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"GOV can do that say the full LP is due as an obligation"
Then it's not a liquidation preference. The LP should only matter or become due if the GSEs are being liquidated, which I find highly unlikely. The SPS LP would have the highest priority and be paid first from the liquidated equity.
The REAL problem is the dividends based on the LP amount, which could result in a sweep of all or a vast majority of the future income. It will be the greatest return on investment in the history of investments. Nationalization without ownership. The gift that keeps on giving.
Hi. It looks like JPM Chase has just stopped allowing clients to buy FNMA/FMCC. I know Robinhood and Vanguard did that a couple years ago. These bans add downward pressure to the stocks. Does anyone know what causes these decisions?
Also, thanks to everyone sharing information and views and also those people doing something to spread awareness of FNMA/FMCC- Navycmdr, Guido, Bradford, Ace Trader, KThompson, Wise Man, etc.. The information and open debate is really helpful. I have a couple other questions if anyone on the board has answers -
1. At what point do short traders have to put aside money to pay their share of the Lamberth ruling? FNMA already put it on their annual report, but I wonder if/when others have to do it and how much it would be.
2. What happens if the government is found to have actually nationalized FnF? Wouldn't the $8 trillion FnF debt have to show up on the federal debt and cause the US gov credit rating to go down and interest rates to go up? Are fed bondholders also getting a raw deal by having this debt kept off the fed books?
Thanks again.
Agree with what you say.
And nothing that we have seen says that, it will change. GS will continue to control the govt froom 24 to 28 too.. GS and the govt problems are much biggerf than GSE.. So if someone continues to think that Trump will realize the wrong hire from last time and fix it this time, its just a hope-aid.. No one knows
GS is too powerful and can do anything.. If GS can do a sizeable donation to Trump during election campaign, he can very well be aligned.. Given his financial troubls, its very easy to buy his silence next 4 years (if he is elected)
FANATICAL
if you disagree with a certain philosophy - you are a communist - idiot - hit and run - duplicate - brainwashed
My sense is the same arguments and attitudes go on in CONGRESS and that is one of the reasons they do nothing about F and F
Are they worse then BIG AG - BIG OIL - BIG TECH
I would argue we have way too much power in way too few companies -- in key industries - and that includes the TBTF banks - but I would not single them out from the rest of the GRIP that with the SCOTUS decision on election funding is hurting our democracy big time
Where is Teddy R when we need him
The GOV can make EXPLICIT gurantees by making us a privately held but regulated utility
Then the GOV can make the same offer (with all instructions - requirements - restrictions) to the TBTF banks who would never say yes
Win Win
I thought the NWS took EARNINGS - PROFIT as made
I do not remember it going back and for example killing common and JPS - which also are equity ?
The actions could not kill SP without killing JPS and common --- at least I do not think so
officially ends the Financial Crisis
hhmm- COVID was in between then and now
what financial crisis is there to finish
Did you read the report that DJT endorsed as his policy?
I provided parts online and the link
That is not an order to free F and F
To believe that DJT said free them and Mnuchin (for his secret reasons) was able to stall
Describe say 3 other such cases of DJT said I want and was stopped by his own cabinet (USA issues not foreign issues)
that is an argument I like but something very similar to that has lost in court
I just do math and simply said two things at once - both correct IMO
1. GOV can SAY and act to kill the SP obligation - measured by the LP value -- in return for 300B sent to them . They simply do it and to me it is fair as a tax payer
2. GOV can invoke GAAP and say all of that is dividend and none is principal. It sucks and we are being robbed and we are being treated worse then any other company "they helped". But per HERA and agreements agreed to and GAAP ---- GOV can do that say the full LP is due as an obligation and we are in court for another 15 years
#2 is not fair and is not what I advocate. I do think its fair to say they would have a case to argue in court for years
Sherrod Brown is nothing but a blowhard speaking with forked tongue. In other words, the typical politician!
Just saying I am wrong without backing it up is a hit-and-run. You appear to be a government stooge.
Just to confirm if you held the FNF JPS and Freddie commons, up to the jury verdict date you are locked in for the awards? And going forward if you buy more Fre commons or FNF JPS, those shares will not be a part of the reward pool?
The government has been OVERPAID. It has ZERO EQUITY in the corporations.
You say I am wrong but can't back your position. The government has been OVERPAID. It has ZERO EQUITY in the corporations.
I have held common shares since before conservatorship. Bought my preferreds after. If you are with KT and Bradford trying to give 95% of the corporations to the government, we're not on the same boat.
Great if she goes
But who will be Fhfa replacement?
Maybe no one because election is coming
And who will confirm another dem head?
I feel sorry for the other agency
lol
That’s how it should work
But Amerrika’s problem is
The Goldman and other tbtf banksters are in control and above all government authorities now
This is why no one questions them or treasury
They do whatever they want
What happened to jfk
Goober, why are you so bitter and hostile? Chances are Ive been a holder longer than 90% of the people here. I just dont post as much nowadays. Relax, friend. We are all on the same boat.
Just saying I am wrong without backing it up is a hit-and-run. You appear to be a government stooge.
The government has already taken out all the equity it invested in FnF (and more). It has zero equity left. Whatever equity remains in the corporations belongs to the junior preferreds and commons.
Just to confirm if you held the FNF JPS and Freddie commons, up to the jury verdict date you are locked in for the awards? And going forward if you buy more Fre commons or FNF JPS, those shares will not be a part of the reward pool? I am a buyer as I believe the true reward will be at the Recap and Release ending.
Net Worth is a value. The NWS sweeps all the value ($$) from the GSEs. That includes what gives equity its value. The equity structure does not change. It just means the equity have no value presently.
My backup is my knowledge. I am not going to look up references as I am at my lunch break. I did not expect this to be an argument. If you believe the NWS modifies the equity structure, then thats up to you. Good luck
The TBTF Banks wanted the GSE to fail because that will cover up the bad loans they made which triggered the Financial Crisis. Luckily, like Maiden Lane I, II, and III, the GSE MBS ended up not losing money. AIG had to sell/spinoff their MBS/CDOs but GSE could hold because of being GSEs and eventually benefited from the turn around.
The TBTF banks only wants the FnF book of business if the gov continues to implicitly guarantee them thus giving them GSE attributes. The gov can never do that directly without backlash.
What does net worth mean? What does equity mean?
https://www.investopedia.com/terms/n/networth.asp
https://www.freshbooks.com/hub/accounting/equity-accounting
I repeat: "When the government Net Worth Swept, it also swept out it's own equity out of the corporations.
Treasury equity = $0.
SPS = $0."
What exactly are your arguments to back your position?
Chances are if Trump wants the GSEs released, they will be released. But, he does have advisors and some advisors may have a different viewpoint. My opinion is if Trump wants to be the man who ends the C-ship and the man who officially ends the Financial Crisis Era, he may do it. He can add that to his resume along with Space Force. Space Force has to be one of the most important entities established in modern history and the Dems mocked it when Trump first announced it. Lets see what happens.
The NWS only takes the dollar amount of the company up to its net worth. It does not modify the equity or debt structures.
What Fannie Mae and Freddie Mac insiders don't want you
to know - Both are on launch pad and ready for Lift-Off
I wouldn't trust Mnuchin as far as I could throw him . . .and I have no arms.
Same as Watt . . . filling a chair behind a desk. Of course, she needs a much wider chair than the narrow Watt.
"Never gonna happen."
There you go again trying to be some kind of a prophet! Never??
Every time I hear someone say what will or will not happen that's a red flag! I think you are a con artist pushing the theft.
You see what you want to see
Tough to argue or convince
That's fine. It's past history..
I hope they don't make it temporary and ask her to lead both. In that case our brandfordamus hope of GSE reform in this term will be officially dead
She can go. It's not like, she is doing anything useful here. We won't miss a beat
Mnuchin had no intentions of releasing the GSEs, in my opinion, because it was known that the TBTFs wanted the GSEs to fail so they could get the books of business. Trump, in his letter to Paul said he wanted them released. He delegates authority.. He expects his wishes executed and moves on to another topic. Mnuchin made it look as if he was doing something, albeit slowly, and, essentially, wasted four years. I think it was a stall tactic to keep the TBTFs' wishes alive. We all know they could have successfully released during that time of Trump's term. If Trump was at fault, it was for not looking back and making sure Mnuchin did what he wanted.
Cark Ichan suggested Mnuchin to Trump. I think he did so to help him (Ichan) get the government's hands off the GSEs so he could make another fortune. He held some $50M in GSEs at the time at enormously suppressed share prices. Mnuchin screwed Icahn over as well.
THIS NOT A POLITICAL POST. SANDRA THOMPSON IS FANNIE MAE REGULATOR & CONSERVATOR. PLEASE DON'T DELETE.
Director Thompson is listed as #1: https://t.co/ODdMvEQsN1 https://t.co/hdxVnox4gy
— Vern McKinley (@VernMcKinley) May 21, 2024
Or the other side of the argument is
They were able to convince why it's not a good idea and he got convinced..
There is no way they violated a code red order
When the government Net Worth Swept, it also swept out it's own equity out of the corporations.
Treasury equity = $0.
SPS = $0
But at the end of the day, if the president says I need this released. Do you think they would not have worked on it?
Look at it objectively without an excuse hat, R- hat, Trump hat. Just purely based on facts
In your company if your CEO says, this is what I want, do you think it happens or not?
Shhhhhhhhh! Shush! Shutty! Do not let the cat out of the bag of the real massive differences between AIG and the twins, their functions, their actual businesses and actions - how they acted in the markets - during and the run up to the financial crisis... there's more on this but no more loose lips
So -- pages 28-31 OUT of CONTEXT - are the discussion most pertinent to future exit
When one reads this - these pages -- one can see IMO why there was no freedom during the DJT administration
And if JOE were to ask for a study and recommendations ---- these pages would read 95% the same and thus again no action
The policy did not - I repeat did not - do any math or analysis on should the GOV forgive - eliminate the LP obligation or Convert that amount (about $200B) to common stock. That is my memory. Those who decide to read it now - please let us all know if there are key ideas or paragraphs outside 28-31 for policy/action
Note - i read elimination of the Senior .... shares --- as flat out - call them paid off (I think other pages talk to making the GOV whole -- but again are not defined at all ---- and IMO (surprise but I have said it 100 times) --- with 300B going to GOV and $200B going to F and F ---- that is enough to eliminate without another dime --- ALL IMO (as dividends over 15 years needs to be viewed as part of making GOV square)
One of the five options to capital issues - in this DJT administration policy that was adopted
Placing the GSE in receivership, to the extent permitted by law, to facilitate a
restructuring of the capital structure
Here is the key two paragraphs of DJT TREASURY FHFA POLICY
(bold is me)
As described above, each GSE should remain in conservatorship until it has retained or raised
sufficient capital or other loss-absorbing capacity to operate in a safe and sound manner.
Potential approaches to recapitalizing a GSE could entail one or more of the following, among
other options:
? Eliminating all or a portion of the liquidation preference of Treasury’s senior preferred
shares or exchanging all or a portion of that interest for common stock or other interests
in the GSE;
Way back then - I read a lot of this report and it was not clear to me which of "Eliminating" v "Converting to common" was preferred
I recall something about receivership and will look for it -- likely on next page
A wiser person would understand that there is no Charter Act for the existence of AIG as a private entity. And that Treasury made a $5B return on their $69.8B AIG common & preferred stock investment. At no point did the Treasury implement a solution that reaped at 100-200% return on their stock investment, which is what would happen if Treasury pulls another $200-300B out of the GSEs after already receiving $300B in dividends and NWS.
Geeeez Rodney5! The law, what stinking law. LOL!
Re DJT instruction to free or fix or resolve the Conservatorship
That became a study that then issued this report and a PR
I encourage people read it (and find the one for BO and explain the differences)
This report - the outcome of the DJT instruction became DJT - TREASURY and FHFA policy
https://home.treasury.gov/system/files/136/Treasury-Housing-Finance-Reform-Plan.pdf
(I will find the critical pages and be back)
Donotunderstand said: "The GOV has called them equity and the money "sent" to F and F is called an investment not a loan"
It does not matter if the SPS is called equity or not. READ THE LAW
It’s bad faith and unfair dealing when the Regulator is authorized to pay down the Senior Preferred Stock and sent the Net Worth without the pay down option. The FHFA Director doesn’t need the Treasury approval to pay down the Senior Preferred Stock the Director has the authority from Congress written in HERA:
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
RESTRICTION ON CAPITAL DISTRIBUTIONS.— page 2731
‘‘(1) IN GENERAL.—A regulated entity shall make no capital distribution if, after making the distribution, the regulated entity would be undercapitalized. The exception.
Quote: “Page 2732
EXCEPTION.—Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition— ‘‘(A) is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and ‘‘(B) will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.’’.
NOTE: REPURCHASE, REDEEM, RETIRE...
WILL REDUCE THE FINANCIAL OBLIGATIONS OF THE REGULATED ENTITY.
Link: https://www.congress.gov/110/plaws/publ289/PLAW-110publ289.pdf
In essence allows the trustees of Fannie and Freddie to go to the market at any time to raise new capital, including new capital with lower dividend coupons, to buy back the Treasury’s senior preferred. Any loyal conservator of Fannie and Freddie would take advantage of this refinancing option to end the bailout arrangement, by paying off the senior preferred in full. The Treasury did not take a Perpetual Equity Investment in the enterprises, the Treasury stated a temporary investment period!
The calculation of the pay down of the liquidation preference of the Senior Preferred Stock, I am asking this committee to apply the law written in the HERA legislation passed by Congress.
https://drive.google.com/file/d/15978NWfDcTtuClMBnwgWFmoPnwK94vWn/view
The liquidation preference has been paid and the Senior Preferred Stock should be canceled.
The law actually exists! FHFA and its Director are executive branch entities. They cannot make changes to federal laws. Only Congress can change the law.
Therefore, the U.S. Congress did not give DeMarco the power to take all the future profits of their wards in conservatorship into perpetuity, thus Nationalizing the GSES, based on an Incidental Power in HERA: The Net Worth Sweep.
The U.S. Congress would have given the FHFA more explicit instructions to do so than merely drafting in the HERA to do whatever it feels is in its best interests. DeMarco, this non-elected bureaucrat, has been allowed to steal the companies for the Treasury.
The SCOTUS upholding the NWS does not change the fact the liquidation preference can be paid down, and the Senior Preferred Stock redeemed under the terms of the law of HERA. The money kept by the Treasury by the NWS should be applied to principle and 10% interest and over payment should be returned to the companies. $301 billion is more than enough to pay the liquidation preference and redeem the Senior Preferred Stock.
These conservatorships have shown, at least to shareholders, what a JOKE our entire government has become. I'm not even confident now that justice can be achieved.
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