mae issue may be near.

What’s said on the golf course usually stays on the golf course, but Wall Street Journal reporter Joe Light simply asked Kirk point blank if he discussed the GSE lawsuits with the President.

Kirk is the former mayor of Dallas, I’ve dealt with him, and he’s not a disingenuous man. But on the other hand, this is the least transparent administration in history, and the first rule of back-room talks are that you don’t talk about back-room talks, so there’s that. 

So, I can believe they didn’t talk about it.

But what I have trouble digesting is Kirk saying he didn’t even know one of the funds suing one of the largest financial services companies [*in conservatorship] is a client.

Lawyers can be disengaged, but not that disengaged. So that add-on should make you a little skeptical.

Back to why the White House is digging into the case, Bill Maloni offers some pretty reasonable scenarios that amount to: It could be something, could be nothing.

Why the WH sought this info remains an outstanding question and there have no official explanations, just a lot of guesses and hopes (mainly by plaintiff interests that the action reflects some pending maneuver by the government to reach an accommodation).

I’ve heard many of the guesses, i.e. the WH always gets involved when the president’s name is mentioned; probably didn’t realize how much Treasury and DoJ screwed up and the WH might need to bail the Admin out; WH needs to know what’s been said before it seeks accommodation; appeals court suggested the WH consider arbitration, which requires understanding the messy legal terrain agencies created: this is SOP at some point in any judicial hearing involving the federal government.

Wall Street Journal blogger John Carney seems to think it’s a whole bag of nothing, but then he’s been resolutely on the not-going-to-happen side from the get-go in this.

So why has the White House Counsel become involved? Simple: It is standard practice for White House lawyers to review information in litigation that references the White House, a White House spokesperson told The Wall Street Journal. But because of the protective order in this case, the government was required to ask the court’s permission to share information with the White House, the spokesperson said.

The government has scored victories at almost every turn in the Fannie-Freddie litigation, giving it little motivation to seek a truce now. This recent rally appears to be based on nothing more than wishful thinking.

Short version —

But then there’s this —

Bove and Carney have staked out pretty hard ground. Time will tell which of them ends up looking like this.