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CASE CLOSED. In #Fanniegate it's been unveiled:
-The crimes:
SPSPA covenant 5.3: They agreed to violate the Law & don't recapitalize FnF (Conservator's Power: "put FnF in a sound and solvent condition")
Coverup of the Restriction On Capital Distributions
-Crime weapon: the dividend to UST.
-Alibi: The Secret Plan that will be announced once they are caught.
-Motive: fund the White House and benefit the h-funds and Community Banks that currently hold JPSs and/or in future stock offerings at PER 5 times.
-Accomplices: all the plaintiffs, attorneys, judges and the internet message board users that repeat the flawed narrative of the Govt heist: Pagliara, Rosner, T.Howard, etc. We know them all.
This will force the UST to return $157 billion to FnF and SPS canceled (redeemed on 2013 and 2014 under the exception to the restriction on capital distributions)
Adding up that FnF's CECL accounting standard was a figure of just $0.2 billion and $1.1 billion, respectively, they have Capital Surplus.
THE STOCK MARKETS RISE ON STIMULUS HOPES. The world's eyes shift towards Fannie Mae and Freddie Mac as the Government's tools to announce a $3 Trillion QE stimulus program by releasing them from Conservatorship and announcement of a buyback of all the second-lien mortgages granted by the banks during Conservatorship using FnF's collateral (business stolen), either in cash-out refinancings or at origination for the down payment.
The charter allows FnF to grant equity loans and also buy mortgages 100% LTV. This will free up Capital in the banks that will start lending out massively to the private sector. It will occur at the same time a new wave of refinancings approaches thanks to the market rates collapse. Only the Common Stocks reflect the value of the enterprises. The JPS are simple obligations, like a bond. Get ready!
The ***RUMOR*** of March 6th contemplated that the Justices' Conference is held on March 4th, one day after the Oral Arguments. It turns out that the Conference was held on March 6th and thus, Monday was the first working day. So, let's give Justice Kavanaugh more time than a few hours to write the majority opinion, shall we?
Unblocked during a trial period.
ACCOUNTING FRAUD EXPOSED. Our Windfall ticket. This is how the shareholders negotiate.
ACCOUNTING FRAUD 3Q & 4Q2019: CORRUPTION AT #TrumpAdministration
— Conservatives against Trump (@CarlosVignote) March 9, 2020
SPS handed out to UST for free,reduce the Net Income. It can't appear on the Income Statement as it isn't an expense for the shareholder(non-cash),like occurred on 3Q2008/4Q2017.We want names.#Fanniegate @WhiteHouse https://t.co/rqR5ONyrdR pic.twitter.com/bf5uCo5Wqv
Neither intelligent nor knowledgeable. Read this thread, where I accuse HoldenWalker99 of spreading fears and misleading the shareholders.
I bet that gselinks.com isn't updated by YanksGhost to make us read his Twitter feed. He talks on behalf of "a team", he said here. What team? A team that you also belong to.
Mulvaney's abrupt departure, when it's obvious that there's a table of negotiation with Fairholme's attorney, David Thompson, and the controversial hedge-fund manager, Tim Pagliara, is a good sign.
Notice that Mulvaney introduced a bill in 2016 that called for the Govt to exercise its Warrant and the recent WH's Budget proposal unveiled on February 10th has the signature of Mulvaney and it contemplates that FnF will continue to pay dividends to the Treasury the next 10 years, and a TCCA fee hike for new loan acquisitions through 2025, with the amount remitted to the UST during the lifetime of the loan. Today, this obligation to remit TCCA fees to UST ends on October 1st, 2021.
So, clearly Mulvaney was a negotiator and we wanted to exercise the Warrant today in a negotiation with the hedge-funds. A devastated man knowing that he wrecked the U.S. economy under more than $1 Trillion annual budget deficits.
kthomp19 makes a tortuous interpretation of the law and cover-up of facts.
HERA restricts the Capital Distributions for undercapitalized enterprises "in general", so the scheme of a Conservatorship doesn't invalidate this provision and also the FHFA's suspension of the capital classifications, primarily because it's a law that a regulator can't halt. FnF are undercapitalized just watching their negative core capital and the conservatorship was authorized in a provision for Critically Undercapitalized enterprises.
Thus, dividends are restricted. HERA allows capital distributions to repay the obligations with regard to stocks or ownership interest, that is, the obligations SPS. So, FnF have been paying off the SPS with each dividend payment to the UST and later, for their recapitalization, under an exception added by the FHFA in July 2011.
Also, kthomp19 doesn't get that the Conservator's Incidental Power to act in the best interest of the Agency, refers to the Agency as conservator of private corporations and, secondly, that sentence begins with "authorized by this section", which means that whatever action must comply with the rest of the section, which is the Conservator's Power to "put FnF in a sound and solvent condition", that means RECAPITALIZATION for people with knowledge in Finance, as Capital is the only measure of the soundness of a financial company.
Also kthomp19 misses that a conservator is a fiduciary, which is corroborated in HERA's succession provision.
As a fiduciary, the FHFA can't enrich the Govt using the shareholders' money or approve the Warrant.
A final cover-up of facts. Washington Federal does challenge the 10% dividend along with the Warrant and the initial $1 billion worth of SPS issued for free. It's explained very clear and it calls the 2008 Agreements "usurious".
The negative effect of the warrant (beneficial ownership under SEC regulation) is suffered by today's shareholders, so the judge must extend the Class Period through today.
The 5th amendment to the PA was meant to pave the way for the judges to state that the FHFA is preparing the termination of the Conservatorship, which is a key factor to evade a Takings claim for the Warrant and the NWS, since it requires to be "permanent". They don't know that a temporary takings can be deemed permanent if the Government's actions have been done through legislation after the declaration of emergency (like in a case of temporary flooding prompted by the Govt), which is what is required for the UST to use its temporary authority to purchase FnF's obligations in HERA.
The indefinite conservatorship can be used to claim "permanent".
You should have known that their weighted average Current LTV ratio stands at 57% and the collateral covers the loans. That's why they have pointed out that the impact of the CECL standard will be very tiny.
The bailout is never a concern because is something embedded in the Charter, so it's not a stigma.
You don't realize that FnF are owed $156 billion ($110 billion in SPS overpayments, MHA program, corporate tax on the settlements, TCCA fees, etc)
I follow the Court news to attack the plaintiffs, defendants and judges. My bet is that Fanniegate will be solved unilaterally by the Govt and according to law, not in a negotiation with the plaintiffs that want to get what they aren't entitled to and cover up key provisions in the law.
My twitter account is @carlosvignote.
You took the estimation of CECL from KB&W, known only in their town, and later you repeated the number talking about a bailout of the enterprises once FnF adopt the new accounting standard. That doesn't exempt you from accountability for your big mistake, as you assumed that number as correct.
It's false that FnF have ever talked about the impact of the CECL standard in their 10Q reports, prior to unveiling it in the latest earnings report. If any, I only see FMCC saying "it will increase (perhaps substantially) the provision for credit losses". So, nothing concrete. So, you are misleading when you say that it was "as expected" the tiny provision highlighted by FnF. You have been caught in an attempt to spread fears among the shareholders.
If you say that the common stock is "a lottery ticket", it only shows that you lack understanding of FnF's conservatorships. The obligations SPS outstanding is not the final picture once the Govt unveils the ultimate resolution. The same occurred with the FHFA and the FHLBanks when it suddenly announced in 2011 that the obligation with the Treasury had been fully satisfied (both interest payments and the principal of the REFCorp's 1989 bailout)
Also it's corroborated in HERA's Restriction On Capital Distributions for undercapitalized enterprises.
My recommendation to you and your "team" is to read the law before investing in FnF because they are statutory corporations. The law isn't the contract SPSPA signed by two rogue Agencies.
My name is written in my Twitter account where I post daily analysis, because I have nothing to hide. For that reason, everybody knows me here without posting my name.
Are you the HoldenWalker99 of Twitter? The guy that spent the last year warning about another bailout of the enterprises due to CECL accounting standard that went into effect on January 1st, and now he claims that the tiny impact commented by FnF in their latest earnings report was "as expected"?
Now you call the common stocks "a lottery ticket". In companies earning $14 billion.
In the end, the law will prevail, the law that says that Capital Distributions are restricted for undercapitalized enterprises.
Why don't you post with your real name?
The Conservator can slash the dividend on the JPS to 4%, for instance, thanks to its Incidental Power and HERA's succession provision.
A refinancing is what would have been done in the absence of Conservatorship, but the BOD would have done it in a different way. First redeeming the JPS at par-value, and later issuing new JPS at a lower coupon. Now it can't be done because who is going to buy again a JPS issued by FnF. They will carry a stigma due to the Government's actions that will be difficult to erase.
Some JPS pay an 8.25% dividend. More detail in #Fanniegate.
They don't explain their methodology but if someone comes up with expected losses in the future is because it has contemplated a worse case scenario. The figure of Current Loan-To-Value ratio is the key factor. The collateral covers the loan 175%.
Current Expected Credit Losses in their portfolios. The new accounting standard that took effect on January 1st, substituting the Incurred Loss accounting (individually impaired loans).
They expect to lose very little because the collateral covers the loans. Weighted Average LTV 57%.
FnF announced CECL accounting standard of $0.2 billion and $1.1 billion, respectively, as of end of December. With the slump in the Treasury Yields year-to-date, they will drop their expectations to $0 in their next earnings report.
It means that their Capital needs are $0. This is why Calabria conceals his proposed Risk-Based Capital requirement.
The JPS are obligations and don't reflect the enterprise value of companies that earn $20 billion together.
Who is the illiterate in Finance that still holds even 1 JPS?
PUT YOU HAND UP IN THE AIR!
BEHOLD! The 4 commandments with regard to FnF have been found:
I. The Conservator is a fiduciary for the shareholders and JPS holders.
II. The Charter's purposes are about Public Policy according to a 1991 GAO report. Then, there's an inherent UST backstop in the same Charter, which is the authorization of UST to buy low-rate REDEEMABLE OBLIGATIONS.
III. A Warrant is deemed Beneficial Ownership. Then, a Takings claim arises.
IV. The Secret Plan: Capital Distributions only for the repayment of the obligations with the Treasury (SPS) and Recapitalization.
Read #Fanniegate means the hashtag,not the guy called #Fanniegate, who works for John Paulson to mislead the retail investor.
There are 2 Class Actions, WAZZEE and WASHINGTON FEDERAL. The first one challenges the NWS and the latter the Warrant. Judge Sweeney works for the hedge funds and she hasn't registered the actions as Class Action yet, so that it allows the hedge-funds to bargain with the Govt and agree to rip-off the common shareholders.
The Mob.
The best in-depth analysis FIRST ON #FANNIEGATE.
Could someone post the STATUS REPORT filed on Friday by WAZEE STREET and the Govt in judge Sweeney's court?
This is a Class Action that challenges the NWS. I wonder whether judge Sweeney knows what Class Action means. Washington Federal filed another class action in 2013.
Case 1:18-cv-01124
Thanks.
Fake news.There aren't negotiations with an unconstitutional agency.
JUDGE SWEENEY's COURT IS ON FIRE. Tremendous revolt by the plaintiffs of the 11 Related Actions that showed outrage in their Status Report about how the judge is handling the proceedings. Washington Federal is the one more upset as it complains that its case is 7 years pending when it's different to the others and blasts the DOJ's call for an indefinite stay. Also it's stunned after the judge recommended that only Fairholme should file an interlocutory appeal, and the other cases file an Amicus brief. The Appeals court doesn't give opinions about what is outlined in the Amicus briefs, says plaintiff Fisher. WaFd also disagrees with the judge: "The Appeals Court should be the one to make that call. Fairholme is not a test case". The judge, yesterday, scheduled a Status Conference for March 5th in an attempt to placate this revolt.
This case is a sham. The plaintiffs agreed to cover up HERA's Restriction on Capital Distributions for undercapitalized enterprises, the FHFA was declared unconstitutional and now this revolt. It should speed up an unilateral resolution by the White House with the announcement of The Secret Plan (dividend applied to repay the SPS and recapitalization, pursuant to HERA and the CFR1237.12) that would declare all the lawsuits meritless.
The analyst Dick_Bove is a career con man. This is why he works for a small firm. Sell rating on FnF, stocks trading at a PER of 0.3 times.
Last week, he attempted to justify the accounting fraud of FnF seen every quarter, when the current SPS handed out for free, which can be considered like a stock dividend to the Treasury, reduces the Net Income, but it can't appear on the Income Statement because it's not a cash payment and thus, it isn't an expense for the shareholders, saying that it's like a loan and the dividend will be paid in cash in the future.
THE WINDFALL IS IMMINENT. In #Fanniegate it's exposed the connivance between Washington Federal Plaintiffs and Fairholme, since WaFd points out in its status report filed yesterday what the Fairholme's attorney, David Thompson, already pointed out about WaFd's lawsuit in the recent Investors Unite Conference Call, contending that it's only different to Fairholme's in the theme that it challenges the imposition of the Conservatorship, which is a wrong allegation because it claims that the clause (G) is about past losses, when it's about the likelihood of future losses. So, WaFd misrepresented the law and the conservatorship can be justified with this clause (G).
Therefore, both omit that WaFd also challenges the Warrant, the initial $1 billion worth of SPS issued for free, the usurious 10% dividend and the use of FnF for Public Policy. All of it as part of dramatic appeal to the Constitution about a Takings claims and how the Govt actions prompted economic harm. It's worth noting that it's also omitted that WaFd filed a Class Action. This evident collusion among the plaintiffs to drop the most important allegations for the common shareholders, while WaFd clings to a flawed allegation, under the orders of a hedge-fund manager with a reputation of a career con man, is an evidence that all the lawsuits are staged with the participation of crooked judges. This has been spotted and it will advance the resolution of Fanniegate and fast reimbursement of what FnF are owed, plus damages to the Equity holders.
Incorrect.The conservator is a fiduciary. Judge Willett explained it in the ruling about Collins case in the hearing en-banc.
He added that it's a trustee, protector, guardian, preserver. That's the traditional view of a conservator.
It refers to both the enterprises and the Equity holders, as both transferred their powers, rights, etc to the Conservator to use them wisely on their behalf until they are returned.
The conservator is a fiduciary, as it was explained several times by judge Willett in the ruling about Collins case in the hearing en-banc.
He added that it's a trustee, protector, guardian, preserver. That's the traditional view of a conservator.
Now the Mob wants to rewrite concepts.
If you need an additional explanation, say it.
John_Carney nailed it when he spotted Sweeney's flaw in her December 6th opinion.
He is the greatest FnF hater after plaintiff Joshua Angel at the Yahoo Board but, this time, he nailed it and he was forced to delete his tweet. More info on #Fanniegate.
***CONSPIRACY JUDGE SWEENEY- DOJ (MNUCHIN)-BERKOWITZ*** This is huge! Analysis posted on #Fanniegate. Judge Sweeney left a poison pill in her December 6th Opinion so that the DOJ can file an interlocutory appeal to the Federal Circuit, win and the entire opinion has to be re-written more than one year later. More delay means more stock price manipulation. The famous FnF hater, Carney, spotted this flaw in the judge's Opinion at the time too. Judge Sweeney said that the FHFA-Conservator is the United States, it didn't step into FnF's shoes and, more of the same, it didn't shed its Govt character. The DOJ has appealed this theme in the question number 2 submitted on Friday. Judge Willett in the 5th Circuit Court hearing en-banc already said that it's a big lie, stressing several times that the FHFA-Conservator is a fiduciary, it can't pursue its own interests as a Federal Agency, but uphold its Powers as Conservator of private corporations. This is high level corruption and the Attorney General, Barr, must step in and initiate a staff cleansing both at the DOJ, the Court of Federal Claims, the U.S. Treasury and the head of the gang, Donald "TV showman" Trump. It's not a coincidence that Mnuchin and Berkowitz are scheduled to attend a Pre-Trial Conference on Monday as co-defendants in the Mega Case of looting of the retailer Sears.
The docket says March6th response,but the judge said March4th.
Can someone post the DOJ's filing yesterday of an interlocutory appeal with regard to Fairholme case in judge Sweeney's court? If confirmed, the DOJ can be accused of REBELLION.
SCANDAL:U.S. Treasury Secretary,Mnuchin, proposes a Govt Explicit Gtee.
What lies behind his "limited and tailored Government support".
It's more shocking that no one complains about it.
The U.S. is more communist than China. What a shame!
SCOTUS won't vacate anything.We are happy with the 10% and NWS dividend, as long as it's announced The Secret Plan, according to law, otherwise dividends are restricted while in Conservatorship.
Pathetic to see that people claim that Scotus will vacate the NWS dividend, but not the 10% dividend. It doesn't make sense.
The best analysis first on #Fanniegate.
Tremendous analysis posted on #Fanniegate in several tweets during the 3-day weekend. The bottom line is that the legislators left a cheap UST backstop on FNMA when it was fully privatized after the repurchase of the Govt's Preferred Stocks in 1968. It's related to an Authority of Treasury to purchase REDEEMABLE OBLIGATIONS, which has the same effect on Equity as the Preferred Stocks. Actually, they are Preferred Stocks with other name.
It means that the low yield backstop must be respected, and the high yield contemplated in HERA was meant to carry out The Secret Plan, that is, a plan of fast repayment of the SPS and fast recapitalization, at a 10% dividend and NWS dividend (top speed) gear. These are the only two reasons that HERA and the CFR 1237.12 allow FnF to pay dividends while in Conservatorship, otherwise dividends are restricted.
Note that FnF would have carried out the same FAST TRACK plan without the need of laws and regulations, because it's the obvious and only business judgement.
With this plan, all the lawsuits are meritless but WaFd's about a Takings claim with the Warrant and that FnF engaged in state-action.
Say with me: THE DIVIDEND WAS IMPECCABLY SUSPENDED.
JPS are the losers, better said, Junior Redeemable Obligations.
More evidence of The Secret Plan.
Before HERA was enacted, there was already an authorizaton of Treasury to purchase OBLIGATIONS, and these must be REDEEMABLE at the option of FnF, which is a replica of the obligations JPS. Also these obligations must have a rate established by the Secretary of Treasury, taking into consideration the Treasury yields at the time, which is the same dividend determined for the Preferred Stocks that the UST bought prior 1968. It can't be regular obligations becasue FnF's trade at a premium yield over Treasuries.
If it walks like a duck, quacks like a duck,.... this authorization of the U.S. Treasury to purchase obligations is, in truth, an authorization to purchase Preferred Stocks, that is, a cheap UST bailout, so the UST could have bought obligations SPS without the need of HERA's unlimited yield obligations. The low yield is for the UST payable after Conservatorship (cumulative dividend) because Capital Distributions are restricted today, and the high yield is for The Secret Plan, the exceptions to the restriction mentioned before, are "dividend to reduce the obligations (SPS)" set forth in HERA and in 2011 CFR 1237.12, the FHFA approved "dividend for their recapitalization".
More info on #Fanniegate.
On January1st the new accounting standard CECL took offect. CECL stands for Current Expected Credit Losses. The name says it all. FnF use models of expected credit losses in their portfolios and they are discounted today. Freddie Mac says that it expects $0.2 billion and Fannie Mae, $1.1 billion credit losses in the future, discounted today. Literally, they said that the CECL standard will translate into a reduction in the Retained Earnings in the amounts that I mentioned, so they didn't say that they are their expected credit losses, although it can't be other theme.
This is because their weighted average mark-to-market LTV ratio stands at 57%, therefore the properties cover their credit risks. That's why their expected losses are so low.
The previous accounting standard approved in mid 2008 of incurred losses was so damaging that it was the cause of the conservatorship, as it's devastating for modified loans since FnF had to set aside a provision equal to the concession granted to borrowers, and it prompted massive losses 2008-2012. I expect part of this "fake loss" reserve ($13 billion combined) to be partially released in 1Q2020 results due to this new CECL standard, although this is another theme.
***RUMOR***JUSTICE KAVANAUGH HAS ALREADY WRITTEN THE MAJORITY OPINION FOR THE DISSOLUTION OF THE FHFA AND THE CFPB, TO BE RELEASED ON MARCH 6th. The CFPB case will hold Oral Arguments on March 3rd, Tuesday. The next day in the afternoon, there is the Justices' Conference where they vote and come up with a decision and direct a Justice to write the majority opinion. If the decision is unanimous, it could be unveiled very fast. So fast that Kavanaugh has already written it and he has included the FHFA case also at Scotus, which is a replica of CFPB case. Obviously the Govt is aware of this and readies a final resolution of Fanniegate, reimbursement of funds to FnF and payment of damages to the Equity holders. FnF common stocks are worth $240ps (adjusted PER 13 times). The JPS will fetch their par-value.
The damages for the common stocks include a takings claim for the Warrant, it could be in the neighborhood of $10ps. FNMA 80% of that amount taking into account that it dragged FMCC into conservatorship (only 53% capital surplus over the Risk-Based Capital on June 2008 and it paid dividends on August 2008 vs 113% capital surplus in FMCC) and also FMCC shareholders have a case of preemptive rights in 2008 with the issuance of the warrant (the conservator should have triggered them) and also that the BOD of FMCC opted out of the Control Share Acquisition statute (anti-takeover measure) in the bylaws without shareholder approval, one day before conservatorshp (both cases arise under Virginia Code). The JPS, 20% of that amount (they have traded closer to their fair value all along and they don't have a Takings claim with the warrant)
I'm surprised that no one here(but me)mentioned the CECL accounting standard in effect as of January 1st, whose impact we were expecting many years ago.
It was unveiled yesterday and it was mind-blowing.
RECTIFICATION: I'm NOT surprised that no one here........
FnF explain the impact of the accounting CECL standard or lifetime credit losses accounting. Freddie Mac says that it expects $0.2 billion and Fannie Mae, $1.1 billion credit losses in the future, discounted today. This is peanuts. The Capital ratios will be tiny.