Joshua 1:9 Have I not commanded you? Be strong and courageous. Do not be afraid; do not be discouraged, for the LORD your God will be with you whereve
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Yes, I was worried about him too. Working those double shifts at Burger King and eating all those Costco hotdogs.
He liked posting here a lot. I'm thinking maybe he's in IHUB jail or suspended for a period of time.
I was just on Facebook looking at the last post on "Fannie Packers" and my cursor just happened to mouse over the "seen by 54" low and behold......... Rick Nagra... He's still kickin.
https://www.facebook.com/groups/266253616914518/?multi_permalinks=877793359093871¬if_id=1516753182991708¬if_t=group_activity&ref=notif
Yep, That's the way we've got it figured.
Yep.... Old Mnuchin and Watt are just waiting a little bit longer. They have to let everyone see that they were given their chance to do it Legislatively. When they stub their toe, it will be just like a cobra striking. Then it will be over :)
Exactly right. This shows Corker and Warner are getting desperate. This plan would go against FHFA proposal and there ain't no way Treasury would support this. Plus we know they don't have the votes to get anything passed. So they can forget all their liddle plans...
IT IS GOING TO BE ADMINISTRATIVE!!!
A copy of Judge Sweeney’s scheduling order entered this afternoon is attached to this e-mail message. Judge Sweeney directs that (a) amended complaints be filed by Feb. 22; (b) motions to dismiss be filed by June 22; (c) responses be filed by Sept. 20; and (d) the government’s reply be filed by Dec. 19. Judge Sweeney’s order also denies without prejudice the government’s supplemental motion to dismiss (Doc. 161) that attempted to segregate shareholders based on the dates they acquired their shares.13-465-0396
She is stretching this out all year long. I hope we get to see some of those documents soon.
She dismissed the supplemental motion.... I think our future will be decided before all this plays out.
I don't want a speedy trial until I get the documents. That's the only time he seems to rear his ugly head is when documents are about to be produced.
From jtimothyhoward
Sean
January 11, 2018 at 11:13 am
Tim,
Tim Pagliara claims on Twitter that Mark Warner pulled out of working on GSE reform with Bob Corker. Have you or anyone else heard about this or have details?
Sean
jtimothyhoward
January 11, 2018 at 11:33 am
I hadn’t heard that, but it wouldn’t surprise me. Tim is a reliable source who is well plugged in, and Warner has new issues he’s been focused on recently that are more politically promising for him, and also don’t involve potentially putting 5,000 employees in his district out of work.
The 60 day "quick peek" should have ended yesterday give or take. The date of this order was Nov 9th.
Thursday November 9th 2017
New filing in the Fairholme case, click here to view.
Peter Chapman writes, "The parties presented Judge Sweeney with a proposed order establishing a quick peek protocol that, within the next 60 days, will bring jurisdictional discovery to an end or result in Fairholme filing a third motion to compel."
6. Further Court Involvement
If the parties are unable to resolve their differences regarding any of the remaining documents being withheld by defendant on privilege grounds, plaintiffs may file a motion to compel production any of the remaining documents that plaintiffs choose within 7 days of completion of the informal consultation discussed in paragraph 5.
7. Further Challenges by Plaintiffs
Plaintiffs shall not make any further challenges to documents or parts of documents, other than those addressed in the provisions of paragraphs 5 or 6 above, until the Court has resolved defendant’s motion to dismiss.
IT IS SO ORDERED.
s/ Margaret M. Sweeney MARGARET M. SWEENEY
http://gselinks.com/Court_Filings/Fairholme/13-465-0394.pdf
http://gselinks.com/Court_Filings/Fairholme/13-465-0393.pdf
This ruling was a big win for us back then. Many had forgotten about it. It is just as true today as it was 22 months ago.
Fannie and Freddie are private companies
Judge Sleet made an error in his ruling.
Our day will come.
Wow...Looks like some people are getting ready to go to jail. I hope Corker and Warner are on the list.
I agree with most of your post. Jumpstart has expired and Mnuchin will want to give the full appearance of letting them have some time to come up with a fix. What they are leaking to the media is in no way a fix and he will not support anything of the sort. After a period of time, if they have nothing else he will take over and it will be done administratively.
This is what I believe will happen. I don't think Corker and Warner can get anything thru. They are both toxic!!! Plus Trump hates Corker and he's not going to let him decide such an important piece of legislation just so Corker can give shareholders the shaft.
We still have a few big dogs left in the hunt. Lamberth, Sweeney and SCOTUS (if they grant). Also the Minnesota case and appeals.
Best bet may be Mnuchin and Administration.
Either way I am long. I am a long 4 z ride.
I think the odds are much higher than 50/50 now. In our favor.
We now know that F&F are here to stay.
The benzinga article the other day calling for 98% dilution is insane. First of all, if they dilute that much the lawsuits are not going to go away. If anything it will put the government in a real bind. We have lawsuits before the Supreme Court, that they are very likely to hear. If the warrants are executed and dilution has occurred and the court rules in our favor, what happens then? It would be a bad situation, not pretty at all.
Mnuchin and the Administration will not be onboard with this scenario, because if they did pass it (which I doubt) Trump would not sign something like this from Corker and Warner.
And yet here we are... and something needs to happen soon.
I am/we are long FNMA.
In my "humble opinion". The administration is not going to like the plan Liddle Bob Corker puts forth. His plan will be DOA (dead on arrival). Therefore, It is going to be an administrative fix.
Here are a few comments from JTimothyHoward and I have a question.
Does the "pay as you go waiver" mentioned in the last comment affect when our payment would be due?
ruleoflawguy......................................................
December 21, 2017 at 10:36 am
trump to sign bill 1/03/18. i take it this defers the accounting treatment one quarter, no?
jtimothyhoward....................................................
December 21, 2017 at 2:13 pm
I hadn’t seen that. But, yes, if the bill is signed in January, it will become a first quarter event. That’s a good thing. With the three billion capital buffer, whatever the retained earnings are from the fourth quarter (which would be scheduled to be swept on March 30) and the first quarter’s earnings, Freddie should certainly have enough capital to handle its DTA write-down, and Fannie’s becomes much more manageable. By the end of March both companies should have a decent idea of what their first quarter 2018 earnings will be. If Treasury wanted to avoid a draw, it could defer the March 30 sweep and let the Freddie and/or Fannie use those earnings to offset the DTA write-down. It wouldn’t make a lot of sense for Treasury to sweep the fourth quarter earnings on March 30, then turn around when earnings are reported in late April and extend a draw that’s smaller than the earnings that had just been swept–unless Treasury really wanted to get people spun up about another “bailout.” Again, we’ll have to wait to see how this develops.
Brolin Walters™ (@BrolinWalters)..................................................
December 21, 2017 at 5:58 pm
Tim –
You’re almost spot on with your $11.8B draw.
They filed an 8-K today with an estimate of $10B. What’s $1.8B between friends?
“This will result in an estimated one-time charge through our provision for federal income taxes of approximately $10 billion in that period.
We expect this charge, combined with the restrictions on the amount of capital we are permitted to retain, will result in our being required to draw from Treasury under our Senior Preferred Stock Purchase Agreement with Treasury.
Our expectations are based on assumptions relating to a number of factors, including the value of our deferred tax assets as of December 31, 2017. Upon drawing funds from Treasury, the amount of remaining funding under the agreement, currently $117.6 billion, will be reduced by the amount of our draw.”
https://www.sec.gov/Archives/edgar/data/310522/000031052217000432/a8kdecember2017.htm
jtimothyhoward....................................................?
December 21, 2017 at 6:36 pm
Well, that’s that, then. (As an aside, $11.8 billion is “approximately $10 billion;” we’ll see what the actual number is next month.) And $10 billion won’t be the amount of the draw; Fannie should have pre-provision earnings of between $4 and $5 billion, making the draw more modest. Finally, given the lower corporate tax rate going forward, Fannie should earn back its approximate $10 billion DTA write-off in between four and five years–after that, the 21 percent tax rate will be a pure benefit for the company.
ruleoflawguy......................................................
December 21, 2017 at 10:36 pm
read now that potus signs both stopgap CR funding and tax reform 12/22 since CR has pay as you go waivers
?
You're exactly right.... and the bit dogs have hollered.
This is all I could get. Need a scrip...
The U.S. Chamber of Commerce said Monday that an attempt to oust Mick Mulvaney as acting director of the Consumer Financial Protection Bureau would raise "grave questions" about the constitutionality of the consumer agency.
The Chamber wrote in an amicus brief that CFPB Deputy Director Leandra English's legal effort to have Mulvaney removed from his job running the bureau would represent "an unprecedented limitation" on the president's constitutional authority to appoint and remove the heads of federal agencies.
They may be.... I like our chances in that court also.
We're lookin pretty good. I think
We should be getting near the 60 day end of the "Quick Peek". Plaintiffs hopefully are challenging the bulk of their claims of privilege. She will then do the thing we have all been waiting on. Rule on the motion to dismiss.
I think there is a strong chance she will deny that motion. Though not a slam dunk, but the Court of Federal Claims is the court that was established to decide issues such as ours.
The main reason I think this is because, Judge Sweeney in her past rulings during discovery (which have been favorable for us) has in her opinion included some pretty colorful quotes that indicate to me that she sees thru the GOV lies.
Also, Judge Sweeney has reviewed the documents and was going to deny the "Presidential privilege" on that the Mandamus Court later overruled her and granted. Yeah she's seen those!!
Now those documents must have been some serious stuff....
Oh so the house has passed it... Sorry Chief I thought it just passed committee yesterday.
I said they will not attach to the "tax bill" and they won't.
It is not in the bill... At least not yet. If you can prove otherwise. Go for it.
I don't believe it is attached to the tax bill. That would hurt their chances of passing it. Can you provide proof that it's attached to the tax bill?
"We" your we doesn't include me. Their not going to attach anything to the tax bill. I want the tax bill to go thru. Corker save us??? If Corker gets his wishes we will be at 0 <<< Zero.
I just heard it reported that Corker is still a no vote for the tax bill. He sure is "sore" about something. I believe its about the GSE's. That's all he really cares about. I don't believe they will need his vote.
I hope the door hits him on his way out.
Man that Kip and Potty coming with the good news. And Glen. I've been hoping something like this would happen...... Awesome!!
That's awesome man. We are blessed. Nothing makes you feel as good as giving.
Corker is trying to slip the Jumpstart 2.0 into the spending bill. I'm thinking it's a good time for the smackdown. President Trump hates him. Corker is toxic. Time for Treasury and FHFA step up.
Even if he does get it in... Treasury and FHFA can still do a 4th amendment.
And this bill to stop the contribution to the "Housing Trust Fund" if a full sweep payment is not made. This could be a violation of HERA???
What's happening with the "Quick Peek"?
They can write them.
But they can't pass them.
In my opinion, Corker Warner and Hensarling are not going to have any say on the matter. They have yet to get any plan out of committee and this one will be no different. They would also have to have the blessing of the administration......... They have had years, and we have nothing.
I think once Jumpstart expires Jan 2 2018 FHFA and Treasury will take the bull by the horns. The capital buffer has to be addressed before the end of March and once they stick their toe in the water it will be fixed administratively.
Lol ok I guess that is illogical.
Let me tell you a little short story:
I have always liked Mel Watt. I have tried to hate him, but I can't. Mel Watt is from my home state of North Carolina. I used to work at UPS for many years (in NC) with a guy who looks just like him. His last name was Watt too. What a great guy he was, funny and loved by all. They could have literally been twins. Every time I see Watt on TV or a video clip all I see is my friend. By that same logic I believe my friend Watt is going to save the day.
P.S. I'm a Republican too. I know it sounds crazy, but it is true.
Agreed. This is completely irrelevant. I don't understand why he would post such a thing...
I'm posting this comment (below) from a poster on Tim Howards message board. I have great respect for Tim Howard. I'm not sure if Tim is in common or preferred, but what I want to say is if you are in common and are ready to just accept the Moelis plan you should have been in preferred to begin with. We have taken on a tremendous amount of risk owning common. For years Gov "had" been trying to kill us. We now have a new administration and things are looking better. I'm not here touting AJP or $1000 share price. There are more ways than 2 (Moelis or AJP) to skin a cat. I feel that I am owed a fair price for my stock. Whether it be $20 $40 or $80 or somewhere in between so be it. But $9 ain't going to cut it for me and many more like me. If they execute the warrants they will see plenty of lawsuits.
Dear Mr. Howard:
I so appreciate your writings on Fannie Mae, Freddie Mac, their conservatorships, and the ongoing mortgage finance reform efforts by government officials and industry operatives. Each time I come away from one of your articles, I have a better understanding of the competing forces involved in the future outcome of these two shareholder-owned enterprises.
As you and the rest of us like-minded folks know by now, the conservatorships of Fannie Mae and Freddie Mac were a convenient fraud perpetrated by the Washington-Wall Street elite using the 2008 financial crisis as the perfect curtain for their Wizard-of-Oz illusion. Neither company was undercapitalized at the time their boards were coerced into agreeing to the conservatorships. And, when the companies were finally placed into conservatorship in September 2008, not one single criterion required under the Housing and Economic Recovery Act of 2008 (“HERA”) that authorized the appointment of a conservator, was met – not one!
Moreover, the companies were forced by government officials to record unsupportable loan loss reserves (which, as expected, never materialized) that required Fannie Mae and Freddie Mac to borrow large and contractually unrepayable sums of money from the U.S. Treasury. This ultimately required them to borrow additional and unnecessary funds just to pay the egregious 10%/annum interest payments required under the original Senior Preferred Stock Purchase Agreements (“SPSPA”). Incredibly, they had to pay interest on money borrowed to pay interest – until the third amendment to the SPSPA changed all that. Now they hand over nearly all their earnings to the government – UNABATED.
According to everything I’ve read, the companies “borrowed” approximately $187.5 billion but have returned in excess of approximately $265 billion – a 77.5 billion-dollar undeserved windfall for the government, over and above the money received through the U.S. Treasury’s interest payment shenanigans.
Now, almost ten years later, we have the Moelis plan. I must confess that I haven’t read the details of the plan, but I am aware from reading the opening bullet points and executive summary that it not only permits the U.S. Treasury to keep ALL its ill-gotten gains obtained through these illegal quarterly earnings transfers, but it goes on to unbelievably encourage (NOT DISCOURAGE) the U.S. Treasury from exercising its warrants in order to seize another $75 to $100 billion dollars of shareholder money. If the Moelis plan is operationalized and the government is allowed to walk away with and/or squander (and I’ll be kind because I know it’s a lot more) approximately $177.5 billion (excess repayments + warrants) of shareholder equity, without regard to the common and preferred shareholders (the true owners of the two companies), then it’s going to be yet another FIFTH AMENDMENT TAKING – and make no mistake. It. Will. Be. Challenged.
But, setting aside the unconstitutional and grovel-like aspects of the Moelis plan for a moment (and I say “grovel-like” because this plan is the perfect and bigger-than-life example of the schoolboy having to hand over his lunch money to the bully, just so the bully will relinquish the schoolboy’s things) their blueprint calls for the two companies to build a combined core capital balance of approximately $155 billion, which will help to qualify the firms for release from conservatorship under HERA. For arguments sake, I’ll assume that figure is appropriate. But I see a better way of accomplishing this goal without infringing any further upon the constitutional rights of the shareholders – including (if not particularly) the current shareholders that purchased and, thus, assumed the rights, risks, and rewards of the common and preferred shares of Fannie Mae and Freddie Mac from willing and able sellers of the companies’ shares.
First, forensic accountants need to unwind the history of the borrowings and payments made between the companies and the U.S. Treasury since September 2008, in order to eliminate the payments of interest that included borrowings based on past borrowings of interest (since in-kind payments were allowed) and not principal borrowings (even though those are based on fraudulent loan loss reserves). I suspect this will produce approximately $30 billion in overpayments to be returned to the companies. Second, FHFA needs to declare the U.S. Treasury repaid at $157.5 billion (or less, if the Honorable Director Watt is truly honorable) and, thus, the senior preferred stock fully redeemed. Third, the $77.5 billion of obvious overpayments is to be returned to the companies. And fourth, the warrants are to be extinguished, since they are no longer needed for repayment of the debt owed to the U.S. Treasury and, more importantly, the American taxpayer.
If my math is correct, that leaves approximately $47.5 billion needed to complete the “capital build.” However, the companies need to include approximately $33.3 billion in the capital build figure to retire the preferred shares at full redemption value. That brings our remaining total needed for full recapitalization to $80.8 billion. So, how do we fill our 80.8 billion-dollar hole? Through retained earnings and the issuance of new preferred shares.
According to the Moelis posse, the companies will earn approximately $15 billion per year. By the end of fiscal 2020, they will have retained approximately $60 billion. Also, Moelis & Friends estimate that the two firms can raise $25 billion through a public offering of non-cumulative preferred stock. So, where does that leave us? With a cool $4.2 billion of extra capital and no need to issue any additional common shares beyond the original, undiluted amount displayed on their balance sheets.
Surprise, surprise, surprise. The preferred shareholders rightly receive full redemption value for their stock, and the common shareholders won’t have to share the future earnings of their two companies with any new owners. It’s rather amazing what can be accomplished when one points out that the king is not wearing any clothes.
A few additional thoughts. No plan will succeed to garner the support of private equity, like me, if the government continues to behave in such a flagrantly, mean-spirited manner as it has over the last ten years towards the loyal and steadfast shareholders of America’s mortgage finance giants, Fannie Mae and Freddie Mac. Moreover, the government is NOT in the business of business because of its overwhelming advantage (e.g., endless resources, perpetual existence, etc.) in the marketplace, and they have NO business trying to make a profit for the taxpayers. They need only recoup the costs of their public-interest efforts on behalf of the American taxpayers (of which I am one) – PERIOD!
Thank you for allowing me the opportunity to contribute to the discussion on The Economics of Reform, and thank you for everything you’re doing to save those companies.
Best regards,
Bryndon Fisher
Corker turned against the President back around the time of the hearing in May when he said that "something has changed" Lol
Killing the gse's is all he really cares about and he knows he is not going to get his way.
Last report I saw McConnell has the votes. Looks like Corker is probably the only holdout. This speaks volumes!!
ICBA calls on FHFA Director Mel Watt and Treasury Secretary Steve Mnuchin to end this destructive sweep of GSE earnings and to allow both companies to begin to rebuild their capital buffers to avoid another taxpayer bailout.
Washington, D.C (Nov. 30, 2017)—Independent Community Bankers of America® (ICBA) President and CEO Camden R. Fine released this statement on reports that the Federal Housing Finance Agency is meeting with the White House on the ongoing sweep of Fannie Mae and Freddie Mac profits to the U.S. Treasury.
“Fannie Mae and Freddie Mac last month reported more than $7.7 billion in third-quarter net earnings, all of which would be swept into the U.S. Treasury before the end of the year unless the Federal Housing Finance Agency directs otherwise. With this latest profit sweep, the government-sponsored enterprises will have transferred more than $280 billion to the Treasury since 2013—nearly $100 billion more than the capital infusion they received during the Wall Street financial crisis.
“While this arrangement has been a great investment for the Treasury and has compensated taxpayers handsomely, both companies will enter 2018 with zero capital to protect taxpayers and support the mortgage market unless Washington acts. ICBA continues to call on FHFA Director Mel Watt and Treasury Secretary Steve Mnuchin to end this destructive sweep of GSE earnings and to allow both companies to begin to rebuild their capital buffers to avoid another taxpayer bailout. Community banks depend on the liquidity that Fannie Mae and Freddie Mac provide, as do American homebuyers.”
About ICBA
The Independent Community Bankers of America®, the nation’s voice for more than 5,700 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.
Thanks action8101
http://www.icba.org/news/press-releases/2017/11/30/icba-statement-on-gse-profit-sweep-discussions
Thanks for posting this video. This entire hearing was epic. I made this video shortly after the hearing. Please turn volume up.
I agree with you on that. We know how Joe Light is going to spin it. I bet there is very little if any pushback. "Smaller footprint" doesn't sound like much of a fight to me. Watt said long ago he was working with Treasury.