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These stress test are silly and a waste of time.
Fact is Apple or Facebook, could show insolvency given a wide array of parameters.
Zero faith in them as anything more than a joke.
Figures lie and liars figure.
liars figured.
So,
Is it illegal to lie when regulating an entity?
Are the reasons important. Does the narrative matter?
Remember, they are above judicial review so said the Perry appeal.
So, does it matter.
Some might say, so what, they did what they wanted to do because congress allowed them to, and the judges stamped it legal.
Now, does it matter that what they did was inherently, wrong?
Is there a better way?
Probably, the post of the day.
Absolutely, at some point some where some learned judge that has smarts and not conflicted by other factors, money, power, greed or both will finally see the situation without rose colored glasses and come down against the greedy government and its henchmen.
When will that occur?
You do mean GREEDY government, right? I mean that is who has gotten all the loot!
Its in the message and how its delivered.
The government has taken what does not belong to them and done what they will.
Control the message control the outcome.
Trump is just not good at managing the narrative. He allows others to define his words.
Rek,
Stop already and just admit the error of your thoughts.
OMG -
Here is the very post on GSElinks..."Peter Chapman writes, "The Clerk released FHFA and Treasury's briefs filed last week in the Eighth Circuit today. FHFA makes its position clear that HERA gives it the power to do whatever it wants, it has, FHFA is not like any common-law conservator, and nobody -- no GSE shareholder, no legislator, no Administration official, and no judge -- can second-guess FHFA's decisions and actions."
As yet another example of what I've written, until and unless this position is overturned. Watt is Golden.
AS for the dividend..
https://www.fhfa.gov/Conservatorship/Documents/Senior-Preferred-Stock-Agree/2012-8-17_SPSPA_FreddieMac_Amendment3_N508.pdf
Read page 3. Section 2. Para A.
"as and if declared by the Board of Directors" in its "sole discretion".
Meaning... IF DECLARED!! its payable IF ITS NOT DECLARED its not then due and payable.
Cheers.
Rek,
On this topic, you are incorrect.
I'll try one more time.
cause here is not a defined term; its relative, and would have to be subject to scrutiny. Fact is, Watt can't be fired for his actions as conservator. His actions as conservator are not reviewable and his actions can not be second guessed. If you could just make up a "cause" then why write anything in there, because "cause" could be leaving the toilet lid up under your premise. But as actions as "conservator" his actions, are not a "cause" they are immune.
As for the sweep.
Dividends have to be declared to be payable - I'd think you'd probably agree with that.
If the board does not declare a dividend no dividends are payable.
If watt instructs the board to not declare a dividend (in his role as conservator), no dividend is payable.
Thus, Watt could, retain all capital and in his capacity as conservator, his actions would be beyond review.
This isn't hard to understand its very easy and very plain language.
Rek,
I don't have to prove you are wrong in this instance relative to this situation to know you are wrong. Heck, even you must realize that contracts are breached all the time, every day, and unless challenged and unless the other party negotiates a remedy the courts can wind so slowly, that there is no sure thing.
Not really. You are confusing the remedy of a breach of contract and the necessary means achieve cause in a termination.
Nope.
If Watt were to be accused of murder, Trump would not be required to wait for the end of a potentially 5 year trial series to find cause to fire. And, like that, even perceived breach of contract would likely be enough for Trump to fire Watt.
Yep. -
Its easy to be accused of things. Like Bill Cosby, for example or Bill Clinton - Accused does not equal guilt. Bill O'reilly was fired with out a trial, because his contract allowed for it. Watt's does not.
"Perceived" breach of contract? Really, now that is a leap of faith. But, I won't laugh, but that is far out there.
I might also point out that under your scenario, Trump could never find cause under any circumstance since Watts contract would be over way before any legal proceedings would end.
I'd agree with you here. You are on the right path. Watt, almost surely can't be terminated. Although he could resign. As written and as litigated, his actions are immune from judicial review.
How would that play out...
Executive - "Watt, you are fired."
Watt - "Denied"
Executive - "No, seriously you are fired"
Watt - "lol, no"
Then what, have watt arrested and thrown in jail? Really, is the dungeon still used?
See, only if anarchy is enforced can Watt be removed.
Rek, I know you've been helpful here keeping people straight with regards to Fannie and Freddie, but on these two, the ability of watt to effectively suspend it by not allowing the board to declare a dividend and the ability or rather inability of him to be terminated are two where your positions hold no water.
Rek,
Have to disagree with you here.
You've stated that "witholding funds would be a breach of contract" and that he would be fired next day for "cause" because of the breach of contract.
Breach of contract is a legal thing. FHFA/FandF would have to be sued for this. They'd then have to be found to be in breach or "guilty" if you will, of it for it to be Breach of Contract (or admit to it). Until then, its just an allegation of Breach and an allegation of that is not "cause". But, as we've seen Watt could assert many defenses and the discovery alone could take 4-5 years to play out; after first exhausting many rounds of motions along the way HERA is written.
So, its not as easy as you write.
It says quite clearly in HERA that Watt can be fired for cause by the President. Reneging on a contract with the executive branch is MORE than enough cause.
Watt can't be fired. For "cause" really? That could be a lengthy discussion of what "cause" would be and it would legally revert back to his action as "conservator". His actions, as conservator, without bounds is not challengable. Thus he can't be fired. Sure they could try, but then it would be right back in court and they'd lose. Sorry. But you are incorrect.
This is just a lack of understanding as to how the SPSA and contracts work. The only way funds aren't payable is if two things happen: 1.) the funds aren't declared and 2.) the treasury LETS the funds not be declared.
This is you just not reading and understanding what is written in the amendment. It clearly indicates, "the dividend has to be declared" by the board of directors. You may not have ever worked in corporate america, but Boards of Directors declare dividends, once declared they become payable. Until declared they, unlike interest, are not owed. Treasury, as the investor has no control on the declaration of dividends.
I'd encourage the reading of the amendment. This is exactly, why or how Watt, could if he had the backbone, not pay the "dividend". Remember, its already been decided that as Conservator, Watt can do what ever he wants and his actions can not be challenged. This is the power treasury defended for him and this is the power that will be or could be used against them.
1. Watt can't be fired.
2. If no dividends (interest) are declared by the board then they would not be payable. So, absolutely if watt directs the board not to declare a dividend (interest) $0 would be payable.
3. Since the interest is currently a net worth amount - they are in essence cumulative.
Cheerio pip pip and all that.
Divide Widens
http://www.cnbc.com/2017/06/21/divide-widens-between-housing-haves-and-have-nots.html?__source=newsletter%7Ceveningbrief
Part of the reason no new buyers is because of the strangle on Fannie and Freddie that keep them from buying some loans.
We need a free fannie and freddie to help spur the economic recovery of America.
Home ownership was what has driven wealth in this country over the past 80 years (except the last 9) thanks to government.
We need less investors in home ownership and more families.
Renters generally create no individual wealth.
Unconscionability rears its head in contracts where the bargaining powers of one of the parties in the contract were removed to the point that the party had no actual choice in making the contract. There is no known evidence to show such a situation occurred.
Surely you jest .
Unconscionability is a contract term. We know, actually, that contract based claims are not judicially barred under HERA. Therefore, this claim would not be barred under HERA.
Claims of duties of FHFA have been unilaterially dismissed. These actions, any actions are based in contracts, they've all been washed away like the snow and the rain.
Running a stop sign is not, in and of itself, illegal. In fact, in many states, the law states that you must slow at a stop sign and stop if necessary. In all states, you must only comply with a driving regulation if is safe to do so (hence why the "If I slowed down, it would have been dangerous because of the flow of traffic" defense works so well for many speeding tickets).
This is why there must be a trial prior to determining something is illegal. Because defenses may turn an illegal act into a legal one.
More of the same. Either it is or it isn't. Pick a square any square just stay on it.
Problem with fhfa and treasury they pick the argument / defense to sway between on and off. Like a light switch. And here yet the same. Truth is its not the truth. eh.
While certainly the warrants - terms are unconscionable and are likely a certified taking, ie. 25K price for stock worth 80-200 Billion.
The fact that FHFA and Treasury transactions are beyond judicial review while it doesnt make them legal, certainly limits anyone challenging their legality.
Personally, to me they are not lawful. They were contrived to steal and transfer benefit from one class to another (entity) if you will by effectively the same entity (government) which makes them an unlawful transaction, ie. not arms length. However, if challenged, revert to the above, you can't challenge even their one sided transactions, because congress and the president said so.
Now, i am sure that others may argue, "only things found to be illegal are illegal, all the other stuff isn't until such". But i find that argument on the merits fail, because, yesterday i saw someone run a stop sign. Yep didn't stop at all. But, because they were not issued a citation, and that citation that wasn't issued didn't go thru the judicial process, therefore, while the act is illegal, their action was not. That is in some peoples mind.
When they were taken over this was suppose to be a "time out" a temporary thing.
Hera and the fhfa' is supposed to manage them into a sound and solvent condition. Look up what Watt testimony has been.
Rek,
Gotta jump in on this one. You are incorrect here.
The government has infact balked on things that were explicit.
Remember they said Temporary? Well, nine-years is anything but temporary.
Remember they said Sound and Solvent? Well, i'd say not allowing them to pay back the loans at reasonable rates, and now taking all of their net worth quarter to quarter is anything but Sound and Solvent!
Sure you get the picture, they've not been honest at all. But dishonesty, according to some, is not against the law. Dishonesty is only if they get caught and held accountable. Here is were I further disagree about "judges" - they can be manipulated and can screw up. They are only human and can be influenced, sure its mostly against the law, but only if your caught and then found guilty by yet another brother judge. Not unlike the police, there are separate rules for them and for average joes. Sure, the may be written similarly, but enforced totally differently, which leads us all to the skeptical nature of the government and general "authority" as power corrupts, and absolute power, corrupts absolutely.
I'd think we are at the later stage.
So, yes, I would disagree with you and the intentions of government. They simply, can not be trusted.
I've wondered this as well sort of..
Why can't the us gov be sued Treasury/FHFA/Watt, etc. by an individual who may or may not be a taxpayer and may or may not be a gse investor asserting bad activity of somesort (let you legal folk figure that out)
Sure they'd have standing - as a us citizen. That the actions were contrary.
As a tax payer - its embarrassing to me to have our countries companies plundered by government.
Its just wrong.
Who signed the law into existence?
hmm?
What branch do they represent?
hmm?
Who does the treasury report to?
hmm?
Get it, got it, good.
All along, i've really wanted someone to challenge the constitutional nature of the set up of FHFA, its seclusion from ANY and all judicial actions its ability to self deal and the very nature of the taking for public domain that which the government did not own.
Sorry, I just see it as revolutionary to create a system whereby the legislature and the executive branch create a law that make peoples actions above judicial review.
The taking of fannie and freddie and all the RIGHTS thereto and assigning them to FHFA is cruel and inhumane its beyond comprehendable for this to occur on what has become a PERMANENT basis. Sorry, 9 years is permanent. Likely most (not all) criminals would have been released by now - not Madoff I understand, but really.... 9 years? Holy smoke that is a long time.
So, great challenge them constitutionally.
No, if you sold at a loss... its still a loss.
Also the wash sale rule is actually set to 30 days for the same or similar security.
Fannie and Freddie are in the same business (like home depot and lowes) but different entities and risks.
Unfortunately, Mr. Fisher has his facts WRONG.
I'd pass on listening to it because he is confused.
Its a nice attempt but before releasing or wasting time on something like this. Please get your facts straight.
Okay,
To C'Bull and the other fellow "don't understand dude" ...
My horrible bad.
I totally muffed this one.
While the Director can opt not to have the dividend declared and thus its not payable in the current quarter, however, and here is where i muffed....
Assets not given to the treasury for this stupid crock o shet dividend nonsense stay with the company and are carried on the balance sheet to the next quarter and the next "date of determination" and thus while not cumulative in the normal sense of typical preferred dividends, but because it constitutes assets... its, effectively cumulative, tho not due until "declared".
So, in a sense I was wrong. Although right in another and wrong for the wrong reason.
duh!
Please reference the prior message. The third amendment dividends are not cumulative to my reading thus far.
Please advise.
The third amendment - amended the pspa - in it; as to declarations of dividends and the payment thereof indicate they are quarterly. They do not contemplate a cumulative effect and therefore; as an amendment that replaces what was in the original pspa it therefore controls. In the amendment there is no mention of cumulative dividends, therefore, they are not cumulative.
If you believe they to be then please reference wherein the third amendment they so state. If you can; and they are there then I will gladly acknowledge my error in thinking. You don't have to but, when wrong i admit it.
Thus far it does not appear I am wrong. Please advise.
Best regards,
No.
If no dividend is declared none is owed.
None is owed EVER.
Dividend periods are defined as quarters under the third amendment. Once past always past. Not cumulative and no "payable is created".
Its the simple out.
IF mel opts to take it.
Yes, they can sue - but the case would be immediately tossed.
It would be like suing to receive an ice cream cone from carvel.
Just because you go to carvel does not entitle you to a cone.
In the case of fannie and freddie, pursuant to the third amendment, only in the case a dividend is declared by the board of directors is it payable for the quarter.
If, mel tells the board not to declare a dividend, then effectively there is no dividend to be paid. So, like getting an ice cream cone, not until the owner decides to give you one are you going to get it.
Then, if the period passes and the board does not declare a dividend then, none is EVER owed. They are not cumulative.
Again, as per the third amendment.
This is an easy out - if mel has the testicles to do it.
Question is - does he?
But, Nancy Atlas sure choked when she failed to consider the merits of the claim and instead went with the lemmings.
I'd like to see the judge for once, consider what is right -v what is wrong. Wrong in a sense of wrong to do whether its legal or not. Great heavens we sure need PETA on our side we'd have had a chance.
I have little faith in the senators or congressfolks. Most of them are attorneys and that makes them, about the 65% as far as intelligence goes (on average). Fannie and Freddie, need some one to come forward that understands economics, business and mortgage lending, sadly generally, as proven thus far by the judges and their henchmen few have emerged. There are those on the good side that understand the difference between right and wrong.
Lets' hope they figure it out. And if not, hopefully, they'll stumble upon it.
But counting on congress - is foolish. They only help themselves.
Nice picture no doubt.
and the thoughts added here are just as nice.
This debate should be about fannie not a pretty picture.
Sorry this is much off topic.
An interesting point to argue is the concept of temporary. Conservatorships by their nature and thru HERA are supposed to be temporary as opposed to "long - term". In the business world, prior to HERA, temporary use to be pretty much anything not long term. Whereas under most definitions, including the tax code, long term is a year or longer.
Thus, perhaps we have a new definition of temporary and long term. Which really weren't suppose to be the same thing.
Next time some one gets in a pickle with the treasury, just tell them you'll get back to them as the delay is only "temporary". Nine years temporary.
Whatever,
I know what Net Worth is comprised of and I have told you this "capital reserve" concept of yours is a fiction. A fiction is something that is made up. In your own presentation, you've noted it as a "defined term" contrived by government. True net worth, the net worth of anyone or entity, even yourself is Assets minus Liabilities. Its what you got -v what you owe.
But again, whatever.
Net worth is equity.
if all liabilities are exhausted
Assets = Net Worth
in the concept of Net Worth there is NO Capital Reserve - that is a fiction.
Thus..
To me this Net Worth Sweep IS defacto liquidation.
Okay,
Assets = Liabilies + Equity
Equity = Common Stock + Preferred Stock + Retained Earnings
Retained Earnings is cummulative (Income - Expenses)
So on a quarterly basis...
Income - Expenses = part of equity.
NWS = NET WORTH
Net worth = Assets - Liabilities.
Effectively that is what this is...
Any Total Assets > Total Liability is taken.
Here is the deal.. at some point in the future the conservatorship has to end.
When that happens... and it will.
Yes they take assets equal to the amount of Total Assets less Total Liabilities.
ie. cash!
They own nothing.
If they've yanked out all the equity then A-L = 0
Thus equity is 0
If they can't legally own them, then they can't exercise them. They'd have to own them 6 months as you note, then even flipping them is a no brainer (ie not possible) and per the pspa only treasury can exercise them also, as a 10% effective owner or more they'd have disclosure requirements.
Thus, effectively, the have no value meaning they are worthless and aren't viable commodity.
If this is true... based on what you wrote
Section 16 is an SEC requirement that any time a specific class of owner buys or sells stock, they must wait at least 6 months to sell the stock after it is purchased. The Treasury would fit into this requirement were the warrants to be exercised.
Then, the warrants have no value.
As per the agreements only Treasury can exercise them. And if what you wrote they have to hold them, and because the government can't own shares in the companies, then, therefore, they can't be exercised and thus have no value.