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Don't you see that it's the same? The FHLBanks contributed 20% of their profits for the repayment of the REFCORP bonds. The FHFA announced in 2011 that with the interest on the bonds, the FHLBanks had satisfied the debt with REFCORP (the rescue fund established by Congress). Since then, 20% of their profits applied towards a Retained Earnings account for their recapitalization.
With FnF, it's 10% of the SPS and, as of 2012, 100% of their profits (NWS).
Now, the FHFA will announce that the obligation with the Treasury was satisfied and that they also built a Retained Earnings account ($110 billion)
There's no reason to think that both will be treated differently by the same regulator.
WINNING!
There's no Capital buffer! You didn't understand my explanation contending that with the 5th amendment to the PA, FnF are NOT building up Capital since retained earnings is offset by Additional Paid-In Capital or, if it's $0, by REDUCTION OF RETAINED EARNINGS, due to the SPS handed out for free.
This move is pending, since we don't see it because FnF aren't recording the real SPS liquidation preference in the balance-sheet.
So, there's no "interim step". The NWS continues.
The evidence of the existence of a secret account is that it's the same scheme that the FHFA utilized for the FHLBanks and their rescue fund REFCORP. Suddently, the FHFA announced that with the interest payments, the debt was satisfied and later they were directed to retain earnings.
The AUTHORITY OF TREASURY TO PURCHASE (REDEEMABLE) OBLIGATIONS, SUCH AS SENIOR PREFERRED STOCKS, IS THE UST BACKSTOP, at a yield similar to Treasuries.
Since it's written in the Charter since its inception, it means that it's an explicit UST backstop, because we can see it with our own eyes and there's no second guessing.
HERA incorporated into the Charter a second UST backstop, with unlimited yield in the obligations, entitled......guess what...you got it: AUTHORITY OF TREASURY TO PURCHASE OBLIGATIONS.
There's two UST backstops in the Charter.
You can't call a UST backstop the second and skip the original.
The original low-cost UST backstop was the reason of their low-cost borrowing. Neither it was due to a "perception" as Calabria said, nor it's due to the second UST backstop, as Zandi pointed out, implying that it's embedded in the SPSPA and not in the Charter, which is a second mistake.
ALWAYS STICK TO THE ORIGINAL AND AVOID COUNTERFEITS MADE BY THE MAFIA.
***CALABRIA DIDN'T STOP THE NWS***
FnF are retaining earnings but, since they also hand out SPS for free to the Treasury equal to the Net Worth increase like before, it has to be recorded as an offset in the balace-sheet a reduction in the Additional Paid-In Capital account (money ponied up by the shareholders above the par-value) or, which is the current case, in the case it's already $0, a reduction in the Retained Earnings account. So, net effect, $0 capital built.
What happens is what I have denounced in a complaint with the SEC last week. FnF aren't recording in the balance sheet the SPS increase in the liquidation preference. For instance, FMCC posts $72,648 million when the real liquidation preference stands at $82,152 million. This way, the reluctance to post the offset mentioned, makes FnF post a charge on the Income Statement for the same amount, so that the EPS is $0.
This is a Financial Statement Fraud. Up to 20 years in prison.
The path to the release from conservatorship is set forth in the law: put fnf in a sound and solvent condition.
CALABRIA, DECLARED A MOBSTER COMPULSIVE LIAR ON #FANNIEGATE
He repeats the Mob's mantra:
- FnF need a Refinance fee to cover losses since they didn't build a Retained Earnings acct after the repayment of the SPS, like the FHLBs did with their rescue fund REFCORP.
- He covers-up his Power as conservator. He's never mentioned it. "Put FnF in a sound and solvent condition", because he knows that soundness means Recapitalization and solvency is related to reducing their obligations with the Treasury (SPS). Corroborated in the section Restriction On Capital Distributions (Recap) and its exception (reduce the SPS)
- He claimed in the 2009 FHFA's report to Congress that the low-cost borrowing was due to the "perception" of a UST cheap backstop, which was also recently stated by another liar, Moody's Zandi, in his comment submitted in the FHFA's Capital rule.
There's no perception, but an explicit UST cheap backstop in the Charter since its inception. Section: AUTHORITY OF TREASURY TO PURCHASE (REDEEMABLE) OBLIGATIONS, at a rate similar to Treasuries.
You have to pay me to repeat the Secret Plan. I've explained it to you a thousand times.
$240ps is the target price for FMCC.
****THE ANNOUNCEMENT IS IMMINENT****
Yes, the Secret Plan is ON.
The holders of JPS are having a hard time reading it.
Their dividend is used to recapitalize FnF and that's the shareholders' money.
ALL THE LAWSUITS ARE WORTHLESS. All the plaintiffs will be charged with Making False Statements for the cover-up of key provisions and Abuse of Court Process.
The announcement of The Secret Plan has nothing to do with the lawsuits. It can be announced jointly with the repeal of HERA by Congress, or not.
I've said that with HERA (The Secret Plan) or the previous legislation (openly), all roads lead to the recapitalization of FnF through retained earnings thanks to the Restriction on Capital Distributions, that is, dividend suspended.
If HERA is repealed, is more of the same: The Secret Plan, but not secret. What HERA struck in the FHEFSSA is: Authority of the Conservator:
-Restriction On Capital Distributions
-Capital Restoration Plan.
Also, the yield on the SPS was limited to a low yield, not like HERA that allows unlimited yield for The Secret Plan, as the low yield obligations SPS is a section that wasn't struck in the Charter.
Today with HERA we have the same, but only the smart investors see it: the Conservator's power (recap), Restriction On Capital Distributions is hidden in the Capital Classifications section.
All roads lead to The Secret Plan. The other roads are to watch movies of gangs, thieves, cheaters, thugs,...
***SCOOP*** WEIRD-LOOKING INVESTOR, BILL ACKMAN, SLAMMED ON #FANNIEGATE.
Teenage-face with white hair? I can recommend him a good hair dye. Basically, anyone.
He claims to own 10% of FnF but the truth is that Pershing is a mere custodian of others' position, like CalPERS's and the Community Banks'. CalPERS was caught building up a stake in 2010 and it sold off all after it was published in my blog. The truth is that it just transferred its stake to Pershing, because no one sells a stake at a loss when it's beginning to build it and massive historic losses in the security.
Ackman agrees with the 10% dividend, the warrant, stock offerings, a new commitment fee, the TCCA fees, a settlement of the fraudulent lawsuits of the JPS holders, he talks about "restructuring" of FnF that we know it means swap JPS for common stocks and, he highlights the figure of historic shareholders, when in a publicly-traded company, there's no such term because any claim travels with the shares.
Basically, it's the Moelis/ACG Analytics Plan. Dilution of 99% to the existing shareholders.
He is a traitor to the common shareholders, because he is not a shareholder.
I can't believe you brought FANIP case again.
8.75% Non-Cumulative Mandatory Convertible Preferred Stock, Series 2008-1, stated value $50 per share.
Fannie Mae informs to the SEC that it seeks the termination of registration, because FANIP had mandatory conversion into commons in 2011.
They forgot to do it at the time.
A conservatorship is not bankruptcy. If Calabria said so, it's because he is paid by the MAFIA to say so, in order to proceed with a restructuring plan, where the JPS are swapped for common stocks, in exchange for the Govt keeping the 10% dividend, the Warrant and a new commitment fee. The so called "settlement" mentioned by the plaintiffs and the company, headed by David Thompson, the attorney for Fairholme, Collins and Bhatti, who dares to say that "the Government has to come to me". His meetings are at a table in an Italian restaurant in Washington DC.
A conservatorship is about a statute- or judge-appointed conservator in charge of rehabilitating the enterprises, in substitution of the management and BOD. Rehabilitating means recapitalization, reduce debt (obligations SPS in FnF case) and fix their operations, which were fixed in 2011.
Five complaints, not four.
An EMERGENCY MEETING announced just hours after my complaint about Financial Statement Fraud. This is Securities Fraud, up to 20 years in prison. Today, I have filed another one related to FNMA and its 1Q2020 earnings report.
I'm not aware of any complaint filed with the SEC. Because there's none. Only my 4 complaints.
***SCOOP*** NEW COMPLAINT FILED WITH THE SEC.
In brief. FNMA posted a charge on the Income Statement in the 1Q2020 earnings report, in the line item related to the dividend to the SPS holder, but the amount of SPS handed out to the UST is equal to the Net Worth increase and FNMA posted a reduction of the NW in the quarter and, thus, no SPS liquidation preference was required to be increased.
This charge made FNMA post $0 EPS.
If you had a dollar for every complaint filed with the SEC, regarding FnF, you would have four dollars, because they are my four complaints filed.
The information about an emergency meeting doesn't need to be published with the headline "EMERGENCY" ; "WARNING" ; "UST ALERT, UST ALERT, UST ALERT"
Early in the morning, a complaint was filed with the SEC, accusing the management and the conservator of Financial Statement Fraud. A complaint with the SEC is not a complaint filed with your nearest groccery store. I'm talking about felonies that carry prison sentence.
At 8:00AM ET, it was published on Twitter.
In the afternoon we learned about a meeting of FHFA and the Treasury.
That's called "emergency meeting".
***BOMBSHELL*** EMERGENCY MEETING YESTERDAY BETWEEN THE UST AND THE CONSERVATOR AFTER THE 4TH COMPLAINT WITH THE SEC FILED BY A SHAREHOLDER
https://www.treasury.gov/press-center/daily-guidance/Pages/08172020.aspx
ROCKET COMPANIES: NEW EPISODE OF AMERICAN GREED
A fraudulent organizational structure:
-The CEO and his company RHI don't care about RKT, only about RKT Holdings LLC that holds all the businesses and where can't be diluted.
-Usage of RKT as stock printing press for Stock Compensation, buyouts, etc.
The company consolidates 100% of RKT Holdings even though it has only a 5% stake, since it has a control agreement and later, it allocates 95% of the Net Income to the non-controlling interest, called Minority Interest, which defies common sense calling Minority Interest to those that control 95% of the company.
This sham with RKT's attempt to impersonate RKT Holdings LLC, is confirmed when RKT reports ADJUSTED data (non-GAAP standard), stripping out the fair-value loss in MSRs and Stock Compensation expenses, to report 70%+ ebitda margin.
Stock printing press. The CEO shielded from dilution. Adjusted data.
SMART. Until you are caught. BUSTED!
***BREAKING NEWS*** New complaint filed with the S.E.C..
FINANCIAL STATEMENT FRAUD
An amount of SPS Liquidation Preference and its offset that, as Additional Paid-In Capital can't be negative, is reduction of Retained Earnings, are missing in the balance sheet. They post a charge on the Income Statement instead, called "future increase in senior preferred stock liquidation preference." This is a deliberate misrepresentation of the financial condition. More detail on #Fanniegate.
Who are @MattWildy and @pokernermal over on Twitter that get so many "likes" in their posts that are absolutely garbage?
What is more worrisome is that many of those that post a "like" are following me. I will begin blocking them if I see that they post more stupid "likes".
The same occurs with @tommy1rx, although at least he posts something using technical words that have some substance.
I always think that those that get a lot of "likes" is a conspirator working for the hedge-funds.
Glen Bradford is the master, who just posts videos of himself on Twitter or tweets without substance, nothing about finance, the law, etc just repeat the hedge-funds' narrative of spspa, Treasury plan and the view of Morgan Stanley's Craig Phillips, the mastermind of the CRT scam.
*** RKT TARGET PRICE = $0.2 ***
The fact is that this company only holds a 5% stake (Interest Units called Holding Units) in RKT Holdings LLC, the holding company that owns all the businesses. RKT says in the SEC filing that it will consolidate 100% of RKT Holdings LLC, but later 95% will be allocated to the non-controlling interest to reflect the entitlement of the CEO and his company RHI to the portion of RKT Holdings LLC. So, RKT owns just 5% of the Net Income published, but it has 2 billion common stocks. Doing a simple math and a PER of 13 times, the outcome is a target price of $0.2ps. Notice that it published an ADJUSTED net income because the fraudster CEO strips out the main charges, like the fair-value loss in the MSRs and the Stock Compensation. A non-GAAP metric, like the Chinese companies.
***BREAKING NEWS.THE TREASURY HAS FINISHED REPLENISHING THE POT FOR THE REFUND TO FnF
It remains unchanged in July vs June at $164b (it was just 14 billion in the same period one year earlier, and it began to be built in April with $145b) and it can be seen in its monthly statement in the line item: General Government Appropriations account. The UST owes $159b ($110b in 0% SPS overpayments, $22b TCCA fees, Corporate Tax on settlements, MHA pgm and the interests on this escrow account)to FnF.
$22b in Moral Damages to the Equity holders, accordingly (The Justice Dept has its own pot)
MASSIVE FRAUD IN THE EARNINGS REPORT. It doesn't publish the fair-value change in the MSRs of the portfolio, only in new loan originations, in order to publish the ADJUSTED revenues, ADJUSTED ebitda and ADJUSTED Net Income.
Also it assumes that it owns 100% of the Holding company that holds all the businesses, when it has only 5%.
Lending Tree trades at a Forward PE ratio of 70 times, according to Yahoo.
RKT between 85 - 100 times.
Two days ago you utilized a Forward PER of 8 times.
Rocket Companies can be a good company but it's overvalued and, more importantly, it set up a complex net of companies, jointly with the underwriters, with the objective to mislead the retail investor in the IPO, about the actual total common shares outstanding.
The best analysis, first on #Fanniegate.
A Takings claim araises when the Govt takes private property for public use without a just compensation.
A warrant, under SEC rules, makes the Treasury become beneficial owner of 79.9% Common Stock in FnF at $0.00001ps.
That's a Takings claim by the shareholders that are diluted in the company. The SEC is telling you that we don't need to wait until the warrant is exercised to declare a Takings case.
The stocks discount that scenario and the price plummets.
The attempt to conceal the economic injury inflicted to the shareholders and the legal effect that a warrant has, is fruitless.
TD AMERITRADE THE FIRST ONE TO LIST 2 BILLION COMMON SHARES OUTSTANDING.
PER 107 times annualizing the 1Q results.
Devastating.
The fair-value of $2.4ps is your fair-value, not mine.
I have used your estimation of annual Net Income of $600mll ($150mll quarterly)
Also I have used your PE multiple of 8 times.
What I've done is change the total common shares outstanding for 2 billion, to reflect the serie A common stocks issuable upon conversion of the class D common stocks held by the CEO and his company RHI.
FACTS MATTER.
You have to use the Total Common Shares. The class D Common Stock is owned by the CEO and his company RHI, and they give the holder the right to purchase the class A or class B Common Stock.
RKT must report earnings on a diluted basis, which means 2 billion total shares outstanding.
***CET1 Capital includes the Retained Earnings account***, which is the deposit that FnF make every quarter in the Treasury Department under the guise of a dividend payment, since it's barred in HERA's Restriction On Capital Distributions.
It also includes AOCI, currently $1 billion in FMCC's balance-sheet. Only $133 million in the case of FNMA.
You are using only 100 million shares for your calculation.
That's the amount of shares in the IPO, but I've read that the CEO and other company own 95% of the shares outstanding, which brings the total common shares outstanding to 2 billion.
That's why the Market Capitalization today is $50.6 billion.
With your estimation of Net Income for the year, the EPS is $0.29. Using also your PE multiple of 8 times, the fair-value is $2.4 ps.
This compares with your $48 ps target price.
Big difference when you use the real numbers!!!!!!!!!
As per my prior assertion, I meant that the fair-value loss in the MSRs of $971 million, almost erodes the Net Income.
The Warrant is a Takings claim and the conservators do have a fiduciary duty with the shareholders. The duty of Loyalty, act in the best interests of FnF, that avoids self-dealing in Federal Agencies, which is what has happened. It's owed to the ownership interest.
A mortgage is cancelled upon refinancing. It no longer exists. The MSRs are worth $0 if there's no mortgage.
A new one is originated with a new MSR.
Facts matter.
The only reason why the loan originators sell MSRs is for the reason we've seen in the 1Q 2020 results: in order to avoid the risk of fair-value loss in a period of interest rates decline. RKT posted $911 million fair-value LOSS in the MSRs.
The MSRs is a stream of revenues and there's no other reason why they would give it up. Offloading MSRs is not "good" as you claim, is a desperate attempt to placate the carnage seen on the 1Q2020 Income Statement.
I've told you that the MSR is valued at $0 upon refinancing, when the first day it was recorded the entire revenues over the life of the loan.
The 1Q2020 results I posted that you call "partial screenshot". I've posted the entire Income Statement, so I don't know why you call it "partial".
Talk to me about finance and not that RKT is the Amazon of its sector, a digital company, "tech-based financial company", others are low-tech companies, etc
Primarily because RKT is using the software provided by FnF to sell the mortgages over to them.
What's next to justify a PER of 107 times? Do they have an App?
ROCKET COMPANIES $RKT, ANOTHER TURD IPOed BY $GS $MS
When interest rates drop, the fair value of the MSRs plummets. It's $0 upon refinancing since the loan disappears.
The carnage of MSRs fair value losses and high expenses due to loan workouts, will continue for the foreseeable future.
Holding companies trade at a 25% discount to fair value.
PER=107 times
No dividend, obviously, with the prospects mentioned.
The employees' bonuses are not linked to the Net Income.
There's always low internet traffic on Fridays. Good in-depth analysis daily.