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I've emailed my senators and congressperson as well on fandf. Did this back about 6-7 years ago. Got canned responses from them that were little more than uninformed drivel.
Quite frankly, there responses were embarrassing.
That's a nice pictorial but the numbers aren't right.
FandF only got around 150B or so in "funding" the other 37B was interest.
So for 150B the government was paid 97B or so thus far. Not 60B
Also, it should show that the conservatorship was brazen and was foreced upon the directors of fandf; such that management was fired. And then the FHFA (Gov) entered into this SPSA with Treasury (Gov) as a inside steal.
They should tell all the truths. Not just part of it.
Rek,
Sorry you didn't get the tongue in cheek
"And yes the judges have said Watt can pretty do as what ever he wants to without judicial consequence as long as its in his role as conservator."
Post.
Watt, can just up and decide not to allow fandf to remit the $$ to treasury as - in his role as conservator or receiver he so decides.
Now, there could be consequences, but he'd have 10B to decide them.
As for what has Watt done wrong.
Simple - he has failed us as shareholders.
He has been given the opportunity to say there is some beholding to shareholders, some duty some obligation. And now that the perry judges have ruled there is some. He looks like a shill.
I still think the Perry ruling was a vindication for the shareholders, it was a WIN.
Wonder why others, can't see it.
I saw the deloitte plaintiff figure it out. Eventually others will.
Its a crack in the dam. Eventually, the pressure will build and the whole thing is gonna fail.
Its, started!
Cap - if you look at my post i mentioned both companies ie... 2 . FandF.
10B for 4th Q 2016.
In 9 Months we'll be at mostly the end of 4th Q 2017.
So i figured in 5 quarters... they'd maybe accum 30B+ combined.
I figured 30B would be about 1/3rd what combined would be needed.
Where i went wrong was saying 10B was 12% when i should have used 8%
My bad.
So, yes, its feasible.
Rek,
Watt as conservator - can do what ever he wants or may do as conservator to act as conservator - and that is WHATEVER - as per what the PERRY ruling said and those acts can not be challenged by any court; because his actions as conservator are beyond the reach of the judge.
Now, I personally think that is BS; but, hey that's what the judges ruled.
As for Watt, I don't have a very high opinion of him. He's probably a good person mostly, but he's just not been of value in this situation. Actually, probably, part of the problem and likely should retire for the good of the country.
10 Billion is 12% of what folks have bantered would be needed to cap these two. And that was created in just 1 quarter. In just a 9 months at this rate ie. December 31, 2017 they'd have combined $30B saved up (may have) and that'd be a healthy start.
Momma always said, what will should be and eventually will be should be immediately.
Why wait?
Sure he does.
Perry just said as Conservator his actions as conservator are beyond judicial review.
So, he could just keep the sweep money and say... beyond judicial review.
That is the simple literal writing of Hera that the judges allowed and codified.
Now, i realize this is a silly interpretation, but that is ostensibly what those two judges wrote.
Personally, I believe, yes my belief, that Perry ruling re-wrote the definition of conservator to mean anything goes.
This is crazy nuts as; if i were a conservator for someone elses property, using the Perry definition that was upheld, i could just write me a check for the net assets of the entity and let the liabilities and equity be - well good luck to them.
My belief is the perry ruling is fraught with problems.
But, someone obviously paid off the judges to get them to go with such nonsense.
Not till recapitalized their regulators will keep them in conservatorship and not pay the divi until they are ready.
Then it could happen
Rick you asked about his writing and i have to tell you i have cautious optimism.
Many have over the years started leaning more to my thinking.
- First it was the value of what FandF do as importance to the housing market
- then it was the obvious loan loss shenanigans
- then it was the rate being charged 10% -v the 3 % tarp or even 1% fed funds rate.
- then it was the warrants and the fact that 80% ownership to treasury at or for free was obvious taking
- and now Tim Howard is / has begun to write that only a settlement will absolve the government of the chicanery.
There have been more along the way but those are the key ones and people have finally come around to my thinking. Its been nuts to have appeared to be right all along.
So, as to valuation. Recapitalization, the only way to do it - to do what is right and end this litigation is settle. Settle a class action lawsuit and let the cup fill up and that will create the value and ultimately the ability to raise capital.
But very first there has to be a resolution.
This is exactly what i pointed out after the ruling.
That the perry ruling indicated that ALL did not mean ALL as spoken by the defendants' counsel.
That Perry ruling recognized the rights of the shareholders.
Rick,
In the most conservative option noted - it would include capital of $60B which it does not have today.
Meaning, the entity would earn profits on that $60B by another 3-5B per year.
Thus, compounded, realistically, the Net to go around would be higher by about 20-30% so the $15-20 depicted could be $20-$25+ in 6 years.
The effect on the higher ended multiples of the $60B capital contemplated would be icing.
JMack
Navy,
What do you make of the second note
if there is any misunderstanding give me a shout- glad to loop you into cap markets folks to clarify .
Who are the cap market folks he references? Seems like it infers he is leaking or telling information to "traders" or capital market makers or some such?
Is this a smoking gun of impropriety?
This isn;t about consumer safe guards.
Its about the rule of law.
Do you really want to live in a nanny state?
Free FandF and do it now!
The sad this is eventually the government is going to have to face the facts that it did the nasty here and cough up cash.
The very sooner this happens, the better for the current admin, as it can put blame squarely on its predecessors thing 1 and thing 2. AND distance themselves from it by taking responsibility for reinvigorating the economy with a $300+ Billion dollar stimulus (the economic impact of releasing from captivity) fandf.
Also, the sooner its done the sooner it will be - behind the admin and frankly, due to time value of money cost it less and do more good with all the $$ in circulation and taxes collected from people spending money.
It will be a real plus for new job growth and horribly positive.
I find this type of stance to out right intentional planned theft by the government with its police state powers to be "criminal" in my mind. If not treasonous.
TREASON - In law, treason is the crime that covers some of the more extreme acts against one's nation or sovereign
In many ways the lay definition of conservator has changed.
Similar to the concept of "Police" - we all have our very own thought of what police can and can't do. Or should and shouldn't. Sure, its spelled out in some law some where and written down by some 2 year aspiring law grad writing this - but to the far and many, if asked the concept of "police" will migrate to an average thought.
Similar to conservator, many believe the concept is; as I've been lead to believe in general that that individual or appointee would work in the best interest of the entity being conserved - thus the word conservator. For the benefit of those they owe duty to; being whomever;
But, in this case that concept has largely been abandoned to instead be as interpreted by the judges as anything goes, pursuant to no constraints of Hera.
So, in my view, its a re-write of the conceptual job duties and description of what a conservator is and what they may or may not do.
Which is what you wrote The definitions provided above and below are not related to the use of the term conservator or conservatorship in HERA 2008 its more or less a redefinition of the word pursuant to a written law that took well heeled words and twisted them. They've taken a regular word and altered the definition for purposes of the statute.
So, have these two judges effectively redefined what a "conservator is and what a conservator can do under the typical" definitions?
con·ser·va·tor
k?n's?rv?d?r,k?n's?rv??tôr,'käns?r?vad?r/
noun
noun: conservator; plural noun: conservators
a person responsible for the repair and preservation of works of art, buildings, or other things of cultural or environmental interest.
US
a guardian or protector.
"the court does not need to appoint a conservator to handle an incapacitated person's affairs"
Seemingly, that is what has occurred.
If this is the situation, shouldn't judges everywhere be scared?
What is worse, what does that portend to society as a whole?
I guess this definition of a conservator no longer applies, either.
conservator
n. a guardian and protector appointed by a judge to protect and manage the financial affairs and/or the person's daily life due to physical or mental limitations or old age. The conservator may be only of the "estate" (meaning financial affairs), but may be also of the "person," when he/she takes charge of overseeing the daily activities, such as health care or living arrangements of the conservatee. The process is that a relative or friend petitions the local superior court for appointment of a specific conservator, with written notice served on the potential conservatee. The object of this concern is interviewed by a court-appointed investigator to determine need, desire and understanding of the potential conservatee as well as the suitability of the proposed conservator. An open hearing is held before the appointment is made. The conservator is required to make regular accountings which must be approved by the court. The conservator may be removed by order of the court if no longer needed, upon the petition of the conservatee or relatives, or for failure to perform his/her duties. (See: conservatee, guardian)
The value of the taking is the fair value of the future discounted cash flows and terminal value; plus the cash flows taken that has been removed from us.
To me that number is quite high; even net of the preferred stock at par value.
If the government takes 80% ie the warrants they "gave" themselves for what will be no consideration we start there.
Since that value has been taken and accounting rules show the dilutive effect of it; that claim is ripe, now. Remember you don't have to take the full bucket of fries for it to be a theft. Taking just a fry is depriving me of access to my assets and its fair value.
Boom.
Pay me!
Similarities between Fannie Mae and real life.
So, I was reading my email and a cousin of mine shared this story with me.
Its a story of an elderly woman - who has been around since the great depression, that has had total strangers fleece her. Sound pretty familiar? Yep, after years of hard work and a lifetime helping others, she was conned into signing over rights to another. Sound familiar? And the good body then proceeded to take all her money, sort of like entering into a contract she didn't need and then well taking her "net worth".
This is a very sad story. But, its true. And the paper down in GA is all up in arms about it. Very sad story.
Mash - over there to read http://www.myajc.com/news/crime--law/cobb-widow-taken-for-millions-sparks-debate-over-elder-abuse/sv63RNcIarH5LpEKNDd5BP/
No obviously, I feel very sorry for this 95 yr old women. And, yest those that did that to her should be held accountable. But, I also, feel that those that have raped and pillaged Fannie should be held equally accountable as there heinous crimes need to be exposed with the same fervor as that Atlanta article.
Makes me very mad!
Where is the outrage?
rem and chess..
Understand that i am not a proponent of obmascare or the unaffordable care act, however, what roberts reasoned was that like the faa, that says no taking liquids on plans, they don't tell you - you can't fly - they tell you if you want to fly you have to leave the banned substance on the other side of the fence.
the command to buy health insurance of their liking isn't so much a command to buy it as a tax on you if you don't. Thus its your choice to buy it and not pay a tax or to not buy it an pay a tax. Yes, its counter thinking and to me; its a command to purchase something that i don't want to or at a price i don't want to pay if they don't offer what i want to buy. By limiting the choice they force one thing or another.
Now, how does it relate to fannie or freddie, its, really just another way the judicial system has absolved themselves of thought and alllowed things that are seemingly in appropriate. Why would anyone think that conserving the company or working in their best interest as conservator would involve entering into transactions like a 10% interest rate, or 80% warrants or a net worth sweep that could ever be seen as within the scope of ones duties. Since, their duties to run the companies does not include running it into the ground. Its a foriegn concept.
Now, from my take, the fact the perry appeal granted the shareholdes some rights, blows up the government's and fhfa contention they owe no duty to the shareholders, and of course no rights to them. Its a legal opinion - as they go - i have a rather large disdain for the "law" cause it twists in the wind and normally comes out on the side of government or thine with the bigger pocket book. So, its crase and disgusting to have the judges be so high and mighty to allow this type of taking. Personally, i have little to no use for them.
Do the right thing.
People still don't get it.
Half truths and half wrong.
https://finance.yahoo.com/video/fannie-freddies-future-likely-hands-124500566.html
David Stevens at Mortgage Bankers Association... still harping on misdirection.
We can not have more Government Gains at Tax payer losses. We can not go back in time and forget that the GSE's were stuffed with 160Billion dollars, they didn't need to support the housing industry.
They are private companies that got caught up with government Greed.
Come on David, get it right!
Enough already.
Shareholder rights AFFIRMED by the Perry Decision - Rocks underlying claim of no Shareholder Rights claimed by FHFA under HERA.
Shareholders, in a mixed decision were awarded their first victory in this fight. All the Sweeney things have been on motions for discovery, etc. not real precedent setting.
But now in the Perry Decision, shareholder rights were upheld. So, apparently all doesn't mean all.
That should be the news at 11!
Question is will Roberts - cross over again - like he has on several other sensational rulings, and assuming a 5-4 conservative judicial after the new guy is sworn in.
If so, then an appeal to SC will - after another three years result in a win.
Will we have to wait another three years?
I hope not.
But, so be it.
BTW ...
Today's ruling was a WIN for shareholders - their first even partial win.
They won acknowledgment of them having "rights".
This throws the primary ruling in jeopardy rights is rights.
how odd.
Yep, its sad....
But, not the end of the world.
Lots of positives out of the perry ruling. Basically, it is actually the first WIN for the shareholders.
Yes, a WIN!
It was the very first time shareholders of any kind (both preferred and common) provided with contract rights.
What those contract rights may evolve into is not determined.
But evolve they will.
Because now, shareholders have rights!
So, say i was the ceo of a $100M company. Just say.... so, i could write an agreement that gave me all the net worth forever in return for say a noncancelable management agreement?
Well shet, sounds like legalized theft?
Why bother taking money when if you write yourself a contract giving permission, you are golden?
OB1 and Reck,
Its unfathomable to comprehend that the government or anyone could write an agreement between themselves that take the rights and money (assets) away from others, when they are charged the responsibility of due care and taking care of them.
Its like, heck if i oversaw the assets of another and wrote an agreement between my self to give me all their assets, that it would ever hold in court. Like, being appointed a guardian and then taking all the money?
Its just simply beyond comprehension. Sure, how could the law allow that? Seems simply wrong. However you reconcile it or explain it; its just wrong.
I realize the judges weren't posed with the question of right or wrong in the "simple" minded, in kindergarten or on the play ground but by the law. And they are saying the law allows - veiled theft.
How can this type of ruling be used in the future by other unscrupulous villains and perpetrators?
What would keep for example, CBS, Inc. Parent company Viacom, from writing an agreement that for $1 and other good and valuable consideration it pays all its net worth to themselves as a dividend? Has these two judges said that's lawful?
Finally, how could they remand a claim of the shareholders, if they said government has all the rights of shareholders. Seemingly, by their word, all is all is all, so how could there be a remand of something, when all was all of all? Seems, conflicted? Either it is or it isn't, and what they are saying is that all is all including the benefits of the 5th amendment claim?
There is the confusion, is all not all? since there was a remand?
If all wasn't all, then don't they contradict there very own ruling?
Not giving up, as right is still right. But, sure makes it harder to believe or trust the government. They may be thieves.
J
Remember its not a race but a journey.
Be wise along the way, love and live.
FandF should provide a good start. The metrics are there and there is amble reason to believe that fair value will return. It really depends upon how GREEDY the us government is and whether they still support the tbtf banks in trying to corner the retail mortgage market by kicking all the community banks to the curb and force small town usa to borrow albeit through money center banks because they'll have cut off the small town lender and their ability to access affordable capital to sell their loans to.
You see, it was the fact that TBTF banks needed more market share that caused them to create the facade of a spiral; which needed liquidity and forced their bad loans on fannie and freddie and saved their bacon as they crushed the community banks and their investments in "preferred" stock that made up the core capital of small town, usa banks.
Nifty move. But it didnt work.
J,
I am in the $125 Camp. Have been for so long. Sure I was previously dreaming of larger numbers but $125 is a fair deal.
It allows a recap of without flooding the share base, provides for a decent raise and some dilution of newly issued shares.
As noted previously, my figuring is a settlement of a "class" action suit thereby all share holders can be addressed at once. Only way to do this is with that type of settlement and I still believe the larger players doing a side deal.
But end it Trump will. This is not going to go on for another 8 years.
What the analysis does not include is the value in return for the $60B retained capital. Which should yield another 3-5B in net income per year.
So, either way in Tim's analysis the Share price is perhaps 25% more.
Thus the range should be greater.
But, for the same reasons he concludes that the fight over the warrants would prolong the finality, I too have reasoned for so long that the warrants would have to go the way of the west, otherwise they matter at hand can't be resolved for another 10 years.
Thus, I still believe the warrants are dead, and my only guess is the big fishes are going to have to settle this with some side agreements, plus a big NDA.
Peace!
you do but only for a short period of time.
eventually those opprressed rise up on ceasar
smart people know that
which is why fannie and freddie are a win for
the rich, the middle class
and the poorer
its what allows the poorer class to move upward in our society and why capitalizm works and socialism does not.
The concept of "killing" the middle class is - not intelligent.
Why would you want to "kill the middle" class when that is who you sell to?
I mean its the middle class that buy goods and services the elite control and sell?
Why sell a hammers for $2 each and make 10c profit when they can sell the upscale version for $9.99 and make $3.00 to just as many people?
Thus, i see the value in Fannie and Freddie allowing the middle class to become stable and keep the masses at bay. Keeping the people well feed and working creates economic and political stability and that is exactly what Fannie and Freddie do.
It allows the people to have their subdivisions, their back yard barbecues and keeps civil unrest down.
If people are working they are not assembling and protesting and causing upheaval.
Fannie and Freddie, provide for this by allowing access to leverage to buy homes and become "part of the working" class. The working class; the surfs then become "middle and stay out of trouble".
So, its to this reason, fannie and freddie need to be released, recap'd and supported. Remember it was the community banks that invested heavily in the fannie and freddie preferred stock as part of their capital base that the Bush's fed and treasury crushed. Politically, Paulson, bernanke and then others really screwed the pooch on this and for the life of me, I don't understand why they thought it was a good idea?
Reading that it was the white house policy to destroy these two companies at the very same time the law said something else to me is near criminal behavior and for that alone there should be some atonement.
I would see reform / remanagment of fandf before takes effect on the financial statements.
However, IF the corporate tax rate were reduced by 10% then the EPS of FandF would go up 6.67% and the share value would move similarly.
A revaluation of the tax rates would not have that devestating affect on the potential draw because it would serve to first lower income dollar for dollar and thus first be absorbed by other earnings.
For example if NOL;s were say 40Billion and in Q4 of last year had the tax rate moved from 40% blended to $30% blended the value of the NOL's would have gone from 16Billion to 12Billion.
So, pretax income would have gone from around 9.5Billion down to 5.5Billion at a tax rate of 30% the net income goes to 3.85Billion from around 5.5Billion. So, still net positive.
If the rates go to 25% blended and NOL's are say $50Billion then the DTA's go from $20B to 12.5B or down 7.5B; but, it would also, if done say in third quarter be retroactive for the full year. So, for example this illustration would have only minimal effect
So, no i don't buy into the "hype" about what a tax change in rates might do as a big scary negative. The truth is its actually a positive.
JeddieM
Yeah - I know.
Back in da day - i moved up from a bus boy - to dish washer - to food prep - to fry cook then to cook. My pay per hour escalated as well. I think when i left it would have been - before taxes just about enough to - today to buy 1 share of Fannie stock.
Oh that was way back then.
Rick,
In some way JoeS is correct.
But you'd really have to sell or merge a company with NOL's into or use it to acquire an entity in a sort of reverse merger that then creates income in a similar or related business.
There are limitations to some deals and transactions where a change in ownership or control could limit the use of the NOL's which really generated the tax benefit of the DTA's.
So, yes, in a sense they are a functional currency and you'd not want to waste them if you could, but you are also correct in that they are generally, not a separable identifiable asset that can be sold.
Also, dta's or NOL's are only assets on the books if there is some reasonable expectation taht the entity will generate taxable income in the foreseable future.
The reason they are a game here is; they were reserved because of the going concern of fannie and freddie, ALL while recieving the backing of the full faith of the US Government.
Silly,
No doubht
Cheers to All,
JeddieM
OMG - 101% accurate post
BTW your 3.9B is for 1 quarter.
Most all the time, doing the right thing despite the costs is the right thing.
And, the right thing here means returning MONEY that does not legitimately belong to those that took it.
I doubt a few billion returned to the company; that results in a few billion of additional taxes and spending that yields economic recovery and more taxes is such a bad thing. Overall, economically, its probably about a wash; if not long-term favorable to the government.
Yes,
I'd agree.
There is only one way to prevent further litigation. That is to "pick" one of the "class action" type lawsuits and the government to "come clean" and settle some massive way that encapsulates all claims. That way there is a "legal" cleansing.
My figuring is that there will be "side" deals with larger holders of stock / interests to prevent them from - in the eyes of the do gooders and people in other peoples business being enriched for investing in a large way.
Some may say, there are so many and so high a demand of claims or potential claims that the other way is for the government to put fannie and freddie into bankruptcy - and let a chapter 11 filing wipe away common holders, preferreds, etc. and all the claims against them and then come out with a recapitializaion. The problem with this is that the takings claims would be so over ripe that they'd be very much litigation. Ultimately, the claims are against not fannie and freddie but the government. Bankruptcy doense't stop that. So, its a no win.
Thus, the only reasonable means of a resolution is a structured settlement that takes into account all the claims of any kind with one bullet. That would in my opinion be a repayment, recap, release plan with a dollar value for lost time (like you've indicated) for the 8 years at like $2 a year or something. They pro-rated by stock ownership, etc. time. But there has to be something that contemplates all potential claims and wraps it up all at once.
If not, this is going to linger on for 20-30 years. And that can't be good.
The only way out of the woods for the government is either a settlement or to press ahead with $0 for shareholders. Circle the wagons and defend defend defend delay delay delay and deny deny deny. Scorched earth. No prisoners. Like Custard's last stand.
My personal thoughts are that the government will have to settle.
There is not peace otherwise.