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Thank you.
When i prove right everyone wins.
No one has put together a cohesive argument refuting this.
But that's okay,
Good luck.
The warrants are still dead.
nope
That would be a "taking" remember corker saying in 2013 that "ackman" offered 52B for fannie's business and he said that was "way to little"....
Nope.
There is way too much on the table value wise.
Remember the government wants a win here.
Not another 11 years tug of war.
Warrants are dead.
Sure, there may be some dilution in an secondary; but it will be at fair value or at least 95% of it.
Otherwise, the fight will live on.
Think logically and use reason.
For reasons previously disclosed there will be no warrant conversions. Fannie and Freddie will survive and thrive without this because in the end the Government has to resolve this situation and utilizing the warrants only elongates the litigation.
The only way this is accomplished is a settlement of some kind.
The fact is Fannie and Freddie have proven over the past 11 years that there is in reality no concept of "taxpayer" losses here only government gains! This has to stop. The only taxpayers that have lost are the investors.
You can not have one sided win for government and loss for taxpayers as has been the case, that is not a democratic society and that has to be fixed.
The warrants are dead.
With the warrants dead equity raises can be fairly priced and every one wins. For large stake holders who own say 20 Million shares common to get realize 1/6th or 1/7th what they should have because the government took the rest or watered them down... will be too well funded to take it lying down.
Say the warrants do get used. So work the math and someone with 20M shares ends up with $300M but, no warrants that number is $1.8-2.1B you honestly can tell me or anyone truthfully that they will go quietly into the night.... no way. Not going to happen. Someone with $300M will easily drop $10M for a chance at the other $1.5B left on the table. Thus,
The warrants are dead.
Let reality set in.
The warrants are dead.
Provided they cancel the warrants, repay the amounts taken inexcess of the amounts provided, an equity raise if fairly priced would not be overly burdensome.
If its done right and with enough time over the next 18 months they could easily raise $100B with only minimal dilution. With the raise going to the companies balance sheets.
But the absolute key thing is the Greedy government needs to have its hands slapped to keep the out of the collections box.
WHat?
ALL of the money given to fannie and freddie was sucked right back out either thru the 10% interest (3x going rate at the time) or the net worth SWIPE.
ALL of the money ALL ALL ALL
which is why the money given Fannie and Freddie has been 175% paid for.
And then some!
Good grief.
What is significant?
Shares in your view?
Peace.
You do realize that if Fannie had been able to keep the "excess" 90 - 120 Billion that it did not hand (you know the stick up) over to the government that it would be earning another 3-4 Billion a year in profits.
Because, they'd have invested $100Billion in something that would have generated this return. And that
these amounts, compounded would have been Growing.
To say the theft is only $100Billion is so wrong. The theft is closer to $150+Billion.
Think about that.
That's just it.
Should Fannie and Freddie come back to life; and the shareowners benefit, is it any different than me putting $1,000 bucks on horse A or B at the derby? Why is it okay for the horse race winner to be applauded and me not? What about young Mr. Warren Buffet who wagered on Coca Cola when no one else was? Or when he bought millions in Bank of America? Why is he seen as "sage" when I am not?
Why
Is it Greed?
or is it
Jealousy?
Fact is the Government is Greedy, because it has manipulated the market the rigged the deck, stacked the cards in its favor to take what is not theirs by doing what no other could. Steal Billions and attempt to cover it up. They are GREEDY.
Me.
Not Greedy.
To me this was a well reasoned and researched investment that if things were "fair" and genuine would have paid off years ago.
Its like playing poker against a crooked dealer.
There are laws against that, only if they have to be followed.
Will they?
You ask
Again - if Fannie did not lose cash (only paper losses on asset write downs) where is the cash to pay that paper back ? It has not been used and I ASSUME it was paid to F
Simple.
All that money has gone to the govnerment in the form of interest (dividend) on the net worth sweep. Basically, all the money received in "equity" that was needed becuase of the mythical reserves once the reserves were reveresed went right back to the government in the form of "dividends" instead of reducing the "debt".
Effectviely it was accounting theft.
very effective.
PK,
You are coming at it from a different angle.
++++++++++++++
"Why has the stock continued to trade?" I've been asking this question for years. How can the gov that is, more often than not, conservative in its restriction of what it deems a threat to public safety, turn a blind eye to what amounts to be the circulation of bogus shares that hold no intrinsic value since the companies have essentially 0 assets/value. It's like sanctioning the circulation of counterfeit bills or allowing open access to a condemned bridge.
+++++++++++++++
And i understand where you are coming from.
my point was as to Shareholder rights. Remember some judge wrote that HERA transferred ALL rights to the government. Well, one right is the right to receive value for its commons shares, themselves, yet, everytime i sell a share i receive money. I have the right to buy and sell those very shares that some judges says ALL rights were transferred. Yet, not all rights were transferred, so, if all rights weren't transferred to the government, by virture of the fact i have the right to buy/sell shares and receive economic benefit of ownership (a right) what other rights of the ALL rights were transferred weren't transferred.
So, for Lambert ALL; really doensn't mean all, what else is there. What are the limitations, which haven't been really determined.
Because if ALL really meant all then the government owes me money for taking my money...
like you said, why did the allow a market to be made in a valueless stock.
The problem they've created quite a mess, that the only way to solve it is
1. Kill it.
or
2. Settle it.
Killing it could be very optically challenging as its a taking... and could cost them $300Billion in later settlements 5-10 years from now.
Settling it could cost them $50Billion and ends the debate. And they get billions back in taxes. Under a simple regulate, recap, and release program.
To me, settling it is by far the best solution.
Yep.
Lots of risk relying on an unqualified (person called a judge) to figure out right from wrong on things they really don't understand.
Its why we are in this mess to start with as an old person that lacks so much punted this and wrote an opinion that was such BS that no one has had the guts to gut.
Thanks Pk
So investors are "greedy" as say the poster you are responding to.
So, is capitalism greedy by nature?
So, who else is "greedy"?
Bill Gates,... Greedy
Bezos,.... Greedy
Pelosi,.... Greedy
Soros,.... Greedy
whoopi Goldberg,.... Greedy
Lots of greedy people. Under that standard.
How about this one. Some one that steals what is not theirs is greedy.
Madoff... Greedy
governement (who took what wasn't theirs) ... Greedy
But investors?? people who put their money at risk greedy? Really?....
I don't think so.
Happy to help...
1. How are you going to prove to judge that they didn't need money in 2008?
I am not sure that they might have become insolvent in 2009 with out some help. I know they were not in a liquidity crisis unlike Aig etc.
******
Basic accounting. From an operations basis, ie. cash from operations the companies provided generated cash each year from 2008 forward.
It was the mickey mouse accounting charges that were never realized that caused the supposed "deficiency". Problem was it never existed. These two never needed CASH. Follow the Cash. its so simple a 1st year accounting major at a small college like even Yale could understand.
2a. The judge overturns the nws sweep , but then says no damages because you might have become insolvent in 2009 so everything after doesn't matter.
Aig case.
*****************
That judge would be stupid and ignorant. See above, these entities from an ongoing operations created so much cash. It was never ever necessary to put anything in them. A simple proforma financial statement, backing out the cookie jar accounting would show this.
Any forensic accountant; with an honesty and truthfulness could model it. Whether some yahoo judge will believe what they see is another story. Remember most judges used to be lawyers and lawyers aren't typically the smartest business or financial analyst type person in ANY room. They are generally, liberal arts majors with no real skills. That is the risk here. Most lawyers and not technical aptitude or don't care to try to learn it.
2b. With that as precedent, every financial company that got help can later be nationalized by the government and will have to prove that they could have survived 2008 without help. Maybe banks may have to prove they would have not become insolvent in 1933 also.
*******************
I can't help you with 2b. Problem is the greed in government knows no bounds. They really should look at putting apple and amazon in conservatorship. Apple has a lot of phones on the market and a class action law suit for invasion of privacy, since apple could be recording everyone's conversations, would put them in dire straights and put the country at risk. Same for Amazon, their web services company might be spying on everyone and well... that lawsuit might sink them.
3. Yes - I know that the other side doesn't understand that if you keep the aig cases as precedent you discourage private capital. It doesn't seem to have dawned on them that screwing old shareholders is the reason no private capital wants to replace the gse's. (at least not with the same low rewards).
*****************
Of course not. Greedy government has soured many investments. Look at what they did ... look at GM when they screwed the secured debt holders. Remember Secured Debt is supposed to be higher up than preferred equity and they all got hosed. But the unions and government did quite well.
4. Problem is I underestimated the emotionalism ,petty grudges that have trumped basic logic. Sorry!
*******************
Hard to stop greedy people (the government) when the cookie jar is wide open and the judges are out to lunch. Remember the judges should be protecting the rights of the shareholders.
See what i don't get is this... and its really very simple..
if Hera was supposed to take ALL of the rights of shareholders, then why does the stock trade? I mean one basic right of the common and preferred shareholders is the right to receive payment for shares sold and even the right to be able to sell their shares, since when is "All" rights not all.... when the judges say, ALL rights are only some rights, and that's what has occurred. Problem is by the very definition if the stock trades and ALL rights weren't conferred to the government, then what other rights weren't as well. See its really a catch-22.
It's the greedy government that needs to sit down.
Its really that simple.
Brande' you don't get it.
For Freddie
$10Bil in profit.
800M shares outstanding
1. Cancel the swipe
2. Cancel the warrants
3. Recognize the SPS paid off (they'd had repaid all the money plus some) that was forced on them.
4. Settle the lawsuits. Use the overpaid funds to do it with. But make the lawsuits go away.
This will raise the common's to fair value.
Issue 300M shares and put enough capital on the books.
Use the money raised to generate $12B a year in Net income.
Have EPS of around $12 per share.
Then work on redeeming other preferred shares out of Earnings over time.
Do this and everyone wins, Government, Taxpayers, PFS and common and employees.
Its so simple.
Greedy people and government just needs to get out of the way and stand down.
Y not?
Has as good a chance of occurring; than anything else and its one easy way of starting the reformation and part of conserve and preserve the assets of fannie and freddie which the fhfa was suppose to do.
So,
y not.
its certainly possible and its 100% believable.
Cancel the Warrants.
2 more days until 2019.
2019 the year the warrants are finally cancelled.
Huh?
The government didn't bail out fannie and freddie. What narrative are you been sold on? But, Fannie and Freddie bailed out the government and need to be rewarded.
Perhaps $100B payment to them / their shareholders would be good thing to clean up the mess they created.
Warrants to be cancelled.
Why do you think the government will pay $100Billion to give back something it stole? Maybe in litigation settlement?
Just 2 more full days before the year the Warrants are cancelled.
2019 is going to be a great year for Fannie and Freddie. As company's the will begin the process of rebuilding capital and respect.
Looking forward to the Day the Warrants are Cancelled.
Any wagers as to when W day will be here?
With what money? FnF have plenty of cash on hand, but buying back the warrants would reduce their net worth dollar-for-dollar. That leaves a maximum of $6B of wiggle room, and I don't see Treasury being willing to settle for that little.
Oh pulease. The warrants will be cancelled. As for if they had to buy them back, sure, let them pay treasury what they paid for them, Zilcho! Or perhaps the warrant price, heck i have that in my piggy bank, sure it will be a reduction in networth but far less than the sweep.
In total the amount necessary to buy back the warrants equals just about the amount of net income earned by fannie and freddie in 10 minutes of quarterly operations. Remember they gen $5Billion a quarter and the warrant value is peanuts.
Peace.
When the warrants are canceled which should happen with the news of release. This could happen at any time. Probably won't happen until the new fhfa director comes in but, its just a matter of time.
Warrants canceled will be good times for shareholders alike, preferred and common.
Its close.
So what happens when the Government announces they are canceling the warrants?
When that happens, how does the market react?
Amelia and YG,
Let me clarify my statement relative to the HF saving FandF.
What they did was shine a light on the situation. The put money and exposure behind revealing to the world the "stick up" that occurred.
From that perspective, without their suing, stirring up the dust and making noise, our shareholder revolt would have been quickly silenced and fandf would have been sucked under from the current.
Government, must be cursing the HF not for potentially making a wise investment, but really, from exposing the the theft.
From that perspective, if they gov't had quickly paid off the HF or greenmail or whatever, the up rising would have gone quietly into the night.
Now, they have to deal withthem and they've been exposed. And that is why the HF saved FandF.
Because they didn't let the government steal the ball and take it home.
Thanks for the posts and conversations.
Merry Christmas to all!
Sobering reality is we wait.
While I'd love to see fair value; my personal numbers have not calculated such in over two years. I also have enough shares that anything above $10 would be very welcome; but losing it all would be far less of an amount as the recent general market sell off; so, I really look at this as either a win or a lose proposition. Only time will tell; and I too am growing fed up with the wait for what truly should have been an easy fix.
Problem was there likely were many that would have taken the fix but many others that had political motives / business reasons to try and kill these two; which won't likely occur because the value the provide should be bland (ie. for everyone of every walk of life).
My honest hope is by the end of 2019 we'll know more what is likely to occur. I don't mind holding these pending resolution if the future is positive while it plays out; but the internment they've seem to be given (the cold shoulder if you will) is nasty.
The narrative of "evil" hedgefunds making a bet and being handsomely rewarded needs to change. People need to understand that it wasn't the hedgefunds that provided the opportunity it was the government and its evil intentions; it was the hedgefunds that rescued the abandoned kittens and puppies (fannie and freddie) and saved them. And, underneath all that are people. People like you and me that trusted the government; believed in them and invested their own money. If the government didn't want that they should have stopped them from trading 10+ years ago instead of manipulating the market by 1. creating those "warrants" 2. placing a 10% interest rate and 3. by masterminding that evil sweep. All of these were done to punish the entities and kill them; yet they survived. Don't blame the people that saved them when you tried to kill them. The investors are the good people they are the ones that kept them around to help people get affordable loans to buy their American Dreams.
I realize Rosner has been a general decent fan of F and F; but sure wish he'd realize that those warrants will never be utilized by the gov't for anything other than fodder.
They simply can't be if they want a resolution. $100B is simply too much not to sue and win over; so stop it already!
Why or how do people write such lies and untruths as this and keep writing it like eventually people believe them? The statements made in this article are so wrong and that i hope people will comment on it an d try to correct it.
So exhausting to see this stuff written as if it were true when its been a narrative totally exposed as false.
Very frustrating and what people are up against in getting the news out.
This is a very silly remark.
The only thing really left is a recap.
At this juncture there really isn't any logical business reason to allow anything else. You've got a business generating 20B a year in after tax profits that if the gov't gave to someone else it would have to pay for it at fair value. If the gov't opted to use the warrants they'd be sued and end up paying. If the gov't folded it into another business or did something even more stupid; either way, they'd have to pay for it.
Sure do something and write a very big check.
The clock has run out; its run out on the gov't as the truth is known and sure they can leave these as is forever... or can they? At some point some smart lawyer is gonna sue on the merits of the whole enchilda .... temporary isn't permanent... so get on with it already.
its really only a matter of time. It truly is.
Clark,
Yes overall trends in the market place. Been studying these for a while and its very obvious that Commons are trending whereas the others are not; looking at volumes and tendencies.
Again, take it for what its worth. Preferreds just not trending. And i do want them to be made whole.
I continue to see lots of rotation out of preferred and into Common.
Obviously, it would appear common's are going to be the winner here as preferred's are limited and capped.
Not a reco... but you'd be foolish not to pay attention.
Momentum is building.
Funny you ask..
Today and yesterday I swapped some FMCC for FNMA by selling shares at a loss and then buying the others. I was able to use effectively my tax savings to reallocate 25% more shares in the process.
So yes... tax loss harvesting but maintained the overall position.
You should know that your comment is completely wrong.
Folks can sue anyone for anything at any time. Whether they prevail is a matter of what they can convince a judge or jury of. Right or wrong is meaningless and btw
Rights vested in ownership transfer with ownership. The amount of gain or loss may differ but rights is rights.
Sorry to burst the bubble.
The concept of warrants are in themselves not bad. The problem here is that they are confiscatory, punitive, nasty and likely illegal.
Had the companies actually needed the money and been a true desperate state sure, a lender often puts money in extracts a return and includes things that secures its money. Warrants for some % is expected. But, I've been n corporate finance for a lot of years, raised some dough and never even contemplated warrants at 1/1,000,000,000th of the value of the underlying such as to ostensibly give 80% of the company away; especially when the company really didn't need the money.
Had the government given itself warrants for say 20% of the stock at a value of $45 or so a share which represented 30-40% discount to fair value at the time or set them equal to a price or % of some future economic value derived by Earnings / business then sure; I'd have had no problem with them. But to intentionally do harm. That was wrong.
As it was with the 80% control going over to government the fact they then charged itself 10% interest is as well 3x the cost of money that was borrowed and that too should have been problematic to sec and regulators.
So, argue whatever, you want readers, say what you will, but in my opinion, the warrants are garbage. Fruit of a poison tree and will ultimately be the subject of many more lawsuits if ever exercised. They are tainted.
At some point some one in government or judicairy or heck even legislator at some level is going to have to notice all the lawsuits filed against fhfa / treasury / and fnma&Fmcc regarding the actions surrounding the conservatorship, the warrants, the takings (nws) and a whole host of other things and truly wonder.
"Gosh there sure seems to be a lot of lawsuits" maybe something was done wrong as there sure seems to be a lot of upset people with the actions that were taken and the positions of the government" Wonder why people are spending millions on these lawsuits, if they didn't feel like something was wrong.
Hmmm... maybe there is some truth to it; as you know perhaps one or two lawsuits would be trivial smattering, but 20? Hmmm?
Looks like some kind of lots of smoke. Probably something wrong that needs to be fixed.
Rather than... lets just cover it up and hope we win by running out the clock and out maneuvering everyone, cause eventually, everyone else will grow weary, tired or die of old age and we can just win that way.... which seems like their MO.
But really, you'd think there were someone smart enough somewhere that could get to the same reasoning as a whole host of people suing the government and say... what a minute.
How incredibly odd.
Disagree all day long and you'll still be wrong.
The warrants crippled the companies and made their equity near worthless and impossible to raise money equitably. if exercised would amount to a taking of nearly 80% of the company for near nothing. They are unabashedly theft and everyone that is smart enough knows it.
But hey, if the judges are in the tank with therest of government shills then we know whats going to happen.
honestly, the warrants are garbage and just more of government greed and ill will to the tax payers.
At this point, there will be no cohesive congressional action in 2019-20 with split congress / senate.
Thus only way out is administrative action which could have been taken 8 years ago. Except instead we got the nws and more blunder and looting by the gov't.
When will it stop? Who will make them? Who can?
Sure I can, and I did.
Ha Ha Ha - everyone has a say
Gov't cares not for anything other than gov't and free money - that is what taxes are free money and this type of theft is easiest.
The warrants were created between two gov't entities to harm the entities and take what was not theirs at below fair value. Exercising the warrants effectuates the taking and creates money damages owed. That will be litigated for the next 10 years.
Sorry, deal with it, you may not like it but it is what it is and truth hurts, but stop being blind to what others clearly see, except if there were a reason to be ignorant or if being on the take. Facts remain facts; but like waffle house, spread-em around a little and its still hash browns.
Its a loss for everyone; except the greedy government. Whose greed knows no bounds. KT must be a gov' operative. Otherwise they'd be on the side of the people. Guess not.
I would think you are wrong.
Its the warrants that put throw up in everyone's mouths.
They just can't be stomached. Remove them from the equation and this would work and everyone would be better off.
Leave them in and this goes on another 10 years. Our ten year old children in 2008 will be litigating this in 2030.
Its not a win for anyone except greedy government.
Remove the takings of the government from that equation and instead of diluting common holders and JPS stock into the ground it becomes reasonable and the gov gets to keep the extra 60 Billion they'd stolen.
But to give them another 125Billion on top of the current 60+ Billion would be theft. And will spur more lawsuits as the takings claim will be ripe.
A greedy government is not a good government. Greed is never good when the government feeds. They tend to over do it and ruin the meal.
just say no.
This is stupid.
15 billion shares and gov. getting 8 billion.
for what?
They've been repaid and profiteered to the tune of 60 billion or more.
dumb.
Will cause more lawsuits.
So, how do you "settle" the lawsuits and provide compensation for the aggrieved?
What would be fair? In your opinion to resolve all of the lawsuits?
20-30 Billion? Remember this is over 10+ years and thousands of people involved?
Is it possible to settle such a large expansive action in one combined mediation?