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When MC says that it is up to FnF to meet milestones, MC should not even be suggesting IPO/SPO.
Any such suggestion creates an impression that FHFA conservator is leading the FnF management in IPO/SPO direction and can lead to all sort of legal interpretations considering the lawless history of FHFA conservatorship as confirmed by 5th circuit ruling.
"'m glad you used quotes, because otherwise your statement is incorrect. All you did was quote an allegation from a plaintiff, not a finding by a court.
Also, notice that these plaintiffs do not seek to overturn or otherwise invalidate the warrants. All they seek is money damages for pre-conservatorship shareholders. That is, even if they win the warrants will still exist."
It does not make any sense to continue conservatorship once SPS obligations and NWS are cancelled as fully paid back.
FHFA imposed conservatorship on FnF because UST and Fed refused to investment in FnF without conservatorship. If today FnF are without the capital it is because of NWS.
So FHFA can not use these reasons for continuing conservatorship. There are no additional risks involved if conservatorship is terminated keeping restrictions on dividends to shareholders. The benefits of terminating conservatorship and listing are, it builds trust will investors by the time FnF build enough capital with retained earnings.
Lawless conservatorship is a very bad legacy in the of history of this nation in every respect. So sooner lawless conservatorship is forgotten it better for all.
"What I dont get is when they start talking about a #.. so they want to limit how much FnF can have again? What 10 billion now? Then he speaks about mile stone for them to get out of conservatorship on there own. . . Maybe I misunderstood."
"Even if he did care about shareholders making $ he sure as shit couldnt say it. He might not care but I'll bet Trump does."
"it is imperative that the next sp amendment eliminate the concept of just pushing it back to the greedyment through "liquidation" pref..
its a big circle jerk..."
"Bloomberg: Fannie and Freddie Retain More Capital
https://www.bloomberg.com/news/videos/2019-09-16/fannie-mae-and-freddie-mac-won-t-go-to-market-until-end-of-2020-fhfa-director-says-video
"
"So my guess is
- warrant is either cancel or sell back to GSE
- SPS is fully repaid, so what converts to common?
- no IPO, recap by retained earning, new JPS, and hedging.
- release before election. Any gap to meet the capital requirement will be covered by new credit line from UST with fee.
- MC may lower capital requirement in light of the last stress test which shows only about $45B lost under worst scenario."
"What about the bnks settlement? What happen to that? That's a big money to forget. One way to recap?"
"the GOVT is NOT ENTITLED to LOAN + INTEREST + BONUS STOCK !!"
"the GOVT is NOT ENTITLED to LOAN + INTEREST + BONUS STOCK !!"
"It's Treasury's job to protect American economic interests and capital markets. Which includes FnF shareholders. Their job isn't picking-and-choosing winners. Or creating "losers" and screwing FnF shareholders as did the past two administrations. As long as they do their job to protect American interests we're golden. They don't need to go to bat for us in any "special" way. In fact. Just go away. Collect your 10 bps commitment fee. And we're good."
give that a break! A gift to hedge funds? a Wall Street bailout?
Wall St./commercial banks are totally against see the Twins do well!
A gift to hedge funds? What! That's crazy! Bring on Justice Sweeney & let the f'ing music play with the 11K sealed documents!
How about a deal to give the Parrotts, Stevens, Ugoletti, Sperling, Wallisons of the TBTF community less time in prison!
"Common and Public Preferred Shareholders: How will existing shareholders, who own the common and public preferred stock, be treated? This is an exceptionally sensitive and political issue. If it looks like something that can be called a “gift to hedge funds” or “bailout of Wall Street,” it will signal a very bad Congressional reaction to the plan."
"That said Mnuchin is untrustworthy. Knowing it gives the guy who pulls his strings lots of power.
"
"Mnuchin, Calabria and Carson don't negotiate with each other, they agree with each other - and with the President."
"Instead, the warrants are there to be sure that Treasury enjoys some of the profits of their labor to rebuild fannie and freddie. Once f&f have paid back the seniors, instead of Treasury walking away with nothing but their initial investment plus a measly 10% interest - they walk away with 80% of the value they created in f&f."
"cat man lost all his power with en banc ruling. news was saying he was the most powerful man in the gov't, not being subject to judicial review or the president."
Golfbum22, agree.
" They did not disagree with Lamberth's assertion that FHFA owes no fiduciary duty to shareholders."
"This duty does not exist.
Judge Lamberth also dismissed plaintiffs' claims of breach of fiduciary duty, saying on page 33:"
"Calabria probably is torqued because he has about 16 months of employment left if the unconstitutional FHFA ruling stands"
"What I also find funny is when SM confirmed Trump approved the plan... really. What plan is that? This vague nothingness with a hundred scenarios of how things could possibly go? I dont see Trump as the type saying yeah whatever ya think sounds good, try n get Congress involved n let's see what happens maybe .. I see him wanting a actual laid out plan knowing what he wants to happen is happening."
eyeofstorm,
Yes, I agree. During senate hearing SM gets queried on POTUS approval. UST plan is basically a 53 page essay with all possible options and not a actionable plan. It depends on what specific option WH agreed on.
So it is safe to assume that actionable plan is still a secret.
MC seemed to be little upset about 5th circuit ruling.
"I'm not. It will happen. If Trump didnt want this done he wouldn't have put out the memo in the 1st place, just kept collecting all the money."
they are both donkeys(same page) phillips was better for us hence hes gone
this interview was def NOT negative for commons
retained earnings, years
maybe outside cap raise(IPO) later
raise cap buffer end of this month(START RETAINING EARNINGS)
MC seems to be a totally confused soul when it comes to thinking that duopoly decreases the competition in situations like FnF. MC keeps on repeating this BS every where as if it is the eternal truth.
In case of FnF, FnF are GSEs created by Gov for the purposes of Gov Public policies of affordable housing goals and more. Unlike private sector companies FnF are highly controlled/regulated by the Gov in every aspect.
So there is no way that any for profit private sector companies can beat FnF in terms of pricing. Because of these factor no private sector would like to compete with FnF even when Gov creates a level playing field for all. Adding more private sector players will only increase the costs for the end consumers and reduce the quality of service.
Without FnF standards the secondary housing finance market will look like wild west. There are so many examples to see how despite the more players the consumer are paying higher prices like in health insurance. Even today if given a choice all loan originators and home buyers prefer FnF loans.
Some One needs to educate MC on this aspect.
"I’ve sensed hostility in him for years. That’s why I take his view on GSEs with grain of salt."
"why can't Howard be brief ??? always a WAR and PEACE novel - Sheeeesh !
A Full Short Week - SEPTEMBER 12, 2019 ~ JTIMOTHYHOWARD"
"Very politicly savy. The Trump administration just had to be patient and wait on Lady Justice in some form."
"So if they pay a fee then congress may digest it much easier that FANNIE AND Freddie are going to be back in Business In My Opinion...
"
Currently SM is on CNBC. Repeated the same about FnF.
"Or is it your opinion that because most of the current lawsuits don’t address the warrants, that the Gov will throw caution to the wind and exercise them just since nobody is challenging them, with the exception of the Washington Federal case?
"
"SM inherited this. Keep that in mind."
"It was a mess when bailout happened. I don’t think the bailout is in hard cash. Kind of a credit line.
The whole thing is to buy time to bailout the TBTF financial institutions. That’s pretty sure.
"
"“Outstanding preferred”? Are they referring to senior prefs?"
FnF are paying now punitive interests rates on drawn SPS value (currently it is usury 10% dividend).
Commitment fee is on non drawn amount. FnF do not need $256B credit line. The credit line can be up to an amount to bring capital to meet the capital requirements.
At the same time all social mandates imposed on FnF should be paid by Gov at cost + 15% fee.
"Instead, they will pay a commitment fee for the outstanding preferred"
"Then Mnuchin responded to a question on how he expected taxpayers to be reimbursed for ongoing GSE support with a specific reference to periodic commitment fees which were recently estimated to be in the area of $7-9 B. These fees were suspended under the Third Amendment."
KylieM,
Highly vaunted wall street mortgage finance expert, after spending long 3 years on housing finance reform plans, even could not answer senator's simple question about criteria for affordable loans in front Senate committee. BC and MC answered the question for SM.
After wasting 3 long years and after boastful talking and talking, SM has not even shown any actionable plan. The current UST plan is a big 53 page essay with all the possibilities. That is why frustrated Senator Kennedy demanded a bill with specifics.
One wonders how impatient and pro-action Trump tolerates this talker. Are there any achievements for SM to show in last 3 years? SM's selection for Fed has been a big disaster for Trump.
"Steven Mnuchin on Fannie, Freddie: They've been in conservatorship for too long. We're gonna see if we can stop the Sweep in September "
"
"All three SM MC and BC looked nonplussed. They do not want to fool with congress. They do not have time to waste. It was pretty funny."