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schaub,
Thanks, You are expressing most general sentiment of the people.
"Looks like the media and parties are getting there way...very unfortunate. It's obvious BOTH parties don't care about this Country, it's all about them, not all, but most. They are scared of losing their gravy train and will have to work for a living. Get ride of all and start fresh."
You need to include Mega Corporations and their Managements along with MSM, politicians and lobbyists in the same category. One can understand why these people are so mad with DJT. Party establishments, MSM and mega corporations opposed DJT with every tricks.
People voted for DJT forgetting their ideological affiliations because people are tired of the same political correctness. If these people do not like DJT messages and plans, then they can express their views, debate and come up with their own plans to make it better for all the people.
Ob tried to create massive welfare nation with globalist policies and stolen money from FnF and borrowed money without congressional law. The individuals and corporate beneficiaries are showing their ire at DJT for trying to change it.
rek,
Ican is ceasing to be informal advisor to DJT just to avoid criticism from the party of dinosaurs. Ican is doing this with the blessings of DJT. Ican
is not abandoning DJT. It is not negative news. That is why it is fake news.
Some see it is sign of new favorable developments to come in future.
Clark6290,
Why you have chosen Dec18 as date of no return?
What is the significance of Dec18?
Thanks
rek,
I have pasted news item url to read and decide for oneself.
In the news, there is Ican's letter that is clear about reasons.
I have limit of 15 messages. So I can not reply to all people who do not want make an effort read the news.
How about 1 trader selling to other trader and then buying back or inter account trading?
Fake news "Icahn backs away from trump "
read :
https://www.cnbc.com/2017/08/18/carl-icahn-drops-out-of-presidential-advisory-role.html
Dax1,
What happens to FnF MBS if FnF are wound down?
This is very hypothetical question and there are no such possibilities for many reasons. FnF are currently profitable for foreseeable future even though FnF are almost bankrupt because fake FHFA conservatorship is siphoning off FnF assets to the benefit of Gov. FnF investors can challenge receivership within 30 days of receivership.
Currently FnF are 100% private shareholder companies and it is ony FnF that Guarantee FnF MBS. Gov does not guarantee FnF MBS or any other FnF liabilities. This fact is very well known and documented in Gov as well FnF documents.
So far there are no known Gov announced plans for FnF MBS if FnF are ever wound down. MBS holders have contractual rights based on the MBS prospectus. MBA holders have rights over underlying mortgage loans based on which MBS have been issued. FnF have also issued CRTs (credit risk transfer) and the private buyers will be responsible for their part of the risk.
Besides MBS holders can file court cases like FnF shareholders against FHFA and Tsy for illegal NWS and frustrating their contractual rights.
This will be very messy and many times worser than 2008 crisis.
Dax1,
"Doesn't the $4 trillion in MBS. go on the U.S. debt? About %20 increase to
debt sheet, that will cause huge market and economic crash. True? "
False. Gov's commitment is limited to max of $200B credit to each of FnF.
Currently it is less than $256B credit.
Currently FnF MBS are guaranteed by only FnF and no one else.
It requires Congressional act to provide Gov guarantees to FnF MBS and Congress will not agree for that.
Why fix something that is not broken or
create a solution in search of a problem?
This problem is fomented by MBA members to grab FnF business.
Just revoke NWS, end FHFA Conservatorship and problem is gone.
If FnF are wound down, the biggest losers will be MBS holders.
FnF MBS will be traded at discount and will become illiquid.
Taxpayers (Fed) will be one of the biggest losers.
So it will never happen.
After net worth becomes to zero,
1. Sr Pref stockholders - taxpayers get 0.
Taxpayers have to write off $187.5B even though taxpayers have received their original investment and 10% interest.
All the FnF warrants have 0 value.
2. Jr pref stockholders get 0.
3. Common shareholders get 0.
4. However Shareholders have direct claims against FHFA and Tsy as per USCA-DCC Appeals.
Navy,
Thanks for making me LOL.
Donotunderstand
"Please provide one citation as I never saw such a convoluted idea out of BO --- wind down FnF because THE BANKS defrauded ? "
https://obamawhitehouse.archives.gov/the-press-office/2015/01/08/remarks-president-housing-phoenix-az
"called on Congress to wind down the government-backed companies known as Fannie Mae and Freddie Mac because Big Banks discriminated against or preyed upon or treated wrongly the buyers."
Donotunderstand,
You are mixing up different type of share capitals .
1. Pref. share capital is considered to be debtor's capital.
redeemable,
non-cumulative Fixed dividend (core capital)
get preference during liquidation.
2. Common or equity capital is considered to be owner's capital.
nonredeemable,
non-cumulative variable dividend (core capital)
get any leftover during liquidation.
3. Before NWS Sr Pref. share capital was debtor's capital
redeemable
cumulative fixed dividend (non-core capital)
get first preference during liquidation.
4. after NWS Sr Pref. share capital is owner's capital
nonredeemable
cumulative variable dividend (non-core capital) equal to all profits
and net worth of the company.
get first preference during liquidation.
Despite change in very nature of Sr pref shares before NWS and after NWS defendants claim that they are the same securities. This violates HERA's time limited authorization to Tsy to buy any new securities.
"Well, Mnuchin and Donald Trump are the first two who come to mind."
rek,
In politics, some thing are understood without being said because there are so many uncertainties.
Did Mnuchin and Donald Trump ever said that FnF will be wound down?
Is DJT budget saying that?
What Mel said in recent hearing?
Donotunderstand,
It is difficult to understand your explanation.
1. What you need to understand is, with NWS $187.5B remains as unpaid on FnF books even after FnF pay back ($187.5B+10% interest).
That is FnF still owe $187.5B to tsy.
2. Without NWS, $187.5B would have been accounted as fully paid on FnF books after FnF pay back ($187.5B+10% interest).
That is FnF owe $0 to tsy.
rek,
That itself says it all.
Obama said many things to please FnF haters, may be knowing very well what he was saying. Obama said FnF will be wind down because banks defrauded common people. Obama budget also stated that. But even Obama knew that it is not going to happen.
Obama was more interested in reducing deficit, debt ceiling and funding for obamacare. Obama wanted support from pro-bank lobbyists like Crkr and Wall street bank donors. Obama administration was full of pro bank, FnF haters. Obama said what ever pleased them.
But why did Obama replace pro-bank, FnF hater, extremist Ed with moderate Mel. As a lawyer by profession Mel is not going to violate laws. Mel has said that NWS violates the laws.
Look at the people in the DJT administration and also DJT budget. How many people can you list in DJT administration who are in favor of winding down?
Real Estate gene runs in DJT family, so DJT knows FnF more than any body else. Mnuchin is another super expert in mortgage finance. So MBA lobbyists and fellow travelers have lowered their expectations.
Hank, Obama, Tim, Ben, Ed could not wind down FnF despite all the lawless tricks. MBA, Fellow travelers, Carney, Light and media tried all the dirty tricks. It did not work.
Now we have rule of law POTUS and his administration wants to get FnF out of Gov control.
As a low level retail short trader, How can you be so sure?
contrarian bull,
I think the correct explanation would be like this.
Accumulated deficit represents attrition of capital assets to pay dividends.
In a normal situation declared dividends have to be paid out of profits and retained earnings only. If declared dividends are more than profits then it deceases retained earnings by the amount declared dividends exceed profits. If declared dividends are less than profits then it increases retained earnings by the amount profits exceed declared dividends.
In NWS, declared dividends are more than profits and retained earnings. So the difference comes out of liquidation of capital assets and increases accumulated deficit (negative).
Accumulated deficit represents dividends paid from the liquidation of capital assets. Retained earnings represent retained profits.
This has been happening since 2012 when DTAs were reversed. Initially FnF were allowed to keep net worth $3B each, then it is being reduced to 0.
contrarian bull,
If I were to make an uninformed guess, then accumulated deficit looks like something that would be reversed (negative to positive) when NWS is revoked.
With NWS on, the assets are reduced by accumulated deficit.
When NWS is reversed, then accumulated deficit will become retained earnings and add to assets.
contrarian bull,
accumulated deficit is opposite of retained earnings.
One needs to check with FNMA investor relations.
Below is the detailed description.
http://smallbusiness.chron.com/accumulated-deficit-balance-sheet-43886.html
Retained earnings refer to profits a company has kept since its beginning that it hasn’t paid out as dividends. When a business has paid more dividends and generated more net losses than profits over the life of the business, it has negative retained earnings, which it reports as an accumulated deficit in the stockholders’ equity section of its balance sheet. An accumulated deficit on your small business’s balance sheet typically has a negative effect on your business.
contrarian bull,
That is correct accounting.
However unless NWS gets reversed, that $187B remain as liability and can not be swept.
The problem with OTC stocks is there is not much visibility in terms of who is manipulating the stocks.
along,
Thanks, I appreciate your firmly held beliefs and opinions. I am not sure about what other information you have that makes you take such a hard line position.
But in investing things change everyday and strategies also need to be changed.
Donotunderstand,
It is so simple to understand.
Think the scenarios with NWS and without NWS.
1. With NWS
FnF have paid back $276B as dividend and still FnF owe $187B to tsy.
FnF networth is almost zero now. So assets and liabilities are equal.
2. Without NWS
$276B can be used pay off both liquidation preference ($187B) and 10% interest and FnF do not owe anything to tsy. So if you just remove $187B from liabilities then assets will be more than liabilities by $187B.
Rumpel,
If one goes by rule of law, logic, reason or anything that is good for the nation, economy, capital markets, housing markets, FnF stakeholders, taxpayers, current administration... then ending conservatorship and restoring FnF to rightful owners is the best option for all.
Only it is not not good for Shorties. Those who have bet against American economy and American Companies should not be benefiting from their bets.
People who have invested their hard earned money with the hope that rule of law will prevail, people who have invested in favor of American economy and American Companies should always win.
It will be very big win for DJT administration and FHFA Director. It will remove all economic uncertainties and create more revenue for Gov, release locked up FnF shareholder wealth, add atleast $200 to $400 to capital markets, spur spending and economic activity, create more jobs ...
There are no reasons not to do the right thing.
Thanks. It does not matter how the money is invested.
It is all paper accounting, debits and credits.
All these punk CEO are there to help themselves.
Will these CEOs ever do anything that will hurt their bottom lines, the profits, their salaries and bonuses?
DJT should have known true nature of these crooked CEO, before asking them to help in building the nation. It is these crooked CEO who have brought this country to this stage by bribing/lobbying.
SPSPA and NWS are private commercial contract agreements between FHFA conservator on behalf of FnF and Tsy. SPSPA and NWS are not laws.
In congressional hearing current FHFA director said NWS has trumped the laws, meaning NWS has violated the laws. So even if one goes by FHFA conservator, NWS has no legal validity.
"When NWS gets reversed FnF will have more than $200B reserve capital and do have to depend on Tsy or Fed. "
Correction, this should read as:
When NWS gets reversed FnF will have more than $200B reserve capital and do NOT have to depend on Tsy or Fed.
Under original SPSPA, once FnF pay back all their obligations (principal+10%interest), Sr. preferred stocks liquidation preference principal should be reduced to zero.
If FHFA conservator renegotiates with tsy to revoke NWS after FnF pay back as per original SPSPA or if Courts revoke NWS as illegal then all dividend payments of $276B will have to be adjusted against $187B+10%interest.
Currently FnF have almost paid back $187B+10%interest with $276B dividend, but under current illegal NWS, liquidation preference principal of $187B remains unpaid as a liability on FnF books.
So once NWS gets revoked $187B needs to be accounted as paid fully, and needs to be credited to capital reserves. Besides this FnF generate more than $10B to $15 profits every year, and also FnF have 10s of billions in DTA. This should add to be more $200B reserves.
So once NWS is revoked and FnF released from fake conservatorship, FnF may not need any help from tsy or fed for foreseeble future.
"They conspired and their employer profited from it."
jeddiemack,
This narrative is too simplistic to be true. How can you ever trust what obama official ever said anything about FnF conservatorship and NWS?
When did the stock traders, banks and their political appointees ever did something to benefit Gov.
Benefiting Gov was the facade used by obama official to hide the real beneficiaries - shorties and the financial establishment.
kimchee, thank you
along,
FnF pps movement is highly co-related to
1. Political news
It is all Good news for FnF - DJT won the elections. All FnF detractors are out of power and now working as lobbyists for MBA and Think tanks.
2. Legislative news
It is very uncertain and there is no support for getting rid of FnF and for give FnF business to banks. It is almost impossible that Gov will ever provide explicit Gov guarantees to private lenders.
3. Judicial News
Perry Appeal's Court ruling is the minimum baseline since Gov has accepted the that ruling as a win. Shareholders have direct claims and FnF have to comply with state laws. Judge Brown's minority opinion is very powerful influence on all the future rulings. Plaintiffs will be appeal to enbanc or SCOTUS.
Cases in Judge Sweeneys's court are going very well with all the lies open for public to see.
In DE Case in former DE chief justice Steele is doing very good job of striking down defense lies and case will surely go to jury trial
There are at least more than 3 cases challenging HERA under Constitution. Berko has hinted that DOJ/FHFA may find it very difficult to defend the case.
Florida Case against auditors has gone on appeal and most probably it will be remanded to state courts.
4. Administration news
Administration wants to end Gov control. FHFA wants FnF to build their reserves. FHFA has declared that it has reformed FnF.
5. FnF News
FnF have become profitable for foreseeable future. FMCC has paid back the SPSPA obligation along with interest plus few billions more. FNMA is going to fulfill its SPSPA obligation by next quarter. When NWS gets reversed FnF will have more than $200B reserve capital and do have to depend on Tsy or Fed.
6. Media News
Now media have started covering theft of FnF money and unconstitutional diversion to obamacare. Media are also covering Conservatorship lies. Carney and Light are the only reporters working with their spinning the wheel of lies and will change their colors soon.
7. MBA and Think Tank Lobbyists news
MBA and Think Tank Lobbyists have given up on FnF wind down rhetoric and now they are working to salvage their reputation.
8. News from banks
Biggest detractor WFC is in deep trouble with unlawful practices.
Other banks are maintaining silence.
9. Social media news:
This is the biggest factor that has exposed conservatorship lies and will continue to create awareness about valuable roles FnF play in housing sector.
Despite this you seem to losing your money by being short. Also you are going to lose your obamacare. So it is time to be long if believe in your uncle Warren's famous one liner.
Rep. Mark Walker (R-N.C.), chairman of the Republican Study Committee, on Wednesday criticized the White House for continuing the payments and Senate Republicans for dropping the repeal effort.
Fannie and Freddie face the moment of truth on their taxpayer bailouts
BY ALEX J. POLLOCK, OPINION CONTRIBUTOR – 08/14/17 09:00 AM EDT
Good user response:
https://th717.wordpress.com/2017/08/01/12-u-s-code-%c2%a7-4617a3a-l-as-it-relates-to-the-regulated-entities/#comment-1930
Along,
If you lose your short bets and also obamacare, how will you manage?
You need to save at least one option.
along,
Nobody is buying your arguments, because you are not supporting your arguments with data, facts and analysis.
Please try harder.
rek, Thanks.
"HERA supersedes FNMA corporate bylaws. "
Not sure about this. Then what corporate laws, FnF are using for their corporate governance.
rek,
If lawsuits are filed under both state and federal laws by citizens of different states, then does it not make diversity jurisdiction?
https://en.wikipedia.org/wiki/Diversity_jurisdiction
In the law of the United States, diversity jurisdiction is a form of subject-matter jurisdiction in civil procedure in which a United States district court in the federal judiciary has the power to hear a civil case where the persons that are parties are "diverse" in citizenship, which generally indicates that they are citizens of different states or non-U.S. citizens. (Corporations, as legal persons, may also be included.) Diversity jurisdiction and federal-question jurisdiction (jurisdiction over issues arising under federal law) constitute the two primary categories of subject matter jurisdiction in U.S. federal courts.