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LMAO! Ha ha. Good stuff
Amen! Excellent post. I doubt you'll penetrate his paradigm thinking though. I tried to reason like this in so many words. He claims it's commons not open to his capital structure reasoning, I kept pointing out capital structure doesn't matter, hasn't for 13+ years! Government is the big fish in the pound, all the rest of us are chum.
The only thing that works for us is the governments greed, which works against them the more greedy they become. How? Capital raise, investors investing confidence, and releasing a strengthened, not weakened GSE's. They can very easily screw this up by being too greedy. Wallstreet: pigs get fat hogs get slaughtered. GB is full fledged hog and does not understand that simple euphemism. Maybe why he's been killed on other investments? IDK.
When it comes to government and FHFA, the words all talk and no action apply. Like Calabria and his endless chicken sandwich lunches. I honestly think that's good though. GB has changed his win by March to win by end of the year, which will be very interesting since midterms are November. Lamberth is supposedly July? Correct? That will get bumped, I have no doubt.
The current admin has too many things in disarray and getting worse, so I very much doubt they want to add this to all the things going wrong. Midterms hopefully starts to provide us with a path to a solution.
I think it's you who doesn't understand....even though DC is filled with greedy idiots, they can not release the GSE's as is or as a utility model by stealing every penny they can. One thing they will do though is maximize whatever they can get at YOURS & MY expense.
There's no way the markets will fall for any capital raise scenario if government releases a lame, financially weak twins.
You missed the whole SCOTUS decision about how FHFA can regulate the companies to protect themselves, the entities or the public it serves. Not a dam thing in there about ANY shareholder.
https://finance.yahoo.com/m/584421d4-9c8e-3d9e-8a85-710fae18b26e/tesla-stock-pops-after-stock.html
Pelosi's husband bought a bunch of Tesla a week or two ago. Was just in the news....coincidence? Lol, yeah sure
When word starts coming out that these DC crooks are buying GSE shares, then we will realize our true value. Until then, the beatings will proceed to keep the morale in the toilet.
That's halarious! JPS have a million posts riding on Lamberth, contract claims and like a dozen cram down, conversion, fulcrum, blah, blah, blah hype that supposed to materialize in their favor via Lamberth, and you say commons will tank? Ha ha ha ha, that's funniest post of the year.
https://www.yahoo.com/news/stranded-windsurf-board-off-keys-202634895.html
Gb giving people ideas, lmao
Excellent Guido! Some day I may join twitter. Right now this message board is my only social media frey.
LMAO! Aaaaaa yeah, right.
It's time to worry about the current bull crap, no?
GB claims it's a restructure of F&F, but as Mad Max states it's the restructure of the mortgage markets. As I keep saying, we ARE a political football that keeps being moved from one 45 yard line, acctoss the 50, to the other 45 yard line, and then back again 4 years later. It's a joke. Then there's their ulterior plan to just try and outright steal the full value of the GSE'S via a liquidation prefference.
Can't wait until Waters is ousted from the banking committee. Midterms! Hopefully new majorities and newly elected give us people with better ideas, people of action and moral character.
And no court holds their feet to the fire as they hold two companies hostage. Criminals
Is he related to Jen Psaki? Something very similar, I can't quite put my finger on
Wouldn't be great if she "fingered" the dirty judges covering governments azz? There is no doubt, this is a cover-up.
Do you know who confirmed this and how? I knkw it was being talked about months bac but never heard anything definite.
This article is from 2014, but is a good one. Pay particular attention to Epsteins words. The government needs to realize they are in a glass house!
The GSEs Under Siege
in Daily Dose, Print Features December 25, 2014 2,279 Views
The following is a print feature that appeared in MReport's November 2014 issue.
It has never been more en vogue to be a critic of the GSEs. From politicians to private citizens to watchdogs within the federal government, if you want to score political points or push an agenda, calling for an end to Fannie Mae and Freddie Mac or just castigating the conservatorship itself as somehow unfair is a popular way to get there.
And it’s not just talk. There have been approximately 20 lawsuits filed in federal courts by investors to recover some of the millions in profits generated by the GSEs that have been funneled to the U.S. Treasury. As if that wasn't enough, members of Congress are lining up to determine how to reorganize the GSEs, while others conspire to eliminate them entirely. Even the FHFA Office of the Inspector General got into the game recently. But are the criticisms fair? And what (if anything) should be done about them?
The Threat From Private Investors
In a recent lawsuit filed by Perry Capital and Fairholme Funds, investors sued for breach of contract regarding promised dividends and what they termed to be an illegal "taking" under the U.S. Constitution. U.S. District Judge Royce Lamberth ruled against the plaintiffs. This outcome pleased those who believe that profits generated by the GSEs should to go to the U.S. Treasury.
In support of Judge Lamberth's decision, Wall Street Journal published an editorial, lauding the judge for "dismissing claims against the federal government brought by private investors." They congratulated the judge for "seeing through plaintiffs' argument that combined dubious legal reasoning with junk economics."
In the decision, Judge Lamberth maintained that he was just interpreting the details of the conservatorship, and that if investors have a gripe, it's with Congress for writing the law.
The editorial continued, quoting an official from the Federal Reserve Bank, who said that "the profits being used to pay dividends did not arise from the contributions of private shareholders, but entirely reflect risks borne by the Treasury and taxpayers."
The opinion of the WSJ editorial agrees with that of Edward Pinto, co-director and chief risk officer at the American Enterprise Institute. He said that without the support of the government in 2008, and the continuing support of the taxpayers, Fannie Mae and Freddie Mac would not exist as ongoing entities.
"Many saw this as an opportunity for speculation, but they may have chosen poorly," Pinto said. "They knew that Freddie and Fannie were subject to a charter established by Congress that could be revoked at any time." Pinto said that anyone who bought stock had to know that this was a political entity with a unique charter that could be amended at will by Congress.
The advice is confirmed by Jim Vogel, Executive Vice President at FTN Financial Capital Markets. "Private capital invested in a government-sponsored enterprise always runs the chance of disappearing with a change in government policy," Vogel said. The situation with the GSEs is a good example.
Judge Lamberth's decision, denying any compensation to shareholders, was met with vehement response by some. "No way," screamed numerous investors, including consumer advocate and multiple-time presidential candidate Ralph Nader. They contend that giving the money to the Treasury is a violation of their Fifth Amendment rights against the seizure of private property for public use without just compensation.
Nader has been a high-profile spokesman for Fannie Mae and Freddie Mac shareholders for several years. Nader owns about 100,000 shares cumulatively between Fannie and Freddie, which he has held since before the 2008 conservatorship, according to a report in The Washington Post in May.
"This issue's not going to go away with one district court decision by any means," Nader said during a recent conference call hosted by Fannie and Freddie shareholder advocacy group Investors Unite. "This was deception of the first order. If any corporate executives engaged in something like this, even the slumbering SEC would have moved to action."
The group that Nader spoke to, Investors Unite, is a coalition of approximately 1,000 private investors committed to the "preservation of shareholder rights" in the GSEs and to obtaining full restitution on investments.
The organizer and leader of this group is Tim Pagliara, a 32-year veteran of the investment business. He is also the chairman and CEO of CapWealth Advisors based in Franklin, Tennessee. He believes there was never any determination of insolvency about the GSEs. "Everyone needs to have the facts straight on this issue," he said.
He said that back in 2008, Fannie and Freddie still had the ability to raise additional capital and had other options that were taken away in September of that year when the GSEs were put into conservatorship. He maintains that there was a choice of whether to put the GSEs into a conservatorship, liquidate them, or put them into receivership. Conservatorship was not the only option.
But in August 2012, FHFA and the U.S. Treasury agreed to revise the terms of their agreement. Instead of a 10-percent dividend, the Treasury would receive all net income earned by Fannie Mae and Freddie Mac paid in a quarterly "sweep." Now 100 percent of the profits from Fannie and Freddie go into the U.S. Treasury. "What this means is that the government has nationalized the housing industry and is using it as a tool for budget reduction," he explained.
According to a New York University Law School professor, the ruling handed down by Judge Royce Lamberth is flawed. Richard A. Epstein, the Laurence A. Tisch professor of Law at NYU, says that the mistakes in the judgment are so serious and one-sided that the judge should withdraw his decision and reconsider the facts.
"First, the judge's opinion seriously misstates the rights and duties of the Federal Housing Finance Agency (FHFA) as a conservator," Epstein explained. "Second, it seriously misstates the authority of Treasury under HERA." Epstein pointed out that the amendment to the conservatorship was not negotiated by an independent board of directors.
According to Epstein, the amendment was not intended to return Fannie and Freddie to the private market, but was designed to ensure they would never be able to return to the market, no matter how profitable their operations had become.
"What this means is that no private company is ever safe," he explained. "No private party will ever rely on government assurances or guarantees if the amendment is allowed to stand. The rule of law, which is critical to the proper functioning of free markets, has no meaning if it can be suspended whenever deemed convenient."
But despite their protestations and with full knowledge of the uphill battle in the courts that lays ahead, investors are still buying into the GSEs. For example, in recent weeks reports have surfaced that Bill Ackman, leader of Pershing Square Capital Management, a New York-based hedge fund that is itself involved in a lawsuit against the federal government related to GSE profits, has added to the fund's GSE stock portfolio
Absolutely spot on there. I agree. Was it ever verified that this administration renewed the contract with MS and JPM and that other adviser? There was a question here about them still being involved or not a short while back? Someone last tried verifying by looking at financials but could not determine, from what I remember.
Much appreciated Golfbum22. That jarred the old grey matter.
It will be interesting to see what government does, and also if Lamberth requires Ugoletti to reappear to account for this. Though, that azz clown Ugoletti is in a non extradition country, last reported. Retired on a GSE payoff, no doubt, to keep his yap shut.
Does anyone have the exact text of whatever Ugoletti lied about? Was he giving sworn deposition,testifying, ?
I am curious as to the line of questioning an discussion that led to the fib.
I can not remember that far back. Lol old age creeping in.
Thanks for any help
Reckoning coming! For sure. This current administration is no where near the talent we need in place. Maybe Slow Joe will give this also to Kam to handle? Wouldn't that instill mega confidence?
That's really stretching it, calling it a deal. Many here and those in the dark about this, if they knew, would never call it a deal.
Here's the thing though, the seniors and the warrants WERE TAKEN as a insurance policy in the beginning, there was never ANY reason to believe that it was going to be a financial take over via rigged laws and accounting.
The government is not allowed to own companies! So once any cram down or warrant exercise happens, I expect law suits, because at that point government is a majority owner and needs to book 6+ trillion onto the countries debt.
How do they explain to any new investors who want security that they used insurance policy backstop tactics to usurp ownership? What's the guarntee they won't do it to the next group of investors? The only way is to provide a clean slate by re-instilling market confidence, which as you can see, does not exist right now. The government really needs to think about the Wallstreet proverb that always holds true : Pigs get fat, hogs get slaughtered. They are way beyond fat from all their NWS, and if they go full "hog" on this, it will not only be us paying, but they will have to explain to taxpayers why they are doing another 100+ billion bail out or in the other direction, why their 30yr mortgage is 15%+
The market is all about confidence, trust and truth in reported numbers and ethical business practices at the end of the day, even though greed is good.
I myself do not see how they can legally and morally degrade or dilute 20.1% without shooting themselves in their 79.9% foot. So if they want to maximize that 79.9, then so goes the 20.1.
I've always thought that if the companies were never released as is, and any spin off or re-ipo plan, that it would be a better plan to let the companies buy out all shares and prefs of all classes by doing a grand bargain. They could simplify and gain more by doing this, in my opinion. You (meaning the companies with current capital) buy out prefs at say 65 or 70% of par, and the 20.1 of commons at about $20-25 a share. Everyone takes a hair cut in that situation as far as fair value. Then the companies do 2-3 offerings over about a 2 year period. I bet this would bring them far closer to the capital requirement than any other plan, even though they'd have to spend some to get there. It's the governments lone greed factor that keeps standing in the way of any common sense resolution.
You correctly state common sense for attracting investment. So far, who in charge or involved in this conservatorship has used that?
People here focus on a word or few words, but never expound their thought process because....the devil is in the details, always. Not just the words Utility Model.
Another good post BTW,
I'm with you guys on the corruptuion, and not all politics, but yes, politics are involved otherwise we'd have had a soloution many years ago. Agree, Bush admin was the main culprit, then Obama added another criminal act that worsened things alot (NWS), then Trump did not make us a priority when he could have. But...if you think those three are smarter than the current admin, you'd be correct! So, what is your expectation on current admins end game? I say, absolutely nothing good, would rather wait for a smarter bunch to be put in place, not to mention, with like 33 or so Democrats not running and about 10 or so republicans (hopefully more retire or ingrained multi termers GTFO) that increases our chances at a congressional resolution to this, which I much rather prefer than any single admin solution. The more heads involved, the better, especially if newly elected, less ingrained corruption in those newbies.
I've waited over 14 years for this to resolve. I'm in no hurry to let idiots resolve just so it gets done - be careful what you wish for, and all that. I think in the current environment, midterms and the election in 2024 will have people paying better attention, not voting their feelings, and hopefully do a bit of research to elect better people to fix our current mess.
Seriously? She said that? Wow, I missed it. I know Calabria, Mnuchin said the loans should be considered paid in a few articles or media talk shows awhile back, when they first started in Trumps admin. Never heard any Democrat Senator say that. You'd think the stock and prefs would jump 20x on a comment like that from her!
Yellen.
She's probably going to announce all shareholders getting screwed after they find more judicial circular logic and irrational reasoning arguments to cancel any case left.
Are you kidding? You think the government will give investors 8% ?
That might be what they cut themselves based on a backstop arrangement. Investors will be lucky to get 3%, and that'll be taxed! None of those Dems speaking (Waters or Brown) will be willing to give up any profit to an investor when they can give away freebies to making affordable racially centered housing.
They do not understand the very basic but all important aspect of giving someone a fish opposed to teaching someone to fish.
Lol, yup. These idiots could screw up a bowl of cornflakes. It's obvious also that Mad Max is one of the main culprits pushing the no shareholder or hedge funds should gain off their legal personally risked investment money. She repeated that at a Mnuchin or Calabria hearing a bit back and parrots it when the need arises. Looking to her to be a savior on this amounts to inviting Hannibal
Lecter for dinner.
BEST POST TODAY!!! most accurate and honest. Thank you.
The Fed is between a rock and a hard place. Truth is, the country definitely NEEDS a HERA conservatorship. Fire all the government and replace with newly elected individuals, allow taxpayers to skip 3 years of taxes and DO NOT PAY ANY POLITICIANS .01 cent until the countries debt is balanced and there is 100+ trillion of capital saved for any useless spending, which, when useless spending is enacted, the government will have to send dollar for dollar of that useless spending back to taxpayers before spending. Yeah, its cinder block spending shoes. Lol
I can dream.
What the hell? May 1st? He said rich by end of month, or April, or June, or July or August?
Best way to rule over the masses is confuse them. Is our judicaial system easy enough to understand so that Joe plumber can petition the government for grievances? Can Joe the plumber even comprehend the amount of legalese just to file?
Everyone here THOUGHT they knew how SCOTUS thinks....
The founding fathers had a process...it included fist fights and gun duels. The current riff raff horse trade, nothing more.
ALL TRUE . Bravo
That's funny! The news has been saying for weeks that Biden has been losing the black and hispanic voters for months! Now, pander, pander, pander. Lol
Or allow FULL disclosure of those presidential docs that she has seen.
Wall color? Boy do you have high hopes! They'll be arguing about the gender signage for years. Never make it to the color.