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To the extent some of the "draws" were drawn to pay interest - the actual amount "funded" should be reduced by that amount to actually show, that the "return" on the money shoved at fannie and freddie should be higher.
Its disingenuous to not show it properly and to clearly indicate the "return" to the greedy government has been enhanced.
The mantra I've advanced is very similar.
Its GOVERNMENT GREED at the expense of taxpayers, people who actually pay taxes, people like me and many other you's.
No more Government benefit at the expense of Taxpayers!
I think its a state of mind.
I believe people - not me - but people other than me, sometimes wrongly believe "affordable housing" is a key word for government paid or funded or such.
The difference here is the GSE's - actually buy loans and repackage them to investors. This allows originators / lenders to not carry the loans - and allows market rates - interest rates - to be an invest able product.
So, yes, i think ben understands the difference.
GLTA
Certainly hope so.
Hoping the ship starts to turn and we start seeing the signs.
Also, fed backing off lawsuit defense and starting making some reasonable sense of it all.
Now that Mnuchin is Treas. Secretary - let's hope he does what he is capable of and restores some values in the system.
It would be easy for him to do the wrong thing and continue down the path.
Hoping he does what i see as the right thing.
If he is confused or uncertain he should contact me I would be glad to help him out.
What is more likely to happen is the redefinition of what "affordable housing actually is"
Affordable housing is not free housing.
Affordable housing is not housing you can't pay for.
Affordable housing is not housing beyond your means.
Affordable housing is affordable for the person doing the buying with their money - not my money and not your money and not government money.
I think Ben gets it.
Its going to rest on what he says upon confirmation / swearing in on Monday night
his words could be instrumental come Tuesday morning.
The SPSA was entered into AFTER being invaded.
True the agreements were never endorsed or approved by a truly independent BOARD or Management.
They were always done by a self-serving two sides of the "deal" government.
This so called contract is like swiss cheese - lotta holes.
first off understand - i'm about 10 beers into this evening.
But, here ye go
Treasury entered into a warrant with fhfa.
fhfa = government entity
without notice or such to public so, is that due process.
as a taxpayer. i don't want to be on the hook for lititgation subject to the takings withthe warant.
seems un seemlingly.
I hope so!
PLEASE...
I am so ready for a new chapter.
PLEASE
I hope he does, but won't be shocked if he don't figuring it would be very soon in his position.
As a tax payer. You could sue to enjoin the Treasury from exercising the warrants citing the due process clause.
The government granted itself warrants in an entity it did not own without due process and now risks my tax dollars in doing so because of the likelihood of being sued because of it, wastes my tax dollars in owning shares even for a second. which it can not legally possess - as per the AIG decision.
955 - the problem with this - concept of contract is a contract is that it isn't an enforceable contract if the underlying is illegal. One would think the way it was handled - the government contracting with itself at a price of 1/1000 of a cent would be less than arms length and thus not a square deal; gives me the hint of impropriety.
So, some may waive the contract noise at you; but that's really just noise.
Let the courts figure it out.
Yes, proper valuation and capitalization of each requires that the warrants be vacated.
Vacating the warrants, canceling the sweep and recasting the interest at 5% would do wonders for these two.
It would allow the market to price the capital fairly and allow for any equity raise that is properly valued.
Realizing if they issue 500M shares - say they do that at $50 a share is $25B of additional capital - from which they'll earn $$ maybe another 2-3B a year ??? so Net could be $12B / 1.6B x 12 or so would be $90??
Also, to be smart, they'd cancel the warrants - let the share price reset by market value first and then raise $$
So, for Fannie that could be raise $25B by issuing say 200M shares at a higher valuation?
There is no rush to raise capital once the announcements.
Let the market price the securities without the overhang of the warrants and undue gov't influence.
GLTA
Going to be nicer for her when its at $125
But, $45 will do for starts.
AND Upwards...
Tally ho!
Congrats to those with 6 digis.
Thank you
Its important to remember that FandF unlike banks and AIG never needed $$
They were, and have been cash flow positive from operations.
They had plenty of ready access to unencumbered assets to leverage or sell if they needed money, which they did not.
Yes, seems absolutely,
While, not providing legal advice but an observation of what these eyes have seen, the government has conspired with itself to provide for itself, via contract - that contract which is likely not a valid contract in that it doesn't appear to meet the definition of a contract - ie. its between yourself and yourself - to do something that is not proper - sell 200Billion of value for $20,000 - and any decent attorney should easily prevail on that its seemingly so unconscionable, reprehensible, and against public policy that to allow would be a defacto taking that, yes. Its likely clearly a taking.
In essence, it appears the government agreed with itself to sell itself 80% of something it did not own; but controlled by virtue of questionable circumstances for its sole benefit at the loss to the rightful owners. This is a situation, of no bargain, between parties that are not arms length and certainly not at market rates. (Fact is the 10% interest rate is a problem as well - as it was 3x the prevailing market rate and 10x the Fed Funds rate which the Treasury borrowed at which presents a big problem for transfer pricing between effectively "a consolidated or controlled group")
I've seen trustee's or conservators in similar situations be taken to court for matters of selling "services" to conservatees at discounted rates and still be challenged and lose.
In this case, its a likely a clear violation, if the government acts upon the "warrants". As it is, the mere fact they've been fully repaid and not "canceled" them is likely a problem.
Its my feeling that buying at 3.90 or 4.20; in the long run will not be overly significant.
JR,
My original point was that ALL rights of the shares, would really include ownership or rights to the value of the shares - ie the proceeds from sale of the shares, but, as i noted apparently, ALL rights really didn't mean ALL rights.
Which is a bust to the governments assertions of ALL rights, when in fact, they didn't ascend to ALL rights, because, I still have rights of "Bargin" or value of the shares whatever they maybe.
ie. My argument is that the governments argument fails on the merits, and thus does it in entirety.
GLTA
I've got a few more nuggets on the line than that, but will be sorely miffed at the rule of law for the shareholders to get the shaft.
Just don't understand some of the things that have been decided by the so called learned judges and stuff.
Like, a simple one... if FHFA took ALL the rights of the shareholders, and i mean ALL = 100.00000% then... how does the stock trade? I mean, I paid $2,500 for a few hundred shares the other day. Why did I do that, I mean, does the government now own the "right" to my shares. I mean the value of those shares? Its that simple. They don't; do they? I mean if I sell those shares, who gets the proceeds? Does Scotrade send the money to US TREASURY? or to Me?
So, yes, i've been surprised over and over by government and judges many times, and this one is but another instance of "judges" that take for ever to get to a conclusion I'd reached years ago... from standing on the rail.
Cheers to all. Best wishes,
GLTA
Yes, 100K is a lot of money to have riding on what could be termed speculative.
For many here, their investment - not speculation - was a trade put on at under $1; some at 75c. So, if they have $100K in value today many have basis of $25-$30K and feel more comfortable.
But, yes, $100K is a tiddy sum, especially if you don't have it or if its all you have, or if its most of what you have.
I'll be honest here, if it were me and all i had were $100K and all of it in FandF; or even 60% I'd not sleep well cause a head fake could drop the value 25% in an hour or 50% in a day. Who really knows, its so dependent upon an outcome, an outcome that cannot be measured and has been controlled by those who could not be trusted, unethical, or whatever you want to call it. There is a high degree of risk.
Hoping for a favorable outcome and will be mad if it doesn't occur, but its not going to ruin my life.
GLTA.
JM
Thanks Rick,
JM
Reality is what it is. Sometimes reality and becoming isn't what is right. Often, the wrong succeed and good go bad.
The courts are not perfect. You may have never been to trial, I have. I've testified in open court, done scads of research, prepared many expert reports and resolved / settled various claims and actions. Courts, are run by humans and humans are not perfect. I've seen judges error and not be contested, I've listened to perjured testimony be unchallenged, I've watched Chapt 11 Federal BK judges be - dumber than dumb and trust what they heard just because it was some "expert" that was lying. Sitting in the court room and knew it; but not asked to clarify it. Courts are not infallible. Witnesses lie.
Now, as to the warrants. Sure they are a contract into themselves. They were contrived by treasury and signed by fhfa on the behalf of the companies.
What they are - are self dealing. Those are the facts and they are undisputed.
The warrants are at a below fair value price. That too is not disputed.
The warrants, were never approved by vote of THE shareholders(not the posers).
So, what will happen...
Who knows that is yet to be decided ... my feeling is the warrants will be voided. My feeling is the warrants are fruit of a poison tree and are bad news.
Yes, its my feeling of what will happen, will it? Well, we shall see - now won't we. But to tell me the courts have ruled - well they haven't yet on the merits of the situation and the situation is yet resolved, now has it?
It is my belief, that the exercise of the warrants will create more problems for the government and its further my belief that the government wants out of this mess.
Could i be wrong? Yes,
Has it been decided? No.
So, please don't tell me or us that things are done set; because they are very fluid.
Lets see how things happen. But, if you tell me you think they will be that is fine. Because we don't know what will happen, now do we? Kind of makes it fun, now doesn't it.
GLTA
Realize this is what was "said"
It was decided that the bailout terms were illegal but no damages were awarded because it was likely that if the government had not intervened shareholder value would be 100% lost.
But, really? Does this make the actions right?
I mean... really?
So, I go to sea, rescue a damsal in distress from drowning or being shark bait, but decide - I'll only do if if she agrees to being a "friend with benefits".
Does that make it right?
Who knows, maybe just maybe, they survive anyway? Or just maybe its extortion?
See, in our case it was self dealing.
Like, does it make any sense? Rationally or does rationalizing the theft or corruption make it seem alright?
Not unlike many many comparisons. Either way wrong is wrong.
This could very well be the start of a great story to tell the grandkids one day.
You know, it gets harder and harder going to work each day, just knowing that some day soon - hopefully, this ship will be righted and we'll be at fair value.
At fair value, omg! will need to reassess certain goals and how much of the time i have left for anyone but the things that are for the family and wife. Would love to volunteer at school, finish the jd program, move to the coast and begin a new chapter. If only, this will be soon enough to enjoy it. Some have passed waiting on the truth to prevail, hope their family held. Some have had to liquidate to cover costs, feel for them as well. Looking to up the charity ante in both time and treasure. OMG at fair value. Things will change.
Yep, I'll be helping the economy by freeing up a spot; which should trickle down to helping today's new college grad find a gig.
Amazing part is we are looking to the republicans to re-instate an institution that has helped the democrats for 75 years. How odd, they couldn't have done this anytime in the last 8 years? But instead they got greedy, instead of actually providing liquidity for the market and opportunities for prosperity. Yes, I realize my home value has doubled in 8 years, and likely up another 10% last year. You know why? Because of the restraints on home lending has prevented new home buyers and new construction. Its, actually, from a demand for homes -v supply had the effect of upping my value.
Which is going to be okay when I sell and move to the coast!
Fore!
Peace to all
Jeddie
Rek,
Thanks for the nod and wink.
$125 to me would be great. $200 is a stretch.
2028 is about 11 years away.
Trump, in my opinion, wants to end this.
Without dealing with the warrants, market uncertainty prevails for another 10 years. Markets do not like uncertainty. Its what keeps people on the fence. Trump is all about making a decision and moving on. His style is absolute.. He did this to Sally Yates, follow my order or your fired. His style is not wishy washy and thus I see resolution one way or another. "Your fired"
My firm belief is the warrants are fruit from a poison tree. It'll trigger AIG like elongated lawsuits with people fighting for real $$. If I owned 100,000 shares the difference would be having $2.5M and having 12.5M in value. Now suppose, I had 1,000,000 shares now the difference is between having 25M and 125M. Well it only takes one such individual to be in that boat to say, wait a minute. I got screwed and be willing to invest a couple of million to fight it. I would - after all - its tax deductible.
Anyway, have a great weekend. Hope you have a wonderful day and such.
Just my opinion, not meant to enflame or nothing. Peace. Hugs to all.
I think Ackman has always "said" it
But, does he really think it?
Ackman is a smart guy - he probably realizes that full value to him is a home run for his $$ and he'd be golden.
But remember he is fighting for 1/2 the win which gives him Fort Knox. He is very smart; he realizes that he'll fight for 1/2 the fated calf and not the whole thing.
For the rest of us anonymous people, we see right from wrong in a protected world. The great jealous people the greedy government isn't networking and going to the media to expound Jeddie as greedy, cause they don't know me, but ackman would be singed and singled out by other tax audits, epa reviews, sec reviews, scrutiny for opposing big government. He has to be careful who he pisses off, because the government has the fbi, cia, irs, dea, sec, and a host of other people they can use to destroy him.
He is a smart guy...
Obviously, I agree with you.
I've been saying the same thing for along time.
Also consider, the warrants were taken as "collateral to gurantee repayment, etc.". Yep that is what we were told. Collateral for perferred stock? When does that ever occur?
Who, here have everseen an investor take "collateral"? Sure they get some other things but really collateral?
Seems to me, collateral is akin to a lending arrangement. If that is true and the loan has been repaid... then so should that collateral be returned?
I mean really, the bank sent me the title on my 1983 Chevy Cavalier - so why would i expect the fHFA to do anything different? I mean aren't they supposed to be really smart guys that know how this works?
GLTA -
$400Million = 1/10th of what they took from Fannie / Freddie in 1 Quarter of a year.
Its smart business to keep people off of the trail and create an alternative truth, just like the benghazi story of an internet video. Morons will believe anything if you serve it to them on nice flat ware.
Concur.
Peace.
JC - man - do I second that !
It would be so; so so nice to get back to business. Get this thing to fair value and then like you have choices.
While, unlike you I am certainly not "all in" with the GSEs $50 would be nice; $80 Better and $125 sweet!
But, lets get a few things straightened out first and the rest will be academic.
Thanks for having faith and believing.
Rec,.
$40 would be nice. $40 is certainly a target.
But $40 (assuming warrants are voided) is just not, in my opinion, fair value. My estimate of adjusted fair value is on modest earnings at a reasonable PE for sustainable return.
My goal price is $125.
So, if you want to jump off at $40. That won't bother me. But, I don't see $40 with warrants exercised and I feel like its an all or none thing.
The government would be seen as greedy and it would prolong the lawsuits if they do. Remember, through taxes, the government gets its bite of the apple anyway, and creates economic stimulus along the way.
So, Rec... $40 sure would be nice... but $125 is my "personal" goal.
Thanks for all you do out here.
GLTA.
Yeah -
That ought to do
Thanks for the kind words.
Yeah, its been quite the ride.
I bought into fannie and freddie in Sept. 2008. But only in a small way. It wasn't until some of the larger players confirmed my thinking.
But, yes, seeing the excess reserves when they were put up. Reading the Q's and listening to the discussions made me convinced they were padding the cell and practicing cookie jar accounting. It was amazing how bad the words were, but the numbers told a different story.
I am still very surprised the auditors were sold down the river on these two. As a tax payer, they really sold out, clearly a problem.
In the meantime, years later, like everyone else I've waited and waited. Trusting in that the truth will prevail.
Problems are with honesty and trust. The financial markets depend upon it. I just don't see how anyone could trust the system if the system is allowed to steal from the participants like this.
GLTA
Red,
The last time fannie / freddie sold off or girated in massive swings, down drastically,,etc...
There were so many orders to sell that if you placed a limit order it when blowing through. And a market order would be dangerous.
The orders took 20 minutes to confirm / execute and then a prices way different than when i put them in.
On heavy trading days, massive share movement, there is no guarantee, do to volume that if you tried to sell at some price that you'd get it. A stop loss here and a market swing ... you know... down $2 and then back up a buck; well you could get some real crazy trading.
Good luck to you what ever you decide, but be careful. Bad news, even temporary bad news could see us be off $2 in 20 minutes only to recover 10 minutes later.
Have a great day.
Thanks Ob1
Appreciate your time to respond to my question.
JM
Absent really bad negative news or some other stunner... we probably will continue to edge up pending
1. Perry appeal in the favor of the plaintiffs.
2. Munchin saying more about restoring fannie and freddie.
3. Cap's bill 491 allowing for the recalc of the money moving forward.
4. release of the documents showing - what i hope is bad faith by the government
5. Change of the tone at wh / treas / fhfa including the departure of watt.
6. Relisting of shares (that would be telling, but could it happen)
I think we'll continue and settle in the mid to low 5's....
Any one or several of these could blow the lid off of it. I see the largest risk as not being in the stock.
GLTA.
I guess my confusion is for example here.. from page 13.
FHFA Presentation on Deferred Tax Assets
(FHFA00092209): The government seeks to preclude from
discovery an internal FHFA presentation con
cerning the
treatment of deferred tax assets. The Claims Court found
that the government had not shown that the document was
deliberative and that, in any event, the privilege sh
ould not
shield relevant evidence in the case. The government
asserts
generally that
the Claims Court’s
decision reflect
s a clear
misunderstanding both
of the deliberative process privilege
and the document itself
.
How could this be subject to "privilege" when its not the WHouse but an independent FHFA? Doesn't privilege really vest solely with what would be executive branch and perview of the the president? So, how could something like this be privileged when its only an fhfa document? Would the presidential privilege apply to something the not involving the president?
The court writes...
The presen-
tation is clearly a “recommendation to a supervisor” on how
to go about making a determination as to whether a deferred
tax
asset of the GSEs could be realized and as such const
i-
tutes “a classic example of a deliberative document.”
Abtew
v. U.S. Dep’t of Homeland Sec.
, 808 F.3d 895, 899 (D.C. C
ir.
2015).
So, as independent agency - the FHFA has no supervisor? If it did it would violate HERA ?
Isn't this damning to the Government? Hasn't the appeals court just ruled that the FHFA is supervised by the white house and thus; for example would allow - the current president to fire Watt? or do whatever he pleases?
I read this as a double edge sword.
Further i find this troublesome from the court...
“The
purpose of [the deliberative process] privilege is to allow
agencies to freely explore possibilities, engage in internal
debates, or play devil’s advocate without fear of public scru-
tiny.”
Moye, O’Brien. O’Rourke, Hogan, & Pickert v. Nat’l
R.R. Passenger Corp.
, 376 F.3d 1270, 1277 (11th Cir.
2004).
The privilege would be meaningless if all a litigant had to do
was raise a question of intent to warrant disclosure.
In business we often banter about ideas. All of which would be discover-able if our actions were to cause a lawsuit. Who knows it could happen; so as in forensic's we often don't take notes or write down things that - could be discover-able.
How is an independent agency - one supposedly running a private company treated with special treatment?
Is it private / independent or is it government? Only privilege goes to government not to private companies - unless you know its privilege communications with the attorney - but here? Not the case.
Thus again, its really problematic - the government may have won the battle, but it seems they've just been put in a corner and lost the war.