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Sure.
Essentially the original poster was pro Fannie and Freddie. As i am ... but,
they are willing to sell the entity and shareholders down the river with all the dilutive effects of the government.
They've bought into the 10% interest rate (which is 10x the governments cost of capital.
They've allowed the warrants which is theft.
Doing these things will crush the potential of these entities to raise capital and continue supporting America.
Remember, Fannie and Freddie have to create "capital" as a backstop to potential future losses. The reality is they can't do it without being released. But, there would be some captital raise. Doing so with an 80% dilution, Will leave the shareholders after a secondary offereing or some of them wilth around 12% of the equity. Instead of around 90% without the warrants.
Plus, setting fannie and freddie free with no warrant dilution will be accretive to the shareholders that will sell the stock and buy stuff. Buying stuff will be great for the econeomy And selling shares will be a windfall of tax revenue for government. A win /// win situation.
So,... i simply wrote....
No to the OP.'
Sadly, i don't believe the first one.
really... the "ceo" of the irs having 100% of their email correspondence corrupted ? with out any backup? And, no computer or shared network drive to store documents / attachments...
Its unrealistic to believe. Portends a much larger cover up. So, it wouldn't put it past me to believe they wouldn't try such silliness here.
Yeah... Someone smart enough to understand the financial statements that were being put out and how the "losses" were generated.
Gold Star for you brother.
A winner.
Wonder if two government hard drives will have gone bad in the last two weeks? And all the data,...washed away?
So the FHFA is settling with the banks and such. But theFHFA is not Fannie and Freddie... so Fannie and Freddie can still seek redress because they haven't reached a compromise.
If ALL the recovery doesn't go to Fannie and Freddie then they are n't settling.
Since FHFA is dictating terms for them the governemnt not fannie and freddie.
Don't forget.. GM filed Chapter 11 and the government screwed the bondholders in favor of the unions.
The governemnt Lost 30 Billion on GM to boot.
and have "Made" if you can use that term $70 Billion on fannie and freddie.
If the swipe agreement isn't changed. Then fannie and freddie should continue accruing excess reserves.. and pay no amounts to treasury until - they are released from bondage.
Since they only pay "net income" then don't report any.
Next - the swipe is an unlawful tax imposed by government on a private company = to 100% of its net profits and that is illegal.
I do believe.
Those douche bags release fannie and freddie and its instantly higher than 20,
I think i could be happy with that outcome.
The swipe is really akin to a 100% tax. Since it goes to treasury and is based on no premise.
Isn't that type of a tax illegal?
Yes.
This perturbs me to too.
Very irritating paying any credence to it.
Problem is the fannie and freddie business model makes sense.
Its not overly complicated and is easy to implement.
No change.
I've watched Fannie and Freddie retreat the past week in line with the overall market. And a little worse overall. But, in my view, nothing has changed relative to their situations.
Sure Mary Blah Blah came out with an idiotic statement and the fhfa did as well; they both stated the obvious. AS is right now with no change fannie and freddie would have a hard time accumulating capital. Gosh, wonder why? As for the fhfa; they've now admitted that the money was lent was never needed by the reversals of the over zealous accruals and reserves. Need some finger prints or dna to make the charges stick?
Very nicely done.
Except the amount not necessary is larger. Remember the old interest on interest thing here. Had they not borrowed any money the wouldn't have owed any interest. Fact is a big part of that 187 that is bantered about.
I'd easily say the amount borrowed absent the agenda, the unnecessary reserves and write offs would just about cover 187 Billion.
Not opposed to some housing "reform" - but what is needed doesn't require legislative approval.
At some point the consensus will evolve to this.
Best regards and thanks for all you do for everyone.
J
No message.
You'd think that would be the case.. But the government would likely appeal any such ruling.
It will get interesting from there.
Whoa .. nelly.
You start off sound and then get back to that "nobody" business.
The sub prime mess was not caused by fannie and freddie. Remember they don't originate loans. And to a great extent their investing standards (were set by government mandates) Meaning that, sure the government "stood" beside them and guided them... and took no responsibility for the messes they created.
Fact is the the government does this because it can and as a result it has some responsibility for the mess it created.
The warrant, the high interest rate, cramming it full of cash by excess reserves and accounting tricks (in order to go big in asset purchases) and the swipe are all a raping of an unsuspecting victim.
Do you really honestly believe what you have written?
Its just so jaded and lemming like.
Can't you understand what occurred and how it occurred?
You set your self in a camp saying taking people's hard earned assets is both legal and appropriate. I just don't buy that argument as saying just because its done its okay. There are a whole host of things done that aren't right.
The dilution that would be caused by the warrant on Fannie and Freddie are devastating to the capital structure of the companies and in NO way if exercised would it "repay" the government - especially since its already been repaid. The warrants are crippling if exercised; to the existing shareholders who owned 100% of an entity one day and the next would own 20% for receipt of NO value. That is a taking, remember all the money crammed at Fannie and Freddie have been repaid at 10x interest rates. And to boot, the money was never really necessary (proven undeniable fact no one has legitimately disputed).
If the warrant were exercised that would mean F and F were to survive; which would be a good thing. But, the proceeds of the shares would go to the Treasury not Fannie and Freddie. So, assuming this happened and the Swipe ended; Fannie and Freddie would be 140% repaid the borrowed money; for Fannie have 5 billion shares outstanding, and no capital. So, it would need to raise it. In order to do any offering or a series of offerings it would need to raise say minimum $40 Billion. At this would sow 2 billion more shares outstanding and so now... those that had 100% ownership would now have 14%. And it gets far worse as it becomes a circular downward spiral.
Whereas... without the warrant and Fannie raises $40Billion it does so offering 250 Million shares; So it has around 1.4Billion outstanding and the old shares own 88% or so.
But, hey if that is what you are postulating for; great for you, you just don't understand the numbers.
Personally, I think you are incorrect.
You pass on the key factor and difference.
AIG was failing and insolvent
F and F were adequately capitalized and not failing.
Only thing was the Government needed F and F to grow and be flush with cash to absorb all the bad paper issued by the banks, which resulted in losses and then recoveries from the banks.
I appreciate your zest but please be truthful in your posts and provide complete information.
Glad you agree.
"This may have been technically true at the moment the agreement"
The rest of what you write is really speculative. And is provided no weight of argument except for argument sake.
Now to my opinion.
I feel the government over reached. And as is often the case when folks go for all of it; they end up with nothing because what they did was patently wrong. So, in my writings, I've stated and will state again, that had the government done this appropriately and not gone for the jugular they would have negotiated for fair compensation.
But, in like every other public emergency - there are laws against looting and gouging. Think of it in a rational sense.
Please don't try and justify the raping of fannie and freddie.
So, had they taken a little skin, instead of taking it all, then sure, okay. But in so many instances, when you go for the homerun, you strike out even if all you needed was to put the ball in play.
They got greedy and for that they are due NOTHING!
Not being to particular.
But read it again.
The Warrant itself - was "GRANTED" meaning it was given for no consideration. Chess, this means it was provided for NO MONEY.
What you refer to inappropriately as the price paid for the warrant is actually the "exercise price". The exercise price is the price to be paid on a per share basis for the shares "acquired" if exercised. Which has not occurred.
So to be clear.
The "WARRANT" was not purchased it was granted; granted is a gift; purchase means for consideration (money).
Its important to know the difference and apply the terminology appropriately.
80% of a solvent company in a manner like they did; that does not enrich the other shareholders nor is voted on by the other shareholders is ravenous.
Fannie and Freddie did not have the "power" to say no to such ridiculous costs; Removing their ability to say no and negotiate terms that were reasonable; IF they needed support to carry on their book of business was defacto taking. Because, they the entity no longer acted of their free will.
And that folks will "seal this deal"; because once their ability to say "no" was removed they were no longer operating the company and it became self dealing.
Had they written warrants for say 20% then, I would see that as not unreasonable, but they went for the jugular and when they did it became excessive. Like the 10% interest rate; when the government's cost of capital is 1% (remember the warrants were to have given government majority control) How could they then transfer price at a markup? Fact is the government just plain got greedy. And instead they are due nothing.
Chess..
You write..
"The government purchased the warrants as an insurance policy taxpayers would not lose money. Well, there was no loss so they have no right to an insurance claim. "
But this is not true. The warrant(s) were not purchased. They were written and essentially taken.
You jest...
Just one indicator...
Market price in 2008 at time of so called deal was $6 . Exercise price is $.0001.
A second is the "coercion"
A third is the self dealing.
How does that come close to anything that isnt a taking.
Did you take a stagnant point some 30, 60, 90 days and "back" test either method?
Since Andy and you are starting around October. Did you consider the data points that could be predictive of say April 30, May, 30 and test whether the prior data sets where predictive of the averages seen on those days relative to the slopes being created from the actual results?
Seemingly the appreciation if we stay on the current trajectory will accumulate so that it will not be a straight 1.4 cents per day for the next 6 years. As at some point percentages of appreciation on the base values would dictate expanding data points.
Of course there is no guarantee of the accuracy of the projections, if news one way or the other is released; that could materially alter the path.
Rek..
Your response here is really not following what the orginal poster wrote.
1. The original poster wrote regarding the BOD and the Take over. Your writing and mine are similar. In that I write it was not and you write it was not necessary for approval. I think I recall that approval by the BOD was given. It was given because the government told them they would not be prosecuted if they did. In any event, the approval was necessary because none of the factors allowing conservatorship had been met. The approval, however was as documented in the published book, and news articles, coerced.
2. This argument can go either way. I think its a stalemate and opinion based; Its a no win for either side of thinking and therefore, the tie must go to the runner. Which is the company which was fine and in good health, adequately capitalized in July was not on deaths door two months later. Also, your comment "depression" would have meant the end of the GSE's is argumentative and not fact based. Its pure speculation; Remember, not all loans were bad and not all homes that went "underwater" became foreclosures. And even with foreclosures there were few if any "total" losses.
Delusional.
1. the conservator ship was never approved by the board of directors - in the normal course of business without undue influence. You'd have to call your self stupid if you thought otherwise.
2. Fannie and Freddie would have survived just fine had they no been invaded. Remember, if you can that both were the ONLY game in town to do ANY financing support of the housing market. They were near monopolies with plenty of cash and ability to finance their business.
The problem was they needed to grow and grow rapidly to absorb all of the private market leaving the market.
You are a historical revisionist. Next you are going to say something really insane like Carter was a good president and interest rates were naturally going to be 16%+ - as predicted by the writing of Friedman.
3. You weren't listening at the time of the coup. If you had you would have heard it. Things were moving really fast and everyone wast postulating who would fail next. There was a lot of "short selling" and pushing companies into the crapper for no reason. CBS for example got down to $3 a share. It was a lot of ... If "California suffers another hurricane and Disney closes all its parks"... " its gonna file for bankruptcy" and all anyone heard was "disney is gonna file bankruptcy" most became self fulfilling prophecies without any cause or real reason. Case in point were Wachovia for example.
4. Wrong is wrong. Regardless. I can't comment on your justification for legitimacy, "no one complained" to say it was right; when in reality people like me did complain; did state the truth and were appalled.
5. I 100% disagree with you on your last statement. I think the warrant were taken. Looted and became ill gotten gains of a theft. I think it all stinks with lots of rot. I think in order to fix it you have to get back to the bone and clean house. There is and was no cause to do what was done. The government cut off limbs and amputated arms to fix a nose bleed.
But are happy because they "saved" the patient. But destroyed them in the process.
The evil here are the evil doers. Not Fannie and Freddie.
But keep writing wrongs and people like me will set the record straight as I have with your ramblings and as well with a few others on here.
Pretty much on point to my point and likely true.
These are facts. These are comparative figures which are hard to dispute.
Its going to be hard to litigate these facts. But the government will surely try.
I still say it was wrong.
Okay... I'll try again.
The "concept" of conservatorship was not unlawful. In my opinion.
How they did it was not proper or justified.
See I agree with you 955
I like poking fun, big yack. You amuse and entertain. Like John Stewart or Connan O'brien.
But I'll try once again.
The conservatorship "itself" is not problematic if not for how they did it which was wrong.
Seeing an opportunity to jump in and after the blood letting and then point out the obvious is not wrong. In fact its righteous.
There are a lot of folks that were damaged by what the government did; LOTS.
There is nothing wrong with being of help.
And lets be really clear. Their is GREED here.. and it was the card first played by government in the taking of fannie and freddie. The warrant was wrong and greedful. Shameful.
lol...
read my post - that confirms how wrong you are.
Its worth as much as what you link. Sorry.
As for me filing a lawsuit that would be like a fly attacking godzilla. I have some assets but pale in comparison to what the government has access to; and not that stupid as to pick a fight i can't afford to wage. But, just because I didn't sue the governemnt for what they did DOES NOT make their actions just.
Its a cruel world Mr. Idealist sometimes being right isn't enough.
Deal with it.
Fannie and Freddie their share holders and the tax payers were taken for a ride in 2008.
LOl...
The conservatorship in its own right - was not unlawful. It was just unnecessary.
The actions once the coup occurred the behavior including giving away 80% of my shareholder value was not "conserving" it was pilfering. Especially since the fhfa gave it to themselves (or its alter ego - treasury - which is just part of the same beast)
Further actions including the delisting, the swipe and the accounting silliness makes what they did laughable and actionable.
Not to pick at you... but I thinks you've left off some guy named...
Carl
I think, if i read properly he's got 10-13 Million Shares... Ought to be enough to qualify.
I believe I read where the preferreds were not "cummulative" so there would be no back divi payable. They would need to be paid before commons.
However,
I would expect these two to spend a year or so building capital rather than returning capital to shareholders.
Its just more prudent that way.
Anything north of $125 would be very good. $325 would be magical.
Thanks
I'll read it later.
actually reviewing an emergency motion for relief comprised of 50 pages and 50 exhibits for a client.
So, I'll get to it
This is silly nonsense.
I'd say the fate of the us as a free just governing body rests in the balance.
Trust in government is decreasing daily.
Many coexist with "government" all around them; but don't count them as friends or friendlies.
What your saying is ostensibly 'collusion' between the parties to take what did not belong to another. Its all fun and game between thieves.
There really doesn't have to be a clear cut reason why someone stole from you or helped someone steal from you. In this case its not important to say, hey, the fhfa got no benefit from helping the government swipe all that money and try to put f and f out of business. Sure, they could and they did, but better yet, if there was no reason to support the takings then perhaps they weren't thinking for themselves and thus were being unduly influenced by treasury. And thus acting in consort with government makes them on their team and thus ... simpatico.
Listen, i get it. Its a confused mess when first they set about to deceive.
There will be lots of legal double speak on this; but what really matters is what happened, not how you justify it. Fact is at the end of the day, all the money was looted. Not how you justify it.