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sorry...MY personal Dollar Cost Average per share. I usually take a couple years of weekly close prices for a particular stock and dump into an excel spreadsheet and graph it to compare trends on dips in the prices, and then do a little DD on the dip ranges to see why they may have dropped....based on that I look for similar down trends to jump in a stock...or run like hell from it.
all stocks have a downward trend at some point...my DCA is still well in the green so I haven't lost a nickel....and we still get the div. I do a lot of trend analysis on stocks for future investing...I started in ARR in Dec of 2013, so got in at a really nice dip...so we shall see what the future holds....I think they will move up again as interest rates rise.
I have been accumulating this stock for quite a while now...love the div and the cost per share. I also have a large position in CIM which has gone way up since I first started accumulating it....I believe as they start to increase rates, the REITS will compensate and hedge for a better return and will move back up in pps. A nice win-win for us.
I hear ya...been in the otc/stinky pinkies for quite a few years...some have been good flips
followers don't interest me...I've been around this company for way too many years...met the past leaders of this scam and know without a doubt they are not concerned with a real company...just trying to scam anyone they can to grab a buck.
yes I am...
what update...most likely new scam will be introduced to suck in more newbies and create a whole new group of bag holders. this company has been a scam from day one
good catch
Newt Gingrich Is Why America Can't Have Nice Things
http://www.huffingtonpost.com/2014/09/16/newt-gingrich-and-julian-castro-housing_n_5832116.html
WASHINGTON -- There's something disconcerting about watching Newt Gingrich take the stage to deliver a policy speech in 2014.
To most Americans, Gingrich is a charming curiosity: His latest stint with public relevancy was a quixotic 2012 presidential bid in which he visited many of the nation's finest zoos and advocated the establishment of lunar colonies.*
But on another level, Gingrich's Tuesday speech on housing before the Bipartisan Policy Center epitomizes the soft corruption of Washington elites at their worst.
As Speaker of the House in 1995, Gingrich opted to shut down the federal government rather than cut a budget deal with President Bill Clinton. He defended Fannie Mae and Freddie Mac in Congress, and after leaving Capitol Hill received more than $1.6 million in consulting fees for Freddie -- during years in which the mortgage giant took on heavy risks that ended with a government rescue. In Tuesday's speech, Gingrich had the audacity to warn about the dangers of too-big-to-fail institutions backed by government guarantees -- and not one person in the auditorium at the Washington Renaissance Hotel dared to cry foul in his presence.
How does such a man become an expert on either bipartisanship or housing? The unfortunate answer is the third silent partner in the contemporary Beltway understanding of bipartisanship: corporate America.
When Washington talking heads discuss "bipartisanship," they often avoid topics about which many Republicans and Democrats in Congress actually agree. You won't hear them extoll the virtues of publicly auditing the Federal Reserve, or of prosecuting bank executives for misconduct that created the financial crisis, for instance. But you will hear plenty of calls for lowering corporate taxes or privatizing public assets.
Gingrich was full of these ideas on Tuesday. After touting French President Francois Hollande's weak approval ratings, the existence of 3-D printed cars, ATMs in multiple languages, cell phones equipped with GPS mapping, Uber and AirBnB, he eventually got down to business: He called for more oil and gas exploration (fracking), lower corporate taxes and turning over the core operations of Fannie Mae and Freddie Mac to the financial sector.
"You want to get as much of this away from politics as you can," said Gingrich, a career politician and political consultant to the mortgage market.
He wasn't alone. Housing and Urban Development Secretary Julian Castro praised a (bipartisan) Senate bill that would feed the fruits of Fannie and Freddie to the nation's largest financial firms.
"A government-dominated market is unsustainable," Castro said. "The bipartisan passage of Johnson-Crapo in the Senate Banking Committee was a huge step forward."
In truth, the problems in the U.S. housing market aren't very complex. But solving them involves holding very big banks accountable for some very bad things. And most so-called bipartisan groups earn their centrist gold stars by aiding big corporations, or at least by leaving them alone when they do wrong.
Wall Street banks broke the housing market, and both Congress and the Obama administration have refused to fix it. Evidence of robosigning -- banks forging signatures and fabricating documents in order to pursue foreclosures -- persisted for years after the government reached multiple big-ticket settlements to eliminate the scourge. "Zombie foreclosures" -- when a bank evicts a borrower but then opts not to actually take ownership of the house, creating huge billing problems for homeowners and local taxes -- have sparked a rash of blighted properties across the nation. There's even a new problem with "robo-testifiers" -- people who masquerade as expert witnesses for banks on foreclosures about which they have no knowledge.
That mess creates a lot of legal uncertainty. Private-sector investors don't want to get tied up with mortgage risk, because they simply don't trust the banks. And young people who used to buy houses can't afford to invest thanks to elevated unemployment and weak wages created by the financial crisis.
But you wouldn't know any of this from the Bipartisan Policy Center's two-day housing conference. Four panels and speeches were explicitly devoted to the future of housing finance reform -- insider code for "how to privatize Fannie Mae and Freddie Mac." Another panel was devoted to jumpstarting the private sector's role in housing finance -- basically the same thing. The rest was, well ... there was a panel titled, "Can Millennials Save The Housing Market?" and another panel featuring a discussion between James Carville and Mary Matalin, which might have been Beltway-edgy in 1996.
The focus on how to turn Fannie Mae and Freddie Mac over to Wall Street obscures the fact that things are going relatively well at the mortgage giants these days. Sure, they cover most of the mortgage market and put taxpayers on the hook for potential losses. But in contrast to the subprime heyday, they also present taxpayers with all of the upside on mortgages they support. So far, profits have been pretty good.
The only real trouble is a 2012 Treasury Department decision that almost all profits from Fannie and Freddie have to be swept into the general fund of the U.S. government. That prevents the firms from building up a capital base that could allow some leniency on mortgage standards to let more people into the market -- if that is, in fact, needed. Elevated joblessness, stagnant wages and increasing economic inequality may well be the ultimate culprits, rather than loan approval standards.
But if Fannie and Freddie's guidelines are really locking out too many borrowers, the trauma is easily treated. The executive branch can simply reverse its profit sweep ruling, letting the firms build up capital and relax their standards without any bipartisan negotiation.
But "Why Doesn't Obama fix it?" isn't very bipartisan, and Gingrich is a Republican. And in truth, the Gingrich speech wasn't totally devoid of policy substance. He did, despite his own history, warn about the dangers of too-big-to-fail banks and the economic drag of elevated student debt levels.
"If you're serious about helping the next generation involved in housing, you have got to look at the student loan disaster," Gingrich said. "This is the next big crushing disaster coming down the road."
Indeed, Americans now shoulder more than $1 trillion in student debt amid declining wages.
But Gingrich didn't suggest any policy to combat either too-big-to-fail or the student loan crisis. Instead, he offered vague platitudes, which were eagerly devoured by an auditorium packed with the gray-bearded frumps and well-heeled young lobbyists who make up the rapidly expanding Bipartisan Industrial Complex.
"We ought to try figure out how we have an honest national conversation," Gingrich said. "And by 'national,' I mean at the level of the Congress and the elites in this city."
You must be a very sad and lonely person....how unfortunate.
Liquidity Coverage Rules Cause Fannie Mae Dip, Says Bove
by Michael Ide September 05, 2014, 11:18 am
http://www.valuewalk.com/2014/09/liquidity-coverage-rules-cause-fannie-mae-dip-says-bove/
?
Now that Fannie Mae securities won’t count against banks’ liquidity requirements like Ginnie Maes and Treasuries, they could be in much less demand
Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) stocks have taken a beating in the last few days, falling to their lowest level since March (currently $3.57) and Rafferty Capital Markets VP of equity research Richard Bove argues that the recently released liquidity coverage ratio rule is reason why.
“The decline in the stock has nothing to do with its fundamentals. It has nothing to do with new legislative thrusts. There have been no legal developments,” writes Bove in a September 4 note. “The only reason that I can determine that the stock is being pounded is financing.”
Fannie Mae securities not listed as a high quality liquid asset
The liquidity coverage rule requires banks to hold enough cash and other high quality liquid assets (HQLA) to last 30 days so that they will survive a market shock (or at least give regulators enough time to react if they won’t), but HQLAs only included cash, Treasuries, and Ginnie Mae securities – Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) securities were conspicuous in their absence. If banks can’t count those agency securities toward the liquidity coverage rule than there is much less incentive to hold them and Fannie Mae financing costs will likely go up in the future.
The other change is that FHFA director Mel Watt wants Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) to start issuing joint debt, which Bove expects to increase financing costs for Fannie Mae and decrease them for Freddie Mac, but this seems to be a secondary concern for the market. Freddie Mac has fallen by roughly the same amount over the last two days, so concerns about the liquidity coverage ratio are the more likely culprit.
New regulations would affect Fannie post-conservatorship
Bove argues that Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) shouldn’t be forced to pay more in funds in the near term since it’s going to remain in government conservatorship for the foreseeable future, but anyone who is currently invested in the agency is already betting either that it will eventually leave conservatorship more or less intact. If the regulatory landscape changes such that Fannie would leave conservatorship only to find itself at a marked competitive disadvantage, that bet might not be quite so enticing.
Our Freedoms Are Slowly Slipping Away
http://www.huffingtonpost.com/ken-blackwell/our-freedoms-are-slowly-s_b_5748882.html
As Americans celebrated Labor Day and the freedom to provide for their families, let's hope they didn't spoil the holiday yesterday by pausing to consider whether government today is making their lives easier or more difficult.
To wit, the 2014 Index of Economic Freedom, published by the Wall Street Journal and the Heritage Foundation, which ranks countries based on four main factors -- rule of law, limited government, regulatory efficiency, open markets -- has the U.S. as headed in the wrong direction. "The U.S. is the only country," the survey states, "to have recorded a loss of economic freedom each of the past seven years."
As ordinary Americans toil to put food on the table and provide for their families, most "cling" to the idea that the highest aim of our leaders is to leave a legacy of greater freedom our children, not less. Americans don't believe in a monarchy, and they actually believe everyone should live by the same set of rules, not one set of rules for them and another set for the political class when circumstances or political arguments fail.
Needless to say, many Americans are outraged to see laws being re-written midstream, whether in health care, taxes, immigration or in government grants to political cronies. They are discouraged to learn of the secret 2012 decision by the Treasury Department to confiscate the profits of the mortgage guarantors Fannie Mae and Freddie Mac. With that decision, the federal government thumbed its nose at transparency, flaunted the basic rule of law and property rights, and put the government deeper into the mortgage market. It moves our country in the opposite direction of where it should be headed.
Ordinary Americans understand that our system of freedom, bolstered by a strong foundation of contract enforcement, property rights and the rule of law works better than any other system in the world, but they also know those liberties cannot be taken for granted.
Working families, through their personal accounts, pension funds including those managed on behalf of public employees, and retirement plans hold sizable investments in Fannie Mae and Freddie Mac. These large funds also often employ private professional money managers to make choices and take risks on their behalf, and through those managers ordinary Americans are invested in a broad swath of the economy, including Fannie and Freddie.
During the financial crisis, the U.S. government, after years of policies that promoted their excesses, chose to move the mortgage packaging giants into conservatorship to manage the entities on behalf of its investors. In doing so, they agreed to a 10 percent dividend, a figure reminiscent of White House confidant Warren Buffett's deal with Goldman Sachs when it was running into trouble in 2008.
That was the deal, and it sent signals to the market at that time, including to foreign investors. Some investors held on as they had for years, some sold, some came in with new capital. Treasury then secretly changed the rules and started taking 100 percent, leaving those who stuck with their investment, or committed new capital to the market , with nothing.
The Wall Street Journal/Heritage study confirms the slow erosion of freedoms, however imperceptible to the modern liberal eye. That erosion occurs bit-by-bit, with each instance of a grab for greater government power, crony capitalism, lack of transparency, and evidence of disdain for private property rights and rule of law.
Having celebrated Labor Day, Americans must go to the polls this November, and vote for political leaders who will advance liberty, limited government, the rule of law and job opportunities.
Follow Ken Blackwell on Twitter: www.twitter.com/kenblackwell
How ironic...or should I say hypocritical...the FHFA are suing, and have settled with a lot of banks for defrauding FnF. But when it comes to FnF...FHFA claims they are the guilty party in the mortgage fraud world. And they expect us to trust them....what a crock of political hogwash.
This is the actual Job Description from fannie website
Job Description
Attorney-Corporate II-41291
Description
THE COMPANY
Fannie Mae provides reliable, large-scale access to affordable mortgage credit in communities across our nation. We are the leading source of funding for housing in America, which means more people can buy or rent a home. We are focused on sustaining the housing recovery, improving our company, and leading change to make housing better.
Join our diverse, high-performing team and make a difference as we work together to enable access to a good home.
For more information about Fannie Mae, visit www.fanniemae.com/progress.
JOB INFORMATION
Operate with considerable latitude in consulting, advising, and representing the company on a variety of complex legal matters and projects related to corporate governance, securities law, and general corporate law matters. Provide legal counsel to management on broad issues affecting the company. Ensure that board meeting documentation and securities-related filings are properly prepared.
KEY JOB FUNCTIONS
•Provide advice and counsel on corporate governance and securities law matters, including Federal Housing Finance Agency, ‘34 Act, and NYSE listing requirements, among others.
•Work with business clients to ensure adherence to important corporate and regulatory policies.
•Provide legal advice and service by combining skill in corporate law with sound business acumen and knowledge of business goals and objectives of the company.
•Assist in the coordination of Fannie Mae Board of Director meetings.
•Draft Board of Director meeting materials, including Board resolutions and minutes.
•Maintain and update corporate governance guidelines, Board Committee Charters, and relevant policies and procedures.
•Perform director independence, conflict of interest, and related party analysis.
•Monitor evolving best practices in corporate governance.
•Provide excellent client service and respond to Board member requests as needed.
•May draft comment letters, analyze legislation that impacts the company, and assist the company in responding to inquiries from Congress and government agencies.
Qualifications
EDUCATION
•Juris Doctorate
MINIMUM EXPERIENCE
•6+ years of related experience
SPECIALIZED KNOWLEDGE & SKILLS
•3 years or more legal experience in corporate governance, securities and public company matters, including `33 Act, `34 Act, SEC rules, NYSE rules, and related matters.
•Superior organizational and interpersonal communication skills.
•Tremendous focus on customer service and building trusted relationships.
•Collaborative team player.
•Experience with Board of Directors and senior management preferred.
As far as an "agreement" being made...it was pointed out that I was incorrect when the warrants were actually issued...it was AFTER the boards agreed to conservatorship. So...based on that, the BOD of both companies had no say in the matter...the director of FHFA was in total control and had/has absolute power of decision.
Per the Pershing court filing - page 13 item 41 & 42
https://timhoward717.files.wordpress.com/2014/08/81414-ackman-complaint-2.pdf
Now the question is...did FHFA lie to the BOD...or did the BOD agree prior to C-ship...we don't know. I don't think there is a public record of those conversations...could be there is...maybe we will get some good stuff about this coming out in court. I would venture we will never know that answer, but I would certainly like to know if the BOD tossed us under the bus as well to appease the political machine.
I agree...in todays world, I believe the media is more inclined to "stir the pot" with misinformation on topics like this...non-violent topics...so they get more opportunities to revisit them with "their" version of breaking news. It's all about the nickel for them as well...they get more hits on their website so they get more add revenue. I honestly don't think the media really gives a crap...they just want to be the ones to present it so they look like they are researching and reporting new information.
Nobody wants the finger pointed at them. You see it all the time where "someone" with inside knowledge spoke but their name isn't revealed because they didn't have "permission" to go public with specific info.
Fannie to sell HQ.
http://blogs.wsj.com/moneybeat/2014/08/27/fannie-mae-to-sell-headquarters/
Fannie Mae FNMA +2.34% officials told employees on Wednesday that the company plans to sell its mansion-like headquarters in Washington, D.C., as part of a consolidation of its five, D.C.-area offices into a single, leased office building. The company hasn’t yet decided on a new location but prefers that it be in downtown D.C., said a company spokesperson. The move would happen within the next two to three years, she said.
The spokesperson said that the move is in preparation of the expiration of the leases on two of its D.C. offices. The company has also lately had to deal with aging infrastructure in some locations, including at the main building, she said.
“We are focused on making responsible real estate decisions to ensure the wise use of resources, the safety and soundness of operations, and flexibility to adapt to changes in our future workplace needs,” the spokesperson wrote in a statement.
The Wall Street Journal, and many other news organizations, have long relied on photos of Fannie Mae’s iconic headquarters, located at 3900 Wisconsin Ave., with its picturesque facade and landscaping, to illustrate stories on the mortgage-finance giant.
Fannie Mae and McLean, Va.-based Freddie Mac don’t make mortgages, but buy loans from lenders, package them into securities and provide guarantees to make investors whole in case of default. The companies were placed into conservatorship in 2008 and received $188 billion in government aid. After a September dividend payment, the companies will have paid $218.7 billion to the U.S. Treasury.
that was my point exactly...I HOPE we get everything WE think we should, but I just don't have confidence in our judicial system to make that happen. So based on that premis, I would be thrilled to get (not really) a good chunk of it back. What we all want is to make a very very nice profit and for some of us that would be becoming millionaires. If that happens, I can find a way to not be as angry at the fed for what they have done. I of course would prefer 100% resolution in our favor, but again...just don't think the political machine will allow that to happen. Compromises CAN be good at times.
ok...let me ask you this...can you show PROOF that an agreement wasn't made. As for "the law is the law"...why do we have a supreme court with differing opinions? if the law is the law...then it should be back and white..all justices SHOULD come to the same conclusion....it is subject to the person's opinion, and the judge will make a decision based on their interpretation of the law...it may not or it may be something we agree with...but it will be as they decide, unless there are appeals form either side.
You are correct on the purchase of the warrants...now the big question is...are they legal based on what you've posted below.
The amended charters allowed the Treasury to purchase any obligations and other securities issued by the Companies “on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine” if the Treasury determined doing so was necessary (i) to provide stability to the financial markets; (ii) to prevent disruptions in the availability of mortgage finance; and (iii) to protect the taxpayers. And, in order to do so, the Treasury had to obtain the consent of the Companies. As set in paragraphs 81-90 and 137-40, supra. the Treasury never obtained the Companies’ consent; instead, the conservatorships and the Stock Agreements were improperly forced upon them
This is an opinion as we don't really know what was said behind closed doors. The fed thinks they had the right...we think they didn't. I certainly hope the fed acted illegally, but again...it will be up to the courts to make those decisions based on the information they have available to them, and how they choose to interpret that information within the law. I hope as much as everyone else that the proof will show the feds bent us over and acted outside the law, and that we do recover what is due us...just don't think we will get a 100% win and total recovery based on the political climate. The politicians will do whatever they can to cover their azzz on this, and if it means tossing us a few scraps to appease us...(release from C-ship...uplisting)they will no doubt go that route.
I know exactly what I've posted today...I live and think in the real world...and in this real world, the good guys don't always win...especially when you have such corrupt and powerful people in control of everything. It isn't right...but it certainly is true unfortunately. The problem is political leanings...everyone has a bias whether they are willing to admit it or not. Do you think every single judge is 100% for the law...black and white...no bias or outside influences affecting their decisions? There may be a very small % of judges that way...but I can tell you, when they get to the upper levels of judiciary positions, POLITICS play a heavy hand in their decisions more often than not.
agreed Z..I don't believe the fed acted in good faith either, nor the boards of the GSE's, and I do think we should be entitled to a 100% return. Problem is...will the courts agree and give us back what WE all believe we are due. I doubt we will get a 100% resolution in our favor...but anything is possible. Hence my mention of part of something is better than all of nothing. Regardless if WE believe we are due 100%...the courts will make a decision we will have no choice but to accept....or continue in lawsuits til long after we are gone.
oh wow...gonna go there are you. maybe you should check my posting history before you make a total fool out of yourself.
As it stands right now...the warrants are LEGAL...we may all think it isn't, but that isn't our decision to make. I don't believe the GSE boards went into this with shareholders best interests in mind, but still...you have to look at the legality of what has happened at the time it happened. Now, if the lawsuits can prove what we all think...I am all for getting 100% of what we are due. My point was simply getting a partial win is better than no win at all. ( and recovery of monies taken) sorry for the misunderstanding.
Agreed Z...I believe the govt. would be "willing" at some point to concede the sweep and conservatorship, but maintain what they have already taken and keep the warrants. It would be a massive "win - win" for both gooberment and the shareholders. I'm not THAT greedy...I would be willing to share billions with everyone...lol...and we all know...part of something is much better than all of nothing.
Were not the warrants part of the "original" agreement with the 10% div payment? I believe they were, but I could be mistaken. That would make them valid still...the judge may rule those are invalid, but currently they are still valid I believe. I believe the GSE boards agreed to the warrants BEFORE the were placed into conservatorship. I have attached a link...read pages 12 - 14....possibly the fed has overstepped their "LEGAL" authority and quite possibly invalidated their rights to the warrants...
https://timhoward717.files.wordpress.com/2014/08/81414-ackman-complaint-2.pdf
Interesting train of thought...someone can do the numbers to get an idea.
IF the fed thinks they will lose in the courts...they still have legal rights to the warrants. Say they concede the court fights and FnF return and are uplisted to NYSE or NASDAQ. I would suspect the share value would jump up around 20 - 25 pps...maybe more...maybe less. Look at the VALUE of the warrants the fed could exercise and sell...the PROFITS from both FnF would blow away the sweep takings....the fed could milk those warrants for years as the pps rose to higher levels.
I just had to respond to this bullchit about not having the emails. My expertise is DR...Disaster Recovery for computers that crash and burn. I have been in this business for 20+ years and have worked for some of the largest computer firms in the world doing my specialty of recovering "lost" data. The data isn't lost, nor is the backup system "too onerous to search".
I architect and build these systems for the government at various facilities around the country, and can tell you if there was a backup of her computer...which there is most likely multiple backups...generally 3 times a day...EVERY day..those emails are available and easily searched and recovered. ALL government systems are backed up 7 days a week 365 a year. Many...especially laptop/desktop machines are backed up a minimum of 3x a day with snapshots that are redundantly saved on both disk and tape, and quite often as an ADDITIONAL safety precaution, duplicated for a 3rd copy "just in case" and sent to a remote facility for offsite storage. Just an fyi...IF the data is on tape...it is there FOREVER...or until the tape is over written or destroyed, so the recovery process is still possible 10-15-20 years later.
Email is one of the most critical tools used within business as it affords efficiency and easy recall of information and communication between people or groups of people. Most enterprise level facilities ( the government is one) have redundant failovers for their exchange servers so there would probably be as many as 4 copies of those emails. So losing these emails...and "too onerous to search" is a bunch of political crap.
amen brother
their subscriptions must be down this month...trying to suck in new business from all sides of the fence by posting "unbiased" articles...lol
here is the full article
Treasury Abuses the Rule of Law With Fannie, Freddie
The legal question with the Treasure, Fannie and Freddie involves the rule of law and the willingness to honor contracts.
Aug. 21, 2014 5:34 p.m. ET
Regarding the article "White Flag for Frannie Investors" (Heard on the Street, Aug. 12), the title should be "Time for the U.S. Government to Surrender." I disagree with the thrust of the article, which is that the decline in the last quarter's payout from Fannie Mae FNMA +0.26% and Freddie Mac has shrunk the difference between the 10% dividend payable under the 2008 Senior Preferred Stock Purchase Agreement and the larger sums owing under the dividend sweep required by the 2012 Third Amendment.
First, one quarter doesn't resolve the valuation issue. It is the long-term prospects that determine how much money is at stake. Second, if that financial difference turns out to be as small as the article suggests, the government has no need to put forward a blizzard of dubious objections to excuse the Federal Housing Finance Agency from its clear statutory mandate, as conservator, to facilitate the orderly resumption of private market funding or capital market access for Fannie and Freddie. The government should surrender not because the stakes are low, but because it is wrong on the merits. The legal question involves the rule of law and the willingness to honor contracts. Get that right and the money can take care of itself.
Richard A. Epstein
Chicago
The writer is a law professor who has advised several institutional investors on the Fannie-Freddie litigation.
In 2008, the Treasury lured private investors into Fannie and Freddie, at an extremely risky moment, with the promise of a return if the entities returned to profitability. Once they started to generate a profit, the Treasury, with the stroke of a pen, changed the rules of the game and decided that all profits should go to the government's coffers. Such a theft of private property sends the wrong message to potential investors. If the government can turn around and deny companies the right to benefit from the risk they took, then who will invest in housing finance? This sends a terrible message to investors throughout the entire economy at a time when we are trying to move beyond a weak recovery.
The debate shouldn't be about the size of those profits, but about the very principles at stake which underline our economy—protection of property rights, keeping our word to investors and not changing the rules in the middle of the game.
Ken Blackwell
Director
Coalition for Mortgage Security
Cincinnati
the BOD technically has no say in the GSE's per terms of the conservatorship. It is effectively a dictatorship with Mr. Watt as the dictator. I am sure he will seek input from both BOD's at some point, but keep in mind...Watt is the man with the target on his back as far as the direction this goes OUTSIDE of court.
some very good reading to give some insight on the GSE's situations and possible resolutions.
http://fhfaoig.gov/LearnMore/FAQ
http://timeline.stlouisfed.org/pdf/CrisisGlossary.pdf
I like this entry in particular...keep in mind this is from the FHFA website.
"Conservatorship
A conservatorship is the legal process (for entities that are not eligible for Bankruptcy court reorganization) in which a person or entity is appointed to establish control and oversight of a
company to put it in a sound and solvent condition. In a conservatorship, the powers of the company’s directors, officers, and shareholders are transferred to the designated conservator."
Snatching Defeat from Victory at Frannie
How can these people be so friggin stupid and unwilling to look at the BIG picture, and dare I say....the law.
http://online.wsj.com/articles/heard-on-the-street-snatching-defeat-from-victory-at-frannie-1408294612
How can these people be so friggin stupid and unwilling to look at the BIG picture.
By
John Carney
Aug. 17, 2014 12:56 p.m. ET
Don't get too excited by the fact William Ackman has joined the legion of fund managers suing the government over terms of its support for Fannie Mae FNMA -1.00% and Freddie Mac. FMCC -1.01%
Even if the well-known activist manager of Pershing Square Capital Management scores a courtroom victory, the mortgage giants aren't likely to generate the returns shareholders see as theirs. That is because such expectations turn on an improbable notion: that a legal decision would pave the way for Fannie and Freddie to pay down preferred stock held by the government.
At the heart of Mr. Ackman's lawsuit is the claim the government overstepped its authority when it amended the bailout of the companies in 2012. This required Fannie and Freddie to turn over nearly all their earnings to the Treasury Department rather than pay a quarterly dividend equal to 10% of the government's holding of senior preferred stock as well as a commitment fee on the government's backstop. The latter, though, had been repeatedly waived.
Assume Mr. Ackman or other managers prevail. Even then, under the bailout agreements, Fannie and Freddie can't force redemption of the government's preferred shares as long as it is committed to backstopping the companies.
This means the companies' obligation to pay the 10% dividend would remain outstanding. And both would need to pay the commitment fee. At a level of, say, between half a percentage point and one, either company would struggle to make both those payments.
That means they would have an even tougher time building a capital buffer. And until they do so—a process that could take years—little to none of the companies' earnings power could accrue to the benefit of private holders of their preferred or common stock. Legal arguments won't change that.
There are 2 comments.
John Olesen
John Olesen
37 minutes ago
If a judge finds that they should have only paid 10 percent. That will mean they overpaid by about 80 billion dollars. You also fail to mention that if the sweep is invalidated then dividends that they "owed" were calculated incorrectly. There are strong arguments that can be made that the Senior Preferred Stock will have to be voided in any favorable decision.
Your article also fails to mention their borrowing capacity and credit rating. GSE status necessitates a tradeoff with private capital. The private capital of the company can only lose their ability to borrow in the debt markets cheaply and their government backing if they FAIL TO PROVIDE LIQUIDITY. My overall point is that it is impossible for Bill Ackman to win and for the Senior Preferred Stock liquidation preference to remain the same. It's impossible.
John Olesen
John Olesen
48 minutes ago
I hope Judge Sweeney reads this article so that she can see the type of Orwellian misinformation campaign that shareholders in the GSEs have to put up with. While it is true in a technical sense that no one is forcing us to keep our investments, the practical realities of selling our stock in the current state of things could leave many of us with a loss. So for many GSE shareholders they are "forced" to hold their stock because the consequences for selling make selling a less favorable choice than holding.
With simple logic the entire premise of this article can be refuted. Your premise is that if the 2012 third amendment sweep "agreement" is found to be unlawful and Bill Ackman wins, he will still lose because the companies will still owe 187.5 billion toward the preferred stock and would have to pay the 10 percent dividend as well the commitment fee from their earnings.
You neglect to mention that since the 2012 sweep they have paid almost 100 billion in dividends at 100 percent
yessir it is accurate
FnF total payments to date...
https://projects.propublica.org/bailout/list
Legally they can...but it's like pulling hen's teeth, so your statement is still probably 99% accurate.
http://www.economist.com/node/21547797
Banks’ Legal Tab Still Running Higher
http://blogs.wsj.com/moneybeat/2014/07/23/banks-legal-tab-still-running-higher/?mod=WSJ_qtnews_wsjlatest
By
Saabira Chaudhuri
Published Credit: Associated Press —ASSOCIATED PRESS
The legal tab for credit-crisis and mortgage related settlements at the six largest U.S. banks by assets has risen 62% in nine months to over $107 billion, according to new data from SNL Financial.
The tab matches an October projection from the Wall Street Journal that added estimates by Bernstein Research for remaining legal exposure at three of the largest banks to data from SNL showing that the six largest U.S. banks had agreed to more than $66 billion in credit-crisis and mortgage-related settlements since 2010.
Credit-crisis settlements involve litigation brought by investors for misrepresentations and omissions that violate Federal securities laws.
The updated $107 billion tab is driven largely by settlements struck by Citigroup Inc.C +1.59% and Bank of America Corp.BAC +0.11% It also includes a $13 billion settlement that J.P. Morgan Chase & Co. struck with regulators in November.
Among the major settlements included in the updated legal tab are Citigroup’s agreement to pay $7 billion to the Justice Department to settle allegations it knowingly sold shoddy mortgages ahead of the crisis.
That deal came after Citigroup said in April it had agreed to pay $1.13 billion to 18 investors seeking to recover losses from mortgage-based securities sold before the financial crisis.
Separately, Bank of America last week said it had agreed to pay $650 million to American International Group Inc.AIG +0.59% to resolve allegations of fraud in the bank’s packaging and selling of mortgages to investors during the housing bubble.
In March, Bank of America said it would pay about $9.5 billion to settle all litigation by the Federal Housing Finance Agency over mortgage securities sold to Fannie Mae FNMA +0.71% and Freddie Mac FMCC +0.72%.
One big legal issue still hanging over the Charlotte, N.C. lender is a settlement with the Justice Department that could cost it many billions of dollars. The Wall Street Journal recently reported that Bank of America is offering $13 billion to settle civil probes by the DOJ and a number of states into the bank’s alleged handling of shoddy mortgages. That figure isn’t included in SNL’s overall $107 billion number.
In addition to the settlements, SNL’s analysts included the amounts of loans previously sold that have been repurchased.