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the original TH717 site is still down btw. Let me clarify (again) ,there are 2 sites , different authors,similar formats.
hey , the sites look similar but are distinctly different .Check it out before you comment.
not the same blog. Patrick Mulloy is believed to be the original TH717 originator. This is a second TH717 blog with word press that developed when TH717 was down. It is a separate blog, organized differently and based on the blog articles and style of writing, written by a different person. Check it out , and you will understand .
For those that may not be aware , there is a a second TH717 site that also went offline at the same time in as the popular site. It has now recently come back up and the the last update "the stage is set for victory" , jan 14th is worth a read and a great update especially for new people. Like the first site the author is unknown. However the site I find ,is factual and well referenced. And can be found at https://th717.wordpress.com/2017/01/14/the-stage-is-set-for-victory/
Timely post. My sentiments as well. Amen
yes ,and believe it or not ,so is FNMA (was 4.31 pre Lambreth)!
nice video. I think they have it covered.
lol....and also what they prefer to believe. Nothing like true facts and raw data!
....other than Maloni's blog of coarse!
this is one person's opinion of Carson. And as one neurosurgeon to another ,know him. I personally feel he will be a great choice and will do more to fulfill the goal of "fair " housing than the past officials. This man has will accomplish great things ;already more than one can comprehend or imagine.
Hard to believe , great post. Another 180!!
thank you
Just curious, and off the top, what is the status of the Delaware suit lie at this time? It at one point seemed very promising. Hindes I believe is talking Monday at a conference?
Nice "cheat sheet" ....but credit goes to Matt Hill who designed and posted it on TH717 on sept. 16 and on his Twitter account.
Yes he did...And add "i moved a heavy couch" stupidity. I really don't think anyone appreciates this type of "crazy fringe stuff", pending a possible 50:50 court decision and pending election consequences. He has lost his credibility ,at least in my book,( although, I have to say I stopped reading his Seeking Alpha cheerleading posts months ago),regardless of whether he is behind being "DCBob"or "Justice". As Joe Light said on Twitter 2days ago: "Nothing from DC Circuit. Unrelated, there's a special place in Hell for hurting small investors with false rumors. (https://www.cadc.uscourts.gov/internet/opinions.nsf/OpinionsByMonday?)"
TH717 Twitter post from wed., 9/14/16...."The opponents of Fannie and Freddie are preparing for 2 impending defeats. 2016 will deliver where 2014 failed."
Joe Light on Twitter on tues. to TH717 ...."Taking a quick break from moving to let you know that still nothing from the DC Circuit. on to Friday"......any relationship to "moving heavy coach"...... I guess we will soon see?
Totally agree. One question:the issue of whether HERA applies pertaining to the NWS , (i.e. Did FHFA fulfill its duties as conservator in its application or was "the law (HERA) trumped") ,I would believe this to be a very straight forward and simple question for the Court of Appeals.If the judges felt that the NWS was in the boundaries of HERA, wouldn't they have decided this by now? .....and affirmed the Lambreth decision.
Correction....3.8 Billion ,counting Freddie. Not a bad haul for the Try!!. How can they refuse that in a setting of no perceived consequences? For comparison How many companies have net quarterly incomes over 2.5 billion!?
"no incentive to release".....perhaps,at this moment in time, but what about "reverse".Possible incentives to reverse would or could be : to avoid additional dirty and corrupt laundry becoming public and perhaps exposed on a major scale through the media,to eliminate several current lawsuits before a decision is made for them ,and to protect the Democrats position on housing as we move forward though the election phase. The reversal the net with sweep could have a very positive impact for the current administration at this time and for the future of the democratic party, particularly since the companies have now proven that they are no longer a considered risk to the "taxpayer" (i.e. Freddie's earnings when interest rates bottomed still allowed 1 BILLION bak to the Try) and have undergone substantial reform to the point that they are by far the best solution out there. (TH717 blog june 21st).
BTW,this is an excellent synopsis and worth a read (including the comments) especially for anyone new or old to the GSE story.....https://th717.wordpress.com/2016/05/30/the-unsealed-story-behind-the-2008-gses-conservatorship/#comments.... (apologies if this has been posted before )
This is a good post. Hard to imagine a successful wind down and a risky and unproven replacement plan when 1/3 of single family dwellings rely on Fannie Mae ,https://t.co/FYyrywlqve
his article on the financial crisis is worth a read as it reads like the movie "the Big Short" It was written in november 2008
Interesting,the "moderators" on TH717 deleted my previous comment today within 90 minutes. Thus would appear that the comment section there is being very selectively moderated and restricted to let a lot of comments in poor taste go through . The real question is why? And why restrict my comment? We know TH717 is active on Twitter. What is really going on with his blog ? And for that matter why did Maloni shut down after the "white boys" comment about the treasury? Why is access blocked to review comments on the Google board?why hire experts on damage analysis from EI?
Mr.Neuberger was recently hired by the WH along with Stuart Gurrea (Economists Inc. ) and on 11/24 were granted access to the protected information in the Fairholme litigation. They are experts on "damage analysis,financial economics,markets and securities ". The firms expertise is in the field of law and economics,policy and business strategy.In Nov. 2008 ,Mr. Neuberger wrote the following article on the cause of the financial crisis .This was in short form, put out as a comment just a week ago on the TH717 blog ,but after "review" was deleted. I present it here out of interest and curiosity.
http://www.glenbradford.com/wp-content/uploads/2015/12/Individuals-With-Access-to-Protected-Information-in-Fairho%E2%80%A6-3.pdf
"Financial Crisis: What Went Wrong?
Economists Ink: A Brief Analysis of Policy and Litigation
View Neuberger’s Profile
Jonathan A. Neuberger specializes in financial economics, valuation, and damages analysis. He has extensive experience in banking and other financial services industries.
Financial markets around the world continue to suffer from declining asset values, heightened concerns about risk, lack of available credit, and prospects for a global economic slowdown. The speed with which this crisis developed surprised many observers. Nonetheless, the seeds of the current financial crisis have been apparent for some time. In this article, I discuss several direct causes of this crisis and describe how these causes interacted to create the conditions for a severe financial meltdown.
An obvious starting point for this discussion is the U.S. residential mortgage market. In this context, the current crisis began as part of the late stages of a fairly typical credit cycle. In such a cycle, lenders gradually relax lending standards during the course of an economic expansion as they pursue increasingly risky and less creditworthy borrowers to sustain the expansion. In the typical cycle, credit quality eventually suffers, bank loan losses mount, and lenders subsequently contract the availability of credit. These kinds of credit-cycle swings are common and often have accentuated business cycle fluctuations.
In the current crisis, several factors combined, in a sort of financial “perfect storm,” to turn a typical credit cycle into a major financial calamity. First is the worldwide availability of credit and liquidity. For more than a decade, monetary authorities around the world have provided an accommodating monetary policy that has supported an enormous global financial expansion. In the U.S., for example, the growth rate of the monetary aggregate known as M2 has been almost 30 percent higher in the past 12 years than it was in the prior 12 years. Moreover, the Fed funds rate, the interest rate banks charge each other for overnight loans, has averaged more than 250 basis points lower since 1996 than between 1984 and 1996. This expansionary policy stance has helped to fuel rising asset prices, including tech stocks in the 1990s and, more recently, housing-related assets.
Second, U.S. financial markets have faced declining (or disappearing) levels of regulatory oversight. During the past decade, politicians of both parties supported efforts to deregulate financial markets, limit enforcement of existing regulations, or eliminate regulations altogether. These efforts enabled development of whole classes of financial instruments and investment vehicles that are largely or completely unregulated, and encouraged financial institutions to increase leverage and bear more risk.
Third, the pace of financial innovation has accelerated significantly in recent years, as finance professionals have adopted increasingly complex quantitative methods to design and develop new securities and to measure and manage risk. One area where this quantitative expertise was applied is in the development of new asset-backed securities. For example, while financial instruments backed by residential mortgages are not new, the variety and complexity of such mortgage-backed securities grew rapidly during the past decade. Mortgage-backed securities now offer a dizzying array of “tranches” or payment patterns in which mortgage cash flows are sliced and diced in creative ways. Similar financial innovation and securitization also has occurred with other types of consumer debt, such as credit cards, as well as with corporate debt.
The confluence of these various forces can be demonstrated by reference to housing and mortgage markets. Lenders aggressively marketed loans to potential borrowers, offering low teaser rates, increasingly lax documentation requirements, and small or no down payments. Consumers, driven by the prospect of unlimited growth in property values and easy credit terms, purchased ever more expensive homes. Lenders discounted the risks of questionable lending practices because they could easily sell loans to underwriters of mortgage-backed securities, thereby passing along the risk. Securitizers further transferred the risks of these loans to a global market of investors eager to purchase asset-backed securities. Finally, in the absence of meaningful regulatory oversight, few if any warnings were issued or heeded regarding the systemic risks posed by these activities.
Favorable conditions in financial markets were sustainable as long as the cash flows feeding these new and various kinds of securities were uninterrupted. The slump in U.S. housing markets that began in 2007, however, exposed the vulnerability of enormous quantities of mortgage-related assets. As housing values declined and foreclosures rose, the cash flows supporting trillions of dollars of such securities declined dramatically or disappeared altogether. Holders of these securities, including major financial institutions in the U.S. and abroad, faced crippling margin calls on leveraged positions or were forced to recognize substantial losses in their portfolios. In some instances, such as Bear Stearns, the losses exceeded capital reserves, and the companies declared bankruptcy or were acquired at fire-sale prices.
How will this financial crisis resolve itself? With respect to mortgage-backed securities, the underlying cash flows come from pools of residential mortgages. While the U.S. government has proposed purchasing billions of dollars of underwater mortgage-related assets, the values of these securities will only recover as the bottom of the housing slump is reached, foreclosures decline, and mortgage cash flows and values return to more “normal” levels. That situation has not yet occurred. Cash flows from other types of securitized assets are similarly uncertain as economic conditions continue to deteriorate worldwide. Moreover, heightened concerns about counterparty risk have added to uncertainty and frozen many credit markets, including interbank markets. U.S. and foreign governments are proposing policies to provide liquidity, financial guarantees, or otherwise attempt to place a floor under the values of many types of financial assets and to unlock credit markets. The success of these efforts remains to be seen."
First half of the article is on target with Mr. Layton, but then she gets lost with the rest especially Stegman. I would imagine it would be difficult ,unless they stayed on top of this daily to keep up ,or for that matter even believe all that has happened with the GSE’s (never needing a bailout, accounting fraud by the government , violation of HERA,an illegal NWS,several active lawsuits pending, bailout only 132B with 239B paid back ,and so on). If someone tried to tell me this information ,I would likely think they were making it up or having some sort of conspiracy theory. But on only a few sites due the real facts exist..... As to the media,well they are either corrupt/bought (like the staged release by Weiss,Lew and Stegman this last Monday) or simply uninformed( perhaps like this author) and thus the lies become reinforced.Even seasoned authors,(McLean) can get real vague in areas and are left with meekly /carefully polite questions rather than truthful answers,especially since the the majority of us grew up trusting our governments. Today corruption in the governments are the people's greatest fear.... Need to again go to the comments section and spread the word and where to find it
Navy, You may want to look at this article ,if you have not already seen it. What I found interesting,the risk sharing not withstanding,but the major banks that were involved (list at the bottom ) that are helping make it happen,http://www.housingwire.com/articles/35420-fannie-mae-actual-loss-risk-sharing-deals-will-be-the-standard-moving-forward
Thanks..... I am sure we could add details to it. Also remember reading that BO met with Lew a few days before the MBA convention, this may re inforce that it is unlikely Steven's comments had them so rattled as takes a little planning to coordinate their (Weiss,Lew Stegman) with the WH and then secure the timely media exposure. But something sure got a lot of people rattled.....agree the "Forest".
looks like few nerves were struck all over! Timeline is interesting:
early October: things are smooth, either good or neutral news ,things progressing
10/6: Ackman makes the ever so slight reference to a report the gov't may be looking at
10/6: politico Alpha confirms a 110 page report exists to the gov't all about "affordable housing","front-end resolutions to litigation","options to ensure GSE's remain viable" etc.
10/7: TH717 feels report sounds very suspicious as to its authenticity
10/7 : senator Corker gets airtime to deny big time the report and states companies should be eliminated , and congress has been "inept" at their job in this regard.hedge funds started the "rumor"
few days later he does a 180 and retracts eliminate the GSE's to reform and keep them,like a utility
10/17: TH717 email Q&A , all smooth and everything sounds good for the GSE an come away with feeling of a release sometime before the courts decide and presumably before the election.
10/19:An unprecedented WH/ treasury media outburst, Lew,Stegman,Weiss denying the report and that there is no talk of recap and release, will not go back to the "old days",won't listen to "noisy shareholders,"comprehensive reform needed" and sweep needed to cover the open risk factor to the taxpayer.
10/19 to 21: Watt and CEO's indicate the GSE"s are way ahead of schedule on the sharing of up front credit risk with the private sector ,which has now become the standard and will be 10% of their book by the end of 2015, and that release "not in the foreseeable future"( really like this part btw)
10/19: TH717 very disturbed by the gov't 's tactic above , and the WH and TR throwing affordable housing "under the bus", And a very impt depo in the Fairholm trial coming up that may have attempted to be "quashed" (love that word) by the defendants.
10/20: Politico Alpha re confirms the report by Sebastion
10/22 Th717 inquiring about a 2nd confirmation note as info of the report may be helpful with the courts and potentially could have a purpose ........
.......just waiting for what is around the next corner!! But my conclusions so far are that the report seems to exist, and it has stirred a lot of things up but importantly it appears the required "comprehensive up front reform"has and is taking place and appears the primary mandate for release?
And this important tidbit of information from Professor Larry Crumbly’s report and analysis of the forensic accounting; further substantiating that the GSE’s financially did not require a bailout and/or for financial reasons, need to be placed into conservatorship.
]i]“Spittler and Ciklin suggest in their report that had the Federal Government simply made a line of credit available to Fannie Mae, then no senior preferred stock would have been issued. Fannie Mae actually did have access to a Government Sponsored Enterprise (GSE) Credit Facility,which had been created by the Treasury in September 2008. The GSE credit facility provided Fannie Mae with an opportunity to borrow short-term collateralized loans at a LIBOR + 50 basis point rate. The facility was not used and expired on December 31, 2009.”15 The average LIBOR rates per month are shown in Appendix D, and ranged from a high of 3.044% in September 2008 to a low of 0.161% in January 2009. Adding 50 basis points equates to a high of 3.544% for September 2008 to a low of 0.661% in January 2009. As seen in Appendix D, the monthly LIBOR rates would have yielded less than 1% financing rates for Fannie Mae for every month in 2009, the same period for which Fannie Mae first issued senior preferred stock to the Treasury carrying a 10% rate. Since management was competent, they should have explored all financing options, especially ones that had a 9% difference in financing rates. Myers and Majluf’s (1984) Pecking Order theory suggests that managers prefer to finance operations from the lowest cost of capital. Typically the pecking order of financing options results in management using internally generated capital first, then debt, and finally equity issuance.
In the situation of Fannie Mae, had they not had sufficient internal capital outside of the conservatorship, it seems as though management should have preferred to use funds from the credit facility before issuing senior preferred stock. Management’s actions in issuing senior preferred stock indicates a willingness to pay a 9% financing premium at a time when Fannie Mae was potentially financially distressed. This decision suggests questionable management practices at best. However, this practice is consistent with a notion that the conservatorship damaged minority shareholders at the benefit of the majority shareholder. In this situation the majority shareholder, the Treasury Department, enjoyed a 9% borrowing premium by purchasing senior preferred stock instead of allowing Fannie Mae to draw on the GSE credit facility.
Ref 15: www.reuters.com/article/2008/09/07/us-freddie-fannie-creditfacility-idUSN0733407720080907 www.fhfa.gov/PolicyProgramsResearch/Research/PaperDocuments/20100120_MMNote_10-1_508.pdf (pg. 4)
III. GSE Credit Facility
What it did
The GSE Credit Facility ensured that all three of the housing GSEs had access to financing from the Treasury through the worst of the crisis. Through this facility, the Treasury stood ready to provide secured funding on an as-needed basis. The facility ensured that a lack of access to funding in the open market would not prevent a housing GSE from conducting its business, including making timely payment of interest and principal on senior or subordinated debt obligations.
3 See www.usdoj.gov/olc/2008/treasury-gse-ltr-opinion.pdf. 4
???
When it expired
The facility was not used and expired December 31, 2009.
This begs the the question, If the bailout is obviously unnecessary financially for the GSE’s, then why?, for who and what ulterior purpose? Is this why there is no transparency with important details either hidden or redacted? Who is being protected and why so? If not financial, then Political? National or Global ?Is this what the Government implied in their defense that this information could have disastrous effects on the economy if exposed? Is this why Ugoletti may have committed perjury?Fanniegate indeed! and a real Pandora”s Box
understand . thank you. best regards
yes that is unusual! German Fnma usually follows the US from the market day prior. Average volume is up over 4x less than 1/2 way into their day and stock @ 3.92
Hey , you are not whining . Really this is bs. We are just being duped What gives here,. These entities should have been released already. we are simply being strung along , especially by that th717 stuff . Give me a break already . "on the ropes" are we . Yes, right . Where i can i buy a piece of the Brooklyn bridge? I think we are being fed a lot of false hope. There is no end to this. The lawsuits are unlikely to be successful ( wishful thinking...who wins over the Gov't) and it will be dragged on for years.. good luck with a 4th amendment . Good luck with the FHFA reversing this with the Treasury blessing . All talk and wishful thinking.
LOL ....Funny you should say that. I also dreamt the same thing ,but it was mid October 2 weeks before the Lambreth decision and the stock collapse. The dream felt good though.
Further thoughts on the "sealed Fairholme response" on the gov't "stay"recommendations to Judge Sweeney:
Why "sealed" for only the Judge to see ( i.e. not for the defendants (gov't) to see)? Why delivered at the very last minute of the deadline, and 1 1/2 days before Watt's meeting with the government financial committee (including senators Warren and Warner, the authors of yesterdays unexpected support letter to Mel Watts)? If I were the defendant, I am sure, I would be wondering what was in Fairholme"s response and depending on what it contained , as the "gov't",and what they already know but have not publicly said ( particularly if anything in there is along the lines of the JP Morgan whistleblower), I ,as the defendant, might want to see a settlement ....a release of F&F.....a new amendment before the end of discovery....or before things start to leak out. ........... I
do not really know how else to explain it.
Being sealed suggests that it contains potentially damaging info to the gov't or possibly a settlement, or both.It would seem ,if I was the plaintiff, getting the response out sooner ,to move things along would be the way to go, as it was in filing the Perry appeal.Why wait until the last second to drag it out?
Watching....reading as things continue to unfold for F&F, brings a new meaning to the word "political" choreography! Can't wait to see what happens next! Curtain time 10 AM for Act ? , as Mr. Mel Watts steps up.
:
thank you for posting. Nice article. Supports the enormity of the economical ripple effect that will be potentially gained with the release of F&F. Credit going to the current administration if they can get it done soon enough before the 2016 elections to show the economic benefits.
you have to love this roller coaster!!
some further thought and consideration regarding Carny's Wsj recent piece.if we subtracted the delusional accounting, we are still left with trying to understand its timing and purpose. Why randomly submit this 2 days after a substantial earning report and prior to the Monday market open?the only purpose, that I can conclude is that his intent was to prevent investors from buying the stock and encouraging those that have not done their own DD into selling (ie. the lemmings). But why now??.... I doubt very much that his purpose is to sell the stock short or even to set the stage for others to short it ,as that would be analogous to a player fixing a game with potential consequences. Rather, I believe his purpose is to attempt to keep the stock at its current level as it prepares for release from conservatorship. TH has suggested that the timeframe for this may be 6-12 months, but I also remember him saying that he had recommended the release prior to the elections but that his advice was not listened to. Presumably this was for political reasons and thus the assumption is already set to go ( be released it now is just the timing). It strikes me, that it would be to the government's advantage to make this a sudden event so that the investors do not appear favored (benefitted)in the process.further with the lawsuits pending, and dangerous dirty laundry accumulating, it would appear to me that release is more imminent then we may think.Other's comments in this regard would be much appreciated.
lol....Grew up watching him play . Cheering for the Canadians.