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It's not $228ps but $258ps in the case of FMCC, $240ps for FNMA.
I updated the 2019 fair value assuming that all the Credit Risk Transfers are voided. The CRT expense accounts for almost 10% of their Net Revenues. So, it's a big deal!
Stating what you aren't can cause severe damage once the truth comes out.
For instance, there are lawsuits that probably will end up with the Government paying hefty punitive damages to the enterprises for the illegal imposition of the Conservatorship, besides a refund of the amount illegally appropriated, and both measures don't benefit the holders of JPS, other that it will make FnF be declared Adequately Capitalized sooner and the dividend payments will resume.
It only benefits the shareholders. So, the sooner they realize they are not shareholders, the better, so that they avoid a disappointment later on and now they can switch their JPS for Commons.
The outcome will be that the dividend payments waived (restricted for Undercapitalized enterprises) aim at recapitalizing FnF and the Govt is just disguising it as a theft, depositing all the amounts in a escrow account at the Treasury department that will be returned.
Holders of JPS are worker bees that feed the common shareholders.
*MENTAL HEALTH ALERT*MENTAL HEALTH ALERT*MENTAL HEALTH ALERT*
JPS HOLDERS MUST IMMEDIATELY STOP CALLING THEMSELVES FnF SHAREHOLDERS
The contract specifications make them be recorded as Equity and Capital, not shareholders. They can't get more than what is written in the contract. They hold obligations.
In other words, you can get any obligation you want currently outstanding: MBS, MTN,... and amend the specifications of their contract adding the clause LIQUIDATION RIGHT and they're automatically stripped out of Debt and recorded as Equity. But they will never be FnF shareholders.
You can also add the clause "dividend payment only when declared by the BOD". It would make them Capital, even if they're still recorded as Debt, since that's a loss-absorbing capability (when FnF are undercapitalized in this case) that makes any item be deemed Capital: Retained Earnings, Loan Loss Reserve, etc.
INSTITUTIONAL INVESTORS EVADE THEIR OBLIGATION TO FILE SCHEDULE 13D: BENEFICIAL OWNERSHIP.
According to Ackman, he doesn't think that they have the obligation to report it due to HERA's transfer-of-rights provision. Like Ackman, all others.
Thus, any report about institutional investors buying is false. They could have bought long time ago or it was bought by a third party and later transferred in blocks during the quarter, for instance.
The United States has turned into Sodom and Gomorrah.
The large blocks don't mean that there's big institutional investors buying, because there would be other selling.
The blocks mean intra-operations by institutions that want to transfer shares from one fund to another.
Fake volume.
HELL YES, CONSERVATORSHIP IS OVER
I have added $20 billion in punitive damages to each GSE due to the outrageous behaviour of the Treasury in 2008 that purchased "cumulative" SPS, instead of "noncumulative", in order to not record the SPS as Core Capital, which contravenes the dynamic in the purchases of Preferred Stocks by the Treasury, according to the Charter, that occurred during 1954 through 1968. We got it.
OLD PRINT EXPLAINS HOW @USTreasury JOINED IN $FNMA's CAPITAL
— Conservatives against Trump (@CarlosVignote) September 14, 2019
Nov 1954: UST purchased initial $92mll worth of Preferred Stock to match FNMA's Total Capital.
Funding commitment:
+$50mll & +65mll in 1957
+$110mll in 1966
Total bought:$163mll
Authorization expired in 1968.#Fanniegate pic.twitter.com/lbRmkGAWpv
BOMBSHELL! FINAL PROOF OF THE EXISTENCE OF THE SECRET PLAN.
The dividend to Treasury is meant at repaying the obligations SPS and Recapitalization, per the exceptions to the restriction on Capital Distributions in HERA and the 12 CFR 1237.12.
The Govt is only entitled to the dividend established in the Charter at a similar rate as the Treasury yields, but drastically reduced because the Treasury took a huge collateral in the form of a Warrant.
The dividend ($1 billion maximum, if any) is payable (as the SPS are cumulative) once Adequately Capitalized.
FINAL PROOF.
We got it.
They can't be delisted from nowhere, you have to say that they were delisted from the NYSE, and listed on the OTC Market.
And if you say the first part and omit the second, it seems that they were taken private or filed for bankruptcy, but FnF are still publicly-traded enterprises and hugely profitable.
Wanna play with the words?
The best analysis always first in #Fanniegate (Twitter).
CONSERVATORSHIP IS OVER
Thread explaining that we suffer an assault attempt on FnF by the Mob. It makes clear that the U.S. Treasury was authorized in the Charter to buy low-rate Preferred Stocks prior 2008 and the shareholders have Preference Subscription Right. $148 billion is the amount due.
No with a $148 billion Treasury refund and an initial Capital Surplus provided by the Treasury in the form of purchases of noncumulative SPS.
FnF can continue building up Capital with retained earnings while paying a small dividend to the SPS until fetching a 100% Capital Surplus over their Adequate Capital level. This isn't a regulatory capital threshold but it's been proven that the Capital Surplus that FnF had before 2009 wasn't enough.
Notice that the dividend payment to the Commons can be suspended during many years, but it doesn't affect their valuation.
Willett the best judge? A judge can't be half crooked. Either he is crooked or he is not. Today in #Fanniegate he is accused of COLLUSION with Mnuchin, besides the previous accusation contending that he missed that ANY DIVIDEND is restricted when the enterprises are undercapitalized (exceptions). This is both a statutory and a business concept.
He wrote in the majority opinion: "The Treasury took on risk. The taxpayer is entitled to compensation for the cost of financing" and this phrase didn't appear in his dissent opinion of one year earlier. Now this same phrase is being repeated by Mnuchin in a shameful attempt to keep the stolen money.
C.O.L.L.U.S.I.O.N.
If you want to become a true patriot, you must start denouncing the actions taken by crooked judges and crooked lawyers like Plaintiff Joshua Angel before Judge Lamberth.
I didn't say that FnF would issue $140.2b worth of new noncumulative SPS (Core Capital). That's the maximum amount the Treasury can buy because it's the amount of funding commitment remaining.
The old SPS would be cancelled as they were repaid in 2013 and 2014.
In Twitter, I mentioned that it's only needed it for a Capital Surplus over a revised Adequate Capital level. Then $20 billion together would be enough if the Treasury reimburses the $148 billion due.
The SPS would have a low dividend. Because the Charter says that the obligations bought by the Treasury should have a yield similar to the Treasury yields at the time. So, similar to the current 30-year Treasury yield. 2.24% as of today.
The JPS would be redeemed at their par-value.
Yes, but you miss why both said that. It was Senator Reed who uncovered the big lie when he asked Mnuchin: "Isn't it because you are taking their profits away?".
Mnuchin and Calabria didn't know where to hide.
SCOOP. Mnuchin said in the hearing that FnF "will keep the cash and will increase their capitalization" and followed up with "in return for that, we expect the taxpayer get compensated" and one of the measures signaled, for the the first time, was increase the SPS. What lays behind is the purchase of new SPS but this time "noncumulative" so that they will be deemed Core Capital, unlike today that they are not. This way, it helps in the recapitalization and, at the same time, the Government gets compensated for the risk of holding this position in obligations SPS through a dividend payment once Adequately Capitalized. It's capital necessary to build up an initial Capital Surplus, because with the amount owed by the Treasury ($148 billion) is enough to meet a reviewed Adequate Capital threshold. This is big news because it rules out a capital increase and subsequent dilution of the existing common shareholders. Under this plan, the JPS will be redeemed at par-value on day one. If you are wondering, the Treasury can buy more SPS because there's still $140.2 billion funding commitment remaining.
More detail in #Fanniegate (Twitter).
Patriots don't defend judges that deliberately omit important legislation to enrich the Government. That's communism and brainwashing of the population.
A ruling can't be half-baked. That's corruption. Judge Willett is a Trump's appointee. I leave it there.
The EPS is higher in FMCC, so the difference of 20 pennies should be the opposite. The key is that FMCC has almost half the total shares outstanding of FNMA.
BREAKING.Judge Willett is being grilled in #Fanniegate for his majority opinion written in the en-banc ruling, because he doesn't know that a dividend is a Capital Distribution that depletes Capital, either a NWS dividend, a 10% dividend or a mere 1% dividend.
This is a business judgement AND a statutory interpretation. He failed in both. He laid out the grounds for the government to approve a different dividend, when he signaled that the government deserves a compensation for funding, and that's wrong.
The shareholders require the resignation of Judge Willett as soon as possible. It's not time for rookies.
Here I am.
New blog by the way. https://vignote.blogspot.com/2019/07/fannie-mae-and-freddie-mac-theres-not.html
Fannie/Freddie without dividend payments to Treasury are worth $240ps and $258ps, respectively.(*)
The dividends are restricted for Undercapitaized enterprises because it depletes Capital and thus, it contravenes the Conservator's Power: "Put FnF in a sound and solvent condition".
Later we discuss how much capital they build through retained earnings after the Treasury's refund.
(*)2019 PER of 13 times. CRT and TCCA fees cancelled.
The Stuttgart Stock Exchange lags the performance in the OTC Market. Wake up!
You can see the NYSE Listing Requirements here.
Basically, the minimum share price of $4 is the only theme that hinders the up-listing. A Conservatorship is a legal state that can't be used as an excuse to impede trading in the NYSE.
FnF comply with the S.E.C. filing reports.
NYSE LISTING REQUIREMENT IS $4 PER STOCK. The FHFA should initiate the request to trade in the NYSE on Monday. There's no reason to hinder the up-listing. Go call the FHFA.
BIG WIN IN COURT. Count 1 basically declared the NWS voided, as "the FHFA exceeded its statutory powers" when it approved the NWS. It turns out that later it remanded the case to a District Court, due to some formality: "it will decide if fact issues require trial or if summary judgement must be granted."
We can't let this happen. I bet that the hedge-funds are behind surprising ending, as it means more delay so that they can accumulate more stocks from the retail investors that have the need to sell periodically or, simply put, they need to have the full value of their property as soon as possible for obvious reasons.One week? One month? 6 months?
The White House, Treasury Department and the FHFA must schedule an urgent meeting today or tomorrow with the objective to come up with a final resolution that abides by the statute that rules FnF. This ruling has been a major blow for a supposedly democratic government, as it denounces that it has abused its power during almost 7 years.
Many analysis today in #Fanniegate (Twitter).
The restructuring of FnF is a theme of the past. Specifically from late 2010. The Senior Vice President of Paulson and Co, Michael Warldorf, attended a meeting at the Treasury Department on November 9th, 2010.
US Treasury met with John Rogers, Harvey Schwartz, Steve Strongin and six other Goldman Sachs executives on November 17, 2010.
It appeared in the Treasury's agenda at the time.
Yesterday, the Treasury refuted the information about being engaged with an investment firm for restructuring FnF at this moment.
After 11 years, now the story is about release from Conservatorship, keep building up capital and refund of the amount due.
I have checked out my old blog and the word restructuring is written a hundred times in my daily comments during those crazy days.
Now talking about restructuring is laughable.
LAST DAY TO SWITCH ALL YOUR PREFERREDS FOR COMMONS.
A conservatorship isn't about diluting their shareholders in the company. Thus, if there's a stock offering, we should get Preference Subscription Rights.
Anyway, a conservatorship isn't about stealing from enterprises. The U.S. Treasury owes $148 billion to FnF.
MAKE IT OR BREAK IT.
A settlement only if you filed a lawsuit, because what it's at stake is a contractual claim. I remind you that Plaintiff Joshua Angel filed the same lawsuit and it was time-barred by Judge Lamberth. Anyway, there won't be any settlement for any litigant once The Secret Plan is unveiled, as it renders them meritless. The dividend was impeccably suspended. On the other hand, the Secret Plan opens up the possibility of getting a compensation for moral damages as, had this plan been made public, the stocks would have been trading at their fair value.
BOTTOM LINE
Another reason to hold only Common Stocks.
The best analysis first in #Fanniegate (Twitter).
This is the link to the Recapitalization Plan.
HERE.
Questions?
Then, I nailed it. Thanks for posting!
RECAPITALIZATION PLAN JUST IN. TOTAL CAPITAL=$177 BILLION
$6b 2Q Net Worth
$5.2b 3Q dividend withheld
$18b Loan Loss Reserve
Total amount owed by the U.S. Treasury: $148b
$103b excess over SPS, due to dividend restricted
$7b Corporate Tax on settlements
$18b TCCA fees
$15b MHA program
$5b 1.5% on the escrow account
The Loan Loss Reserve is comprised for 2 items:
-Allowance for Loan Losses, which are the individually impaired loans that the SA article points out. It's denounced that it's a fraud because it has been swelled with imaginary credit losses due to the flawed accounting rule that began in 2008. Even if they were reserve for real credit losses (the new accounting change in 2020), they are expected losses not realized yet. Thus, it's still a RESERVE and must be deemed Capital.
-Reserve for Guarantee Losses: This is a general reserve of the entire portfolio that you have signaled. This reserve is now empty and the new accounting rule that starts in January 2020 will require to fill it up.
But the point I made is the same. Because you have to sum up both reserves to get the Loan Loss Reserve, and that's TIER 2 Capital for the reason I mentioned before: it absorbs future credit losses.
A reserve is Capital.
The Loan Loss Reserve is TIER 2 Capital that adds up to the Core Capital to form the Total Capital, which is the amount that must meet the Risk-Based capital requirement to become Adequately Capitalized.
The FHFA asked a question in the comment period of its capital proposal whether the Loan Loss Reserve should be considered Capital because it argued that it shouldn't, obviously, as its role is to damage the enterprises.
My comment in the FHFA's website was that the Loan Loss Reserve is Capital because it absorbs losses (function of every item deemed Capital), since the credit losses are charged against this reserve and not against earnings. This is why you don't see the credit losses in their Income Statements.
For this reason, and other 3 or 4 reasons submitted in other comments, we will never see the FHFA's capital proposal come to light. They will recover the old FHEFSSA's formula that gave the outcome of a Risk-Based Capital of 2% of Total Assets. Around $116 billion.
FnF WILL GET RID OF THE JPS.It means that they will be redeemed at their par-value, not wiped out.
They will disappear, gone, out, evaporated, done, etc.
The fate of each type of security issued by FnF, won't be affected by a direct decision of the U.S. Treasury, but the financial markets will price in any scenario laid out by the Administration. In other words, the Administration won't deal with the securities.
So, FnF won't be forced to raise Capital to bail out the holders of JPS so that they can get their par-value sooner than otherwise would be if FnF are released today Undercapitalized, according to the FHEFSSA, and build Capital through Retained Earnings.
They won't be swapped for Common Stocks either. They are obligations and their fair value is way below the common stocks'.
Keep dreaming on a warrant exercised and multiple stock offerings, the truth is that you can switch your JPS for Common Stocks yourself in the smartest decision that you will ever make.
LAST DAY TODAY. MAKE IT OR BREAK IT.
FEW DAYS LEFT FOR THE ANNOUNCEMENT OF THE SECRET PLAN
As part of a broad plan called Treasury Housing Reform Plan, that includes the FHA, VA, GNMA and the FHLBanks, along with a new Housing Finance System to boost competition.
You can read it here
It's time to get rid of the Junior Preferred Stockholders!!!!!!!!!!!!!
The SECRET PLAN is kept secret. The fact that the U.S. Treasury doesn't want to submit the documents required in the subpoena issued by the Judge Lamberth after it learned that Fairholme asked about the existence of the Secret Plan, proves that it wants to keep it secret. Also there are thousands of documents classified Presidental Privilege that the judge Sweeney didn't target and got exempted from the discovery process.
It's a secret passed on from administration to administration.
It's secret because it hasn't been made public, but it's based on the current laws and regulations in force, because they explicitly say that it can be done.
Thus, the plan isn't a secret, only that it hasn't been unveiled and it's kept secret. Notice the difference?
Read THE SECRET PLAN to have a glimpse of what the U.S. Treasury Plan will be.
Grand premiere on Labor Day.