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Hi bcde,
no. I am just flexible in my jargon.
kthomp19 deserves my respect for his GSE knowledge - just like you. Unfortunately it is Not possible for him to take off his JPS glasses.
GLTY
Hi kthomp19,
I'll be happy to answer your questions:
Hi folks,
Yesterday Calabria sent a letter to the 5th circuit.
Content: The FHFA thinks that its structure is not unconstitutional.
Message: Calabria wants to do the job for 5 years.
Importance to us shareholders: As Freddie's former CEO Layton already said, it would make sense to recapitalize 4-5 years by retaining profits. Only then should a capital raise take place to bring in the remaining billions needed. Anything else would be too risky.
That's just my speculation. But it clearly speaks for the commons. While the JPS have to wait 4-5 years until there are dividends again, the value of the commons increases with every dollar of profit.
Maybe there will be a conversion of the JPS into commons. But I think that JPS holders might need a victory in court for that. They would have 4-5 years to do it.
What does that mean for the En Banc ruling? Nothing at all! First, the letter is not in time. And secondly, the Treasury continues to deny the constitutionality of the structure of the FHFA. And both the FHFA and the Treasury have always claimed that the NWS is legal.
GLTA
You're right, Golfbum. 3 months ago it was the same. However, the table was updated on 03/24/2019 as I posted here.
I thought the last time only the TBD part was missing. But it looks like the table page is not updated regularly by the FHFA.
Hi Tutt1126,
the meaning of equity distribution depends on the context.
All changes in the Shareholder Equity section of the balance sheet are attributable to equity distributions.
This section also reflects the ownership structure. In the event of capital raises, new common or preferred shares are issued. That leads to changes in the equity distribution, too.
GLTY
Hi, Rick,
when you buy a space shuttle, you have the explicit guarantee that the device will lift off. And you have the implicit guarantee that there will be queues of women to fly with you.
Thanks, I've been on vacation. Glad not to have missed En Banc...
Hi robertus,
the FHFA has removed "TBD" from the glossary. This is not a coincidence, but a conscious action. En Banc has nothing to do with this.
GLTY
Hello friends,
have you noticed this yet? The dividend table of the FHFA has changed: The 2019 Q2 dividend is not listed. Also the complete TBD part is missing.
Amigos, it looks like there is no more NWS "to be determined". We'll know on Monday.
GLTA
What comes after 3?
2? But no. It's 5.
Basic Fannie math.
Hi Clutch29,
We were all once young...
Guts he has, no doubt. And friends he has, but are they the right ones? For money, yes, no doubt.
Hi stckpkr7000,
no, this is "Glen The Man":
Hey kthomp19,
Hi chessmaster,
you are absolutely right about everything you wrote on this. Even with the last sentence - outside conservatorship. However, I would not associate this with intelligence, but with being informed.
I don't want to get deep into the discussion about JPS vs. commons. Because I don't want to unsettle anyone unnecessarily. Not my game!
GLTY
There are only two classes of shares:
1. common shares
2. preferred shares
The value of the common stock is measured by its share in the company.
The value of the preferred stock is measured by its ROI, the dividend.
If there is a new class of common shares, the share in the company acquired for $1 is always the same.
For Fannie Mae, this would make no sense at all.
If new preferred shares were to be issued, this would be the best recap scenario of all for common shareholders, in addition to retaining company earnings. Because in this case the companies would know in advance how much capital they would raise and what the costs would be. 100 billion dollars would cost about 5 billion dollars in dividends per year - as of today. This would be a save way to recapitalize the twins.
I hope I was able to help you a little.
GLTY
Hey RuudG,
Hello, folks,
I'd like to tell you one thing:
The really stupidest argument that circulates here on the board is that the common stock would be damaged if the 2 warrants were cancelled.
How confused do you have to be to really believe that?! When does 1 share own more of a company?! With 1,158 billion shares outstanding or 5.8 billion?
Mnuchin then no longer protects our shares? So what?! Nevertheless, he still cannot give away our Fannie for free, or more than 79.9% of it! And that he would have to do, so that the common shareholders would be worse off without warrants.
GLTA
Thank you, masslanding.
Cryptonator and his fake news about En Banc rode me into deep rain yesterday...
Next two weeks Saint-Tropez. Maybe there...
I'm German. We don't sing.
Hi Glen,
you're writing that the preferred shareholders in the Lamberth case still have hope for damages. I thought the damages claims had all been rejected and only "implied covenant of good faith and fair dealing" was to be investigated.
Can you please provide a source that supports your statement regarding damages? Considering the fact that the JPS are non-cumulative and F+F were not adequately capitalized and therefore would not have distributed dividends, I can't imagine that. Thank you.
GLTY
Hi Guido2,
Don't worry, I won't start singing. I'd rather leave that to our #Fanniegate front singer @Letgoofmyfannie, who hopefully saw the linked London guys.
Hi kthomp19,
Have a great time!
I Can See Clearly Now The 3 Is Gone...
It's gonna be a bright sunshiny day...
Look straight ahead, there's nothing but blue skies
Hi "fabulous" RuudG,
minimum capital requirements F+F: 100 billion dollars
Risk-based capital requirements F+F: 160 billion dollars
Minimum capital requires core capital.
risk-based capital does not require core capital.
Freddie's outgoing CEO Layton wants to retain the profits for 4-5 years to recapitalize. An SPO is not safe enough for him. It has not yet been decided that there will be a stock offering at all.
WOW, thanks Obi for the link.
I thought the only "(3) GROUND(S) FOR DISCRETIONARY APPOINTMENT OF CONSER-VATOR OR RECEIVER" fulfilled in HERA was "(I) CONSENT.—The regulated entity, by resolution of its board of directors or its shareholders or members, con-sents to the appointment."
Now I read in the document you posted that the then CEO of Fannie Mae Mudd did not agree at all to the conservatorship.
"I do not recall the FHFA September 6, 2008 memorandum and may not have received this specific document. However, I did disagree with the September 2008 recommendation to place the company into conservatorship."
Was Mudd outvoted or do you know what else legitimized the imposition of the conservatorships?
Hello folks,
I would be very happy about the following announcement:
Activist investor Bill Ackman to join Fannie Mae's Board of Directors. His vast experience in the capital markets will help the company develop its capital restoration plan, which precedes a release from conservatorship.
Is that possible? Yes. Is that likely? Nope.
GLTA
Hi obi-terdictum,
Hi Donotunderstand,
Hi along4zride,
I see what you mean. But it all becomes clearer when you read the suggested pages about MBS TRUST.
Hi Doc,
Hi Potty,
a listing on NYSE or NASAQ would be top. But that doesn't necessarily protect you from price caprioles.
There are many volatile stocks out there. See BHC etc.
It will still take quite a long time until the stock will finally get some rest. Mnuchin's plan alone is not enough. The implementation could harbour uncertainties.
As the departing CEO of Freddie, Layton, said on TV: "An IPO/SPO is not safe. Better to recapitalize 4 years with retained earnings... common shareholders love it!
GLTY
Hi brooge,
Core capital is required to meet the minimum capital requirements. Watt has made two proposals on how the minimum capital could be determined: (page 22)
1. 2.5 percent of total assets and off-balance sheet guarantees.
2. 1.5 percent of trust assets and 4.0 percent of non-trust assets
Alternative 1: F+F together: approx. 138 billion dollars
Alternative 2: F+F together: approx. 100 billion dollars
I guess that Calabria tends towards alternative 2 because it takes better account of the actual risk.
According to this, F+F would have to retain 100 billion dollars in profits and/or issue new shares in order to leave the conservatorships. That would be all!
Watt's proposal is calculated in such a way that F+F would have survived the financial crisis of 2008 without outside help - even without a capital raise! Therefore I am convinced that Calabria will not make much higher requirements, if at all. Such an approach would have consequences for the entire housing market, including more expensive home loans.
If we win en banc, we would have already gone half way to the 2nd alternative by the end of the year - with retained earnings.
Keep strong, Fully
So do I.
That's why I write this at all. Fannie does not need 100 billion dollars to be released and never does.
GLTY