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You know... 44... I've read much about people postulating that on tuesday the Fhfa is a private company but on Wednesday its government and then again of Thursday of a full moon its neither, except of three days of the summer holiday when its a new moon and the the sun rises to your right, except when it rises to your left then.. its a non profit.
See what I mean; its all sorta nonsensical. Fact is for commoners and that is what the law is for is commoners; either fhfa is governement or its not government. It should always be that way in all cases and in all ways.
Thats like the fdic or the post office; or us navy or army. etc. Otherwise - who would know when to ask? Its just too confusing for the average citizen and that ought to be who is protected.
So, while I am sure people will disagree and maybe there is some stupid "case" law and opinion that supports the either or mentality but simplicity ought to work. Cause its too hard to figure out.
Therefore the fhfa is either government 100% or not government 100% but not both. That would be just plain stupid.
You know... on the surface this would make sense. But, in reality it does not.
Because until the warrant is shredded, either willingly or by court order; anything that is "left" in the entities, assuming the warrant (which in my opinion is for shet) is exercised; then you would then (as common holders) have 20% of 20% (or 4%) and the Guberment (theives) would hold 96% (80% of the money first pass) and 80% of the 20% residual.
So,
Bad idea.
Least we forget the earlier arguments.
Remember the FHFA has already postulated that in its capacity as Conservator its not "government".
So, is it or isn't it?
If it is a non public entity then there is no "executive privilege" that can be extended. Last I saw, IBM didn't have such luxury.
If it is an agency of the US Government then - there are other serious consequences. One would be the fact that the Governement took control of Fannie and Freddie and "gave themselves" 80% ownership through free warrants and then swiped 100% of the "Net Income" on the reversals of all the phony accruals all in a deal negotiated with themselves.
It don't get any better than this.
Again, pick your poison.
Put a tent over it and sell tickets. This circus is just starting.
Chess the Catch 22 of the "deliberative process" is that...
1. if they are "thinking of releasing F / F and such" and there is a plan being formulated for such; and of course they already released that "stress test" BS ... then ... We get released and rewarded....
IF
2. if they are not "thinking of releasing f/f and have no such plans... and are doing nothing in that vane. Then they are in violation of hera, they've committed secrurities fraud and they are now subjected to serious problems. Beacause unless they redefine what Webster defines a "conservatorship is is is" which means ... rescue, reform, release.... then they are totally for shet.
Its like pick your poison. Either arrow or bullet? Which one will hurt "less".
There are serious credibility issues here. And unlike other recent government scandals, the WH and such have not been able to ignore this long enough to go away.
This is a BiG F'ging Deal
Loven it.
NM - Delete me.
I am not the expert on this. So I will just give you my average Jeddie thought.
As much as I would like to see the people that perpetrated what I think is deceitful and despicable acts upon the US and Fannie and Freddie shareholders. The "criminal" element that would get any average company and their officers and directors in hot water won't even get "lukewarm" for these people.
So, no.
But, I sure would like it; if we'd recover above normal profits.
Just won't happen.
fairholmes atty will file a response to the motion for protective order. Then they'll have a hearing.... its delay delay delay. Could be 60 days for a hearing and another 40 for a ruling. Unless the judge - rules against the government right off.
These are the games the attys' play, the court allows, and you only hope you live long enough to see the outcome of.
Sounds like Mr. Watt needs to be deposed so that we understand what his comments are "deleteriously" speaking.
He's made a comment / appearance in this matter... now defend it.
If the government gave back $30 Billion it took greater than was funded (inclusive of extra $$ on unnecessary funds) or so... and they canceled the warrants (they are the product of chicanery)
Then Fannie and Freddie could easily raise or earn out over time adequate capital.
What hold them back is the aforementioned and the "government policy directives" that hold them back or force them to invest or take on underpriced risk.
This is an easy one to fix.
I would agree; but my vote here don't count.
Thanks for the plug andy.
I came up with it; and have been calling it the "swipe" now for some time. Figured maybe it was tongue in cheek and might would take hold.
I would figure the % performing loans since 2009 should be higher that 96. Since the total % "serious delinquent" is around 2.17% http://www.fanniemae.com/resources/file/ir/pdf/monthly-summary/033114.pdf as of March 2014... I'd expect the % since 2009 should be 1/2 that... so that ought to be around 99%.
Zarg,
You seem level headed enough.
I'd concur with the pricing - with and without the warrant.
My thinking is there is a lot of "stink" in there and at some point the only way for them to "cover it up" is to hope it goes away (which it hasn't) or deal with it. The best way to deal with it is a settlement of some kind. I hope they cancel the warrant and go back to business (pre 2004) or so when they just bought and packaged loans as opposed to other things. Remove the politics and charge a fair price for the services.
Do that.. and i'd concur with your pricing (with or without the warrant) which i expect to be quashed.
Zarg...
I too hope it works out.
My hope is for Fair Value. I peg Fair Value for Fannie and Freddie at North of $125.
If we get 1/2 of that ... I'd be really happy.
If we get 1/4 of that ... I'd be pleased.
Many people who think they know me, would believe falsely that' I've had it easy. But, its not the case.
I've hedged my self on these two. If it works big then its great. If it goes to Zero; I'll be bummed but still in the game.
Some people have bantered around a price of $325. I don't see that happening. Others, as much as $250. That would be fab... but may not be in the works right off. It may happen, but it'll take 10 years.
Big yank... its more or less in the consideration of what an extended period of time is.
is.
There were some dips into it and some periods of time in which the daily lows were down there....
I'll plead the Bill Clinton version of the definition.
which is is whatever I say it means.... lol..
ps.. you may be more right than me; but like our good pal Bill, I'll never admit to inhaling.
Peace.
You do realize that of the 180 Billion ... you assert. $30 Billion is "interest". Also, since only $30 or so Billion may have really been needed (some people assert $0) ... a return of $30 Billion on the $30 Billion borrowed is 100% return. And if you compute $30 Billion profit on $0Billion actually needed... well that's a pretty darn good tooten return.
So, be cool... its all relative...
you know between kissin cousins.
Nvy.. you are right...
but there are peeps on here that will tell you that none of that is proven facts and therefore its wrong to assert the misdeeds of others.
You know... they type (know it all nannies) Who can't do so they say.
Keep it up!
Whats wrong is wrong. No matter how you spin it.
Shame on any investor... you mean like the US government that has self given "right" thru an illgotten warrant... to purchase 4Billion shares of Fannie at what is less than a fraction of a penny.... yet are would be worth north of $50 a share.
Lets see how shameful that act is (or how .. profiteering)
$.00001 to $50 would be a return... I couldn't even fathom and that's not ...
worse than any hedge fund might contemplate.
So, who is the real demon here?
Ackman or (Bernanke, Paulson, Lockhart, or whomever or whatever?)
Zarg! Agree
Fannie and Freddie shares ... never traded for under .25c per share - for any "extended" (more than a day) period of time. I find that truth dismissive of your post.
Don't forget they took 2.4B of derivative losses...that could reverse this quarter or next... and are one time things.
325 would be ... beyond wonderful... 1/2 would be good to.
This was one of my big... things when analyzing fannie and freddie a few years ago.
in 2007 the bad loans were traunches from 04 to 07. The older loans were performing and if not ... not under water. It was this time period that had issues. But, then not all the loans were bad. And not all the bad loans were all bad.
So... do the math and then compare the loan loss reserves to the historical write offs.
Well you would quickly see what I saw.
And now that some lending standards have kicked in... these period loans are now being righted and ... presto ... wholla... magic.
Rocco2.. i see your post as 100% accurate and believe there is a whole host of collusion, conspiracy and acts done to intentionally do what has been done.
its my opinion... no facts to back it up. other than my learned opinion.
Without the swipe agreement... share price would be 10-15 easily right now and heading for mid 40's soon.
You say " ability to predict"... companies... large ones.. issue guidance all the time.
For example today I went to the Home Depot Shareholders Meeting. Frank Blake stated that HD will likely hit $4.48 (i think) 2015 eps...
Now... how do they give guidance like that... and fannie / freddie can't predict Green or Red? ... really?
Not a chance...
Predicting profits for them was easy considering all the one time items had been taken and the reserves were so bloated as to make it laughable.
So there was nothing left..
Plus. the core business was always profitable.
But, what do big companies really know... after all apparently no one issues "forward" guidance and that usually comes pretty darn close.
Law breakers in "high" office are treated with "white gloves". The evidence must be large and irrefutable.
Whether its Jesse Jackson, Jr. or the ex Governor of Illinois Blagovich until the case unwinds and the press gets involved the evidence must be strong. For actions of a lesser extent, those close but only seemingly minor infractions, the party in power - case in point Eric Holder - can act as a strainer against most all but the out right situations, seemingly in cohoots with those believed to be transgressors.
For example the bengazie mess, the irs going after conservative groups, or any of a whole host of recent administration malfunctions. Seemingly, there were some rules broken in those situation either in the acts or in the "cover up" of the acts, but don't expect Holder to prosecute anyone.
As for Lockhardt, Bernanke, Frank, Paulson, Geitner or whomever else was involved, the level would have to be so high that the current administration would have to act. In the case of Fannie and Freddie, while they may have all done "wrong" in a moral sense; and technically, they may have all colluded to take value from shareholders, the real possibility to any prosecution is very very very slight, if not probably incredibly remote. I'd say the "strike price" of the warrants "issued" have a greater percentage probability.
Now none of this is not to mean that the courts won't find the actions, in a civil sense wrong. But in a criminal sense, I couldn't see it happening, even if they earned it.
In any event the "great O" would pardon them.
Thank you.
Just because its "legal" doesn't make it right. And unless challenged allows bad deeds to go on; only to be repeated. This is the very premise our country was founded upon. Some people fight and speak out against what is wrong others, justify it.
I am glad there are average folks fighting for our rights and not just listening to the know it all types who spew "so called" facts but couldn't operate a toaster. Thank you to shareholder unite and other groups taking a keen interest in doing what is right by supporting Fannie and Freddie. There is no reason to undo a system with generational success behind it only to leverage into a vast unknown.
This is a big hold up on any significant private money into the housing arena. The rule change risk is great and few likely want to have their hard earned money diluted.
Thank you. For seeing through the charades of legal mumbo jumbo. Where so many have failed a lemming you are not.
Fannie and Freddie were taken.
Legalized theft is still theft; however legal until exposed and those perpetrating the act become accountable. Whether they ever see a courtroom or not they will know. That is why we have a court system in this country and the ability to hopefully have our day in court.
Release, restructure and reform.
Wow...
Obit you are FINALLY starting to wake up and figure it out.
I applaud you for coming around.
How's that Maxwell House.
.....
Warrants... offered legally and not at the end of a gun are good viable trade. Warrants pilfered are ill gotten gains and become stolen property. Don't be a party to a theft.
Not to be picky..
But with Fannie trading at $4 bucks and release o... probably around $40 bucks... why would you expect a forward split?
I would agree with you provided the Warrants were canceled and the share price reached around $300 a share. Then, yes 5 for 1 (forward) split. But at $40 to $60 bucks a share.. I don't see that.
The warrants are boot - part of the ill gotten gains or enrichment / fruits of what many including myself believe was coercion and otherwise undue influence in obtaining.
Part of the "heads hit the ground" business / tell the Board either you go along with this take over "voluntarily" or we'll subject you to prosecution for your roles.....
Further they represent a MASSSIVE dilution of the stock - and were not voted on by the shareholders.
For these and many other reasons too numerous to get into it is my knowledge and belief that any court of reasonable consciousness would invalidate them.
I've said for a while... that if we get to $10 ... we get to $100.
I still believe that.
At $10 we become a "noticeable" commodity and if we sustain it then it will be free and running wild.
But, yes... first... in order to get on up where she belongs... fannie first has to pass ... $10 (or 8 to 12).. so I agree.
You do realize that people ... whomever they are .. .are complaining of the alleged "profiteering" of the hedge funds, when in reality the biggest hedgefund the government has now taken well over $60 Billion dollars (or abouts) of money from these two greater than what they "put" into them.
This amount includes the $30 or so billion of "interest" payments they took at 10x their cost of capital.
I see the biggest farce the governments position that the profiteers are anyone else but themselves.
Now we are speculating again.... I'll play.
My worksheet is highlighted at the $125 mark.
Not saying that is full value but its a starting point.
Watt has no idea what crappo bill is about?
Watt is an idiot. He should be fired and given a shovel.
How can Watt say the things he does... what is his responsibility.
If his office isnt' or wasn't responsible for fannie and freddie or agreements in place - is his position that allowed the sweeps... and now not his responsibiltiy to manage those sweeps or the business?
That is like saysing there is a mortgage agreement in place that pays 10% intereset and I assumed the loan. But not my role to try and decrease the cost. Or
Watt is an absolute flipping IDIOT
OMG
He is a nut case.
How does he get dressed in the morning?
Its not his job to make his bed, not his job to flush the toilet.. not his job to take out the trash. Not his job not his job ...
How they heck did he ever get out of school much less too school. Feel sorry for his mother. He must have been raised with such a sense of entitlement.
What a waste of a person - that can't be proactive and fight for the company he serves.
I'd fire this person and free them up for other opportunities...
obit...
I would agree with this analysis.
He is a puppet.
Sorry,
I am too busy to have more precisely recalculate the nature of the losses and the cumulative adjustments on an "except for" basis.
I would encourage you to calculate it yourself if you have a working knowledge of financial statements and understand cash provided from and used in operations and the adjustments thereto.
What you will find is that my estimates are not unreasonable. If you recalculate things and make adjustments as appropriate it is my belief that neither Fannie or Freddie required significant cash moreover than what could have been obtained in the markets, if any.
Warmest regards,
Obit,
in my original assessment... i allocated $30 Billion for INTEREST on the debt borrowed at the usurious 10% interest rate.
Be mindful, that cash is a fungible.
fun·gi·ble
'f?nj?b?l/
adjective
Law
adjective: fungible
(of goods contracted for without an individual specimen being specified) able to replace or be replaced by another identical item; mutually interchangeable.
Therefore, its a net net approach.
Don't get covered up in the weeds.
As to your...
So, in the first quarter ending on March 31, 2010, DeMarco found that both Fannie and Freddie had net worth deficits of $-8.4 billion and $-10.5 billion respectively and requested US Treasury draws for $8.4 and $10.6 billion. These amounts were paid on June 30, 2010 to the GSEs.
Lets be mindful the this theoretical "net worth" deficit is an amalgamation of debits and credits (pluses and minuses) many of which are accounting (accruals) as opposed to cash basis.... (you do know the difference?)
Had the treasury (government) not orchestrated the books to show "deficit" there would have been no need for "additional debt".
This is a circular speak for having a boat that is half sunk with water... and "pumping the river" instead of lifting the transom out of the water and then pumping the boat. Pumping the river is a never win situation. With treasury and its efforts to distort the truth and bend it to its way of thinking excess draws (debt) was extended only to serve the purpose of showing a dire situation when in reality it was never so ominous that sound management directed at different goals would have succeeded. To this we are here today, not because of the efforts of "management" but because they ran out of "losses" to record and got caught. It was a inspite of FHFA and Treasury that these entities are undeniable sucesses and weathered the political storm set upon them.
It is my belief that the situation was never as bad as it was alleged to have been and that much of the decision making to set excess reserves was politically motivated. That was motivated by those wanting to kill fannie and freddie and take the business for themselves or their favored few. The financial crisis was true, and the effects were made worse by the grandstanding.
Much of the injury was self induced to create attention (much like a child would throw a tantrum.
Peace.
Your comment...
jeddiemack, what appears to be missing are the billions in circular US Treasury draws used solely to pay dividends due to the US Treasury and those added to maintain a positive net worth at the end of a quarter to avoid receivership.
It would be nice to know briefly how you traced the use of Treasury draws taken at the end of a quarter in the amount equal to the reported GAAP negative net worth (no draw was taken if there was a positive net worth) to arrive at the differential distributions placed into the categories presented in the previous posts for Fannie and Freddie.
I included an estimated $30Billion of interest on the circular debt being put on these two as a result of the excess reserves and unnecessary shenanigans. (Yes Debt!)
These are cumulative figures... as most might have guessed had the government not imposed the write down of DTA's (for no reason other than stuffing them with cash to buy bad loans) and over reserving against losses and the mark to market BS of investments held to maturity. They'd really may not have needed any cash. Likely they would have weathered the storm without the extra "stuffing" but that would have let a good catastrophe go un Used.
But stuffing them with cash was all part of the plan to save Banking and blame it on Fannie and Freddie. The unsophisticated public heard the headlines put out by media types and went on down the yellow brick road.
If you think I am materially off... do your own math... I don't believe I am. The link you posted just shows what they did... but not WHY they did it.
LOL...
Here is a quote.... from my post....
Keep in mind ... my numbers above aren't 100% accurate... so picky people need to leave them alone. I could be off 10% either way.
...