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"dilution is not illegal.. neither is reverse splitting to meet exchange requirements both of these will happen as part of raising and attracting new capital"
Dilution is illegal if it is forced on the companies by the Conservator based on pre-mediated plans to harm existing investors and benefit the cronies.
Conservator Calabria had already pre-announced about dilution and as a follow up, set the capital requirements too high.
Already FHFA has its cupboards overflowing with skeletons. It does not take much effort to prove the pre-mediated plans to harm existing investors and benefit the cronies.
"Commons cancel , you never post anything of Real value... maybe find another stock, Fnma shareholder."
But he is getting paid. Not sure whether he is doing good job for his employer.
"Commons cancel , you never post anything of Real value... maybe find another stock, Fnma shareholder."
But he is getting paid. Not sure whether he is doing good job for his employer.
"FnF are depressed stocks because of lawless conservatorship. Once FnF are out of conservatorship, the prices will go up even on OTC."
The biggest challenge to re-capitalization of FnF, is the lawless FHFA conservatorship.
Lawless FHFA conservatorship is the main reason why capital rich FnF (about $100B) became zero net worth companies. If FnF were to continue without lawless conservatorship, then by this time FnF would have accumulated additional $150B to $200B additional capital.
"Any one who talks about reverse split,shows their intellectual level right away... LOL This is in OTC not because of Balance sheet morons, but because of Conservatorship.."
100% Correct. Reverse split is done to reflect the realistic price of stock and also to meet exchange requirements of already listed stock.
FnF are depressed stocks because of lawless conservatorship. Once FnF are out of conservatorship, the prices will go up even on OTC.
"FNMA can't uplist without a Reverse Split."
How does it help.
"Conclusion: $150B - $170B range reasonable, $240B range not"
Sums up everything about Calabria style:
• Driven primarily by technocratic policy, secondarily by politics
" Mnuchin said he still prefers crts."
FnF are paying money for CRTs without any benefit.
"The Supreme Court has recognized two limited exceptions to the president’s otherwise unlimited removal power.
First, Roberts noted, in Humphrey’s Executor the justices acknowledged that Congress could create for-cause removal protections for “a multimember body of experts, balanced along partisan lines, that performed legislative and judicial functions and was said not to exercise any executive power.”
Second, in two subsequent cases, the Supreme Court upheld exceptions for so-called “inferior” officers, who have limited duties and lack policymaking or administrative authority, such as an independent counsel."
HERA/FHFA do not conform to these two limited exceptions.
1. FHFA has single member head of agency not balanced by party lines
2. FHFA mainly exercises executive power as a regulatory agency, as a conservator and as a receiver. BTW OFHEO was a executive agency under HUD, and FHFA replaced it.
3. FHFA Director is not inferior officer and has very broad authorities.
HERA does not have severability clause. If any part of the HERA is struck down as unconstitutional, the rest of the law will not survive.
"6) All cases that lack standing because of HERA 4617 certainly have merit and no longer can be dismissed because of 4617(f)"
Irrespective whether FHFA is independent or not, 4617(f) is unconstitutional.
The main thing missing is oversight/review from all the three branches of Gov and denying constitutional rights of citizens.
"Can HERA remain on the books without an independent FHFA?"
All these independent agencies are fundamentally based on the naive (or more appropriately devious) principle of avoidance of political influence from Congress as well as Executive branch. But the main reason for independent agencies, is to weaken the authority of POTUS .
Can an agency headed by single Director removable at will by POTUS be independent? Can FHFA conservatorship still continue as a agency under the protection of 4617(f)?
HERA and Dodd–Frank Consumer Protection Act are fundamentally different because CFPB acts only as a regulator and never as a conservator. Only similarity is, headed by single director.
HERA is completely sinister and unconstitutional. HERA violates constitutional principles of separation of powers, and checks and balances.
HERA vests executive, legislative, and judicial powers in a single FHFA director with no accountability. HERA allows FHFA to violate laws and also provides immunity to others to violate laws.
The best option for SCOTUS is to scrap both HERA and FHFA.
"Calabria can no longer sleep at night worrying about us shareholders because he can be fired at will"
Another question for legal experts.
With "removal at will" ruling, is FHFA still independent agency or part of executive branch like any another executive branch agency?
Does FHFA and FHFA conservator still have 4617(f) protections and the ability to provide immunity to others?
"This response hould be made a available as a feedback to the capital proposal on FHFA website..
Not that it matters to FHFA but for other purposes.."
There are so many insurmountable obstacles to private investment.
1. Gov social mandates like affordable 30 years loans to all.
2. pro-cyclical mandates of unlimited liquidity to markets during crisis
3. Gov and political interference driven by WS Mob and their lobbyists
4. Mafia like FHFA conservatorship and immunity from rule of law
5. Lack of rule of law. Ideologically and politically influenced Judges.
6. Unskilled and inexperienced FHFA Directors and FHFA bureaucrats driven by political ideologies and personal biases.
7. Unreasonable, very risky, and impossible to raise large capital rules.
8. Insufficient ROI to match very risky and large capital
9. History of 12 years of mafia like conservatorship that bankrupted the companies with SPS and NWS robberies.
10. Listing on OTS markets
11. Loose talker Calabria has made it impossible.
One can keep on listing some more. But Anyone of these reasons is enough to stop a private investor even investing small amounts.
"Another interesting tidbit Calabria is open to all suggestions of how to re-capitalize... I sent a thought to Warren May 27 that he should take his 130 billion cash on hand and broker a deal with Calabria for the warrants.... he'd own Fannie 79.9% 5 billion commons completely capitalized lock stock and barrel shares here would go from $2 - $150 in minutes"
Tycoon Warren would want full control of FnF without FHFA and without Calabria.
But Pirate Captain Calabria wants $240B private money but wants to control FnF with Pirate agency FHFA. Only problem is Pirate Captain Calabria does not understand how big is $240B.
"See i don't look at this as me "buying" into "litigation" like some moron judge has decreed i see it as owning shares that convey rights and those rights are perpetual."
Yes. Clearly these judges made rulings based on political ideology.
Hank fomented 2008 crisis with his well orchestrated plans and then used the crisis to create HERA and FHFA as perfect devious tools to carry out mob like operations with impunity.
FnF are private shareholders companies and the Gov conservator of such companies is protected from legislative, executive and judicial oversight. In addition FHFA conservator is protected from the shareholder oversight.
Our so called Honorable(?) judges have never asked Gov a simple question why FHFA conservator needs all these extra constitutional protections and authorities and also against whom. Does Gov conservator ever needs protections from private shareholders?
"Just ruled in the John Bolton book case our man Lamberth did... said stupid things there, too"
Lamberth seems to be a controversial Judge. Always supports the evil side, pretending to be on the side of the law.
"The fact, sadly, is that companies will absolutely shaft common shareholders for their own self interest. I am going through a brutal one with UNTCQ, and it reminds me a lot of FnF's saga. The difference is that the Federal government and their appointed regulator and conservator created an impenetrable barrier for shareholders to shine a light on unfathomable theft of shareholder value."
Another glaring violation of constitutional principles of checks and balances is, entrusting both regulatory and conservatorship authorities with one person FHFA Director. Besides HERA itself violates this principle very frequently.
Surprisingly no one has challenged this constitutional violation. MC compares FHFA and FHFA Director to Bankruptcy Courts and bankruptcy court Judges, but HERA just does stop there. HERA gives legislative, executive and judicial powers to FHFA Director and protects Conservator from Congressional, Executive and Judicial review. FHFA Conservator can, not only violate any laws but also provide immunity to others to violate any laws.
Court should have struck down HERA in toto as unconstitutional, undemocratic and a law that promotes lawlessness.
"Rule of Law Guy suggested they might provide retrospective relief for those who filed cases rather than a blanket remedy — then only Seila gets relief and plaintiffs in our cases get relief. Those guys asked for relief and so does not entail all actions being unwound. Sounds sensible to me..."
It is most unlikely that any individual investors will get anything worthwhile. All the courts and judges in their rulings have proactively promoted the false narratives that FnF needed Gov bailout. This alone is enough reason to deny any relief to individual investors.
Besides bureaucrats have been involved in all pervasive lawlessness in last 12 years that it will be very complex case for courts to understand all the lies and frauds and rule against Gov.
The best hope is FnF will get back all the capital stolen from them.
"So I see him trusting Mnuchin as his right arm in this situation, as he and Trump appear to always be in lock step. Therefore the true power in this matter is coming from the Treasury Secretary, as the President's surrogate. And I see Mnuchin as viewing Calabria as an academic pawn to be used as he pleases."
Not Sure whether SM has any important say in these matters.
All know, MC is definitely not SM's choice for FHFA. SM's choices like Craig Phillips and Joseph Otting are out of administration. After appointment of MC and WH conservatorship policy memo, SM has not said much about FnF. SM did not even appear in recent Senate hearing.
MC is well connected with DC politicians compared to SM. The best guess is Mnuchin is not the key person in conservatorship matters after WH policy memo. May be SM will be out by the end of the year irrespective of Trump gets another term or not.
"As Conservator, Calabria will also make the decision about how to amend the SPSA agreements between companies and Treasury, hence determining everything else anyway
"
LOL, It is the WH that makes all these decision. FHFA is like a mail room. Nothing happens in the mail room.
"FnF will be responsible for the capital raise in anyway they want. Calabria offered a whole slew of methods, none of which will favor JPS"
This has been the official position of FHFA for long time. Even Moelis recommended the same. But KT19 has been in denial stage for long time on not only this point but also other points.
"Calabria totally ignores that
"on their own" the GSEs FIXED THEMSELVES !
You Have DONE ABSOLUTELY NOTHING !!!
also they've operated for 11 YEARS
without "Hundreds of Billions" in reserve
Calabria is a total GOVT SELLOUT !
"
Agree. FHFA and its bureaucrats are a big burdens on FnF and taxpayers. It is the successive Congresses and Administrations that abused FnF with social mandates and used FnF private resources to boost the economy. After using FnF for decades, now these bureaucrats are blaming FnF.
Calabria kept on giving BS ideological speeches against FnF/MBS but now he is mandating FnF to provide forebearance to defaulters.
"OMG !@# - Can you actually handle
Calabria's total garbage he's spewing ?"
One thing positive is, there is no bad mouthing by Calabria and Brown.
The way Calabria talks about ending conservatorship and raising the capital, it is very clear that FHFA and Calabria are not the deciding authority to end the conservatorship. There is no way such a big decision will be made by paper tiger FHFA and its Director Calabria. In the last 12 years FHFA has acted as a proxy for the real power brokers.
Decision will be made by the WH and the timing seems to be problem. Probably FHFA and Calabria will be just facilitators just like a bankruptcy court and the judge.
"Bryndon Fisher - 3:29 PM (3 hours ago)"
excellent progress.
"FHFA Seeks Authority to Charter Fannie/Freddie Competitors"
It is long overdue (almost 12 years) to abolish HERA/FHFA and move FHFA under HUD control. FHFA is a paper tiger with no real authority, no management skills or no expertise but a proxy for abusing the bureaucratic authority.
"They want an IPO of 100 Trillion, with 200 percent of profits paid to the US Treasury, by investors. Then, they want investors to have to pay taxes on the gains that were paid to the treasury."
CM315,
Thanks, What will be the advice of these advisers?
They will charge big fee and tell FHFA and FnF simple truth that every one already knows. It is clear mismanagement of companies by the conservator.
Conservators needs to be highly qualified and experienced people to rehabilitate such extremely large, complex and systemically important companies. But all these FnF conservators have been not only substandard by any criteria but also morally and ethically corrupt.
If FnF do not have enough capital then why would these conservators keep on loading FnF with unlimited risk exposures and at the same time keep on stealing their capital. In addition these mafia conservators want FnF to raise 100s of billions dollars from private investors.
Unfortunately equally substandard judiciary thinks that these kind of conservatorship decisions to steal and bankrupt conservatees are valid and lawful business decisions that can not be challenged. Can judiciary tell the FnF investors, when did stealing became valid business decision?
"yes and it is also true that a huge buffer of capital protects - big time - against poor management
"
Thanks.
"Basel III set standards for what qualifies as capital for Financial Institutions larger than $50 B. Calabria has included bank fortress standards for FnF who are, predominantly, monoline insurers with way lower risk of default or insolvency."
Calabria and his expert advisers think that mono line insurance business is far riskier than multi product business.
But Calabria will not explain why FnF losses were far less than other private FIs in 2008.
Calabria does not understand the basic principles of business risks. Risk does not depend on the type of business but on how that business is managed. Any amount of large capital makes no difference if that business is not managed properly.
If FHFA conservatorship keeps on stealing all the capital of FnF, then how large capital is enough? Even a $100T capital is not enough.
If FnF are asked to provide unlimited liquidity to markets like in 2008 then how large capital is enough? Even a $10T capital is not enough.
Any business needs to be managed based on the available capital and not the other way around. If FnF do not have capital then reduce their risk exposure to match the capital. But FHFA wants to load FnF with unlimited risk exposures and then demand that FnF raise large capital to match the risk.
Currently half knowledged Calabria is the biggest risk for FnF and economy.
"Last I knew the Gov't owns over 79% and Mark says there will be dilution, how much ? that's the question.
"
As of now Gov owns everything through SPS/NWS alone. If SPS/NWS are cancelled then Gov own 80%. Gov can illegally wipe out private shareholders but it can never raise any capital there after.
The big question "smart guy" Calabria has not explained is how he is planning to raise more than $200B with 20% of FnF. Then Gov 80% is worth more than $800B.
"Calabria ~ YOU'RE FIRED !"
Calabria has never managed any company in his life time and never raised a penny for any company. Now Calabria wants to raise $240B capital from private investors for a company with 0 capital, more than $200B SPS liability and 80% owned by Gov, looted by FHFA for 12years under conservatorship.
Some one needs to examine the head of clueless calabria.
"Zandi says, “it seems to me that the best way to accomplish that is precisely what we're doing now, with the [enterprises] in conservatorship.”"
"
It is good thing. Zandi has basically discredited himself with such crazy views.
"So far the webinar is a snoozer - basically they confirmed no divies and exec bonuses until cap buffers are met ... Old JPS will get no divies ..."
This is what you get when bureaucrats start running private companies. There is no way any one is going to invest and capitalize FnF as long as FHFA in charge of FnF.
"I thought I read 300B multiple times in articles about F and F"
In what context?. You mean conservator wants to rob $300B.
"She’s getting pretty pricey sitting over 2 bucks especially since $200 Billion still needed. Tight spot here for hopeful investor. Does a trader use their skills (FNMA) in one of the best trading environments in modern history or sit and twiddle thumbs and hope for some kind of unrealistic miracle here ."
LOL, Best stocks to short if you want to bankrupt yourself.
"and then 300B out to Treasury not 200B"
How did you get number 300B?
"https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Announces-Public-Webinar-on-Re-Proposed-Capital-Rule-for-the-Enterprises.aspx"
The best public comment would be to replace Calabria before making any rules.
"I oppose creating a "better - more attractive" class of shares that are not us
"
With the investment of $140B, so far FHFA/Gov has exacted 80% warrants and more than $200B in Dividends.
If private investors are expected to invest more than $200B, then what will they expect in return. FnF are almost bankrupt and only 20% of FnF are owned by private shareholders.
Calabria and his hired advisors are out of their minds. The irony is FnF pays the salaries of Calabria and his hired advisors. This is what happens when there are unaccountable Gov agencies.
"no conversion AT ALL for Senior Preferred Stock ..."
All along SPS conversion has been not a option.
Besides SPSPA, Administration does not have legal authority to convert SPS or buy any new securities.
" That’s why I’m thinking he’s decided, “I’m going to use the capital standard to reshape Fannie and Freddie the way I think they ought to function, and see if the investment community will accept that.” I don’t think I’d call that a negotiating strategy."
This is consistently arbitrary and capricious rule of FHFA bureaucracy instead of fair rule of law. FHFA has contradicted itself in so many ways, clearly a lawless agency.
One needs to wonder how courts and lawmakers are pretending that they are serving "EQUAL JUSTICE UNDER LAW".