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What did Treasury post ? ... Share it or Link to post
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=151464107
I understand the technical and legal end of things, at this stage.
Yes.
But the GSE's are now keeping their profits until the $25 billion mark, and that's a significant step in the right direction for an administration that wants to release them from conservatorship.
Yes. Even though the conditions under which this happens are undesirable, retaining capital is essential for release from conservatorship.
And at some point in the future, that end of conservatorship agreement will be on display. Its hard for me to imagine that it wouldn't include an official end to the NWS......whether by force or by acquiescence.
Yes. That is expected and required trajectory for long-term investors.
It isn’t.
Yes.
Except for eternal optimists like myself. I concentrate on the last sentence of Treasury’s press release, “Subsequent amendments to the PSPAs as maybe appropriate to facilitate the implementation of any eventual recapitalization plans”. I believe the amendments will be the result of either settlement with plaintiffs or court order. In the meantime, recap begins with the end of the Net Worth Swindle.
Without future amendments, the new terms are just a modern Catch 22. The more profitable they get, the more they owe Treasury.
https://home.treasury.gov/news/press-releases/sm786#.XZOhb2BEURw.twitter
Yes. There are many factors in play now and in the future. May the NWS end in court sooner rather than later. Time frame is about one and half to two years.
Understood, technically. But for all practical purposes, its over.
Unfortunately, technically, legally and otherwise, the NWS is not over. The operation of the NWS is mitigated and its effects postponed by the letter agreement for a year and a half. After this time, the Applicable Reserve Amounts are no longer in play.
If and when the courts decide to vacate the NWS or if and when Treasury and FHFA move to end the NWS, it is then over.
When the 3rd amendment and NWS are truly vacated and over, and shareholders and companies are indemnified with just retrospective remedies, a great deal (not all) of the existing legal, financial and political conflict and uncertainty will end. Legal cases will be decided or settled. Share price instability and volatility will lessen, political and bureaucratic types will not have an excuse for inaction, the financial stranglehold on the GSEs and shareholders will be removed, investment and capital raising will feasible and so on.
Where are those people who kept insisting that the NWS was not going to end this quarter?????
Total head fake trading day.
The net worth sweep has not ended. The net worth sweep has not yet been vacated by any court including the Fifth Circuit Court of Appeals en banc panel.
The sweep of the GSEs 2nd Qtr net worth (minus the 3 billion Applicable Capital Reserve) is a result of the 9/27/2019 letter agreement. Instead of $3 billion Applicable Capital Reserve, there is now $25 billion for Fannie and $20 billion for Freddie in Applicable Capital Reserve.
The third amendment and the net worth sweep still stand. However, FHFA Calabria and Treasury Mnuchin, like FHFA Watt before them, have upped the Applicable Capital Reserve, and in doing so, allow the GSE to retain earnings.
The action of the NWS has been modified and postponed but not yet ended.
holy cheet man, i see them on other dates like june 30 its right there on the first page under other deposites GSE dividends but it aint there on sept 30 thanks thanks thankshttps://fsapps.fiscal.treasury.gov/dts/files/19062800.pdf
That is correct and you are welcome.
that's good news--unless it shows up in the next qtr which would bu 10/1 new fiscal year
fingers crossed
Before that, Tables 1 and 2 need to be updated. Or new tables may be constructed. Searched for those but did not find any.
yay, so in the other qaurters they are posted ?
If you mean in the Daily Treasury Statement, then yes. They are usually posted in Deposits: Other Deposits
For example in Qtr 2:
https://fsapps.fiscal.treasury.gov/dts/files/19062800.pdf
Compare with Table 2. - https://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/Table_2.pdf
Updated Daily Treasury Statement
https://fsapps.fiscal.treasury.gov/dts/files/19093000.pdf
No record of GSE dividends posted in Deposits.
So the problem is not the hostility between commons and preferreds!
The problem is no trust in Mnuchin +OTC +MM.
The bottom line is no trust in Mnuchin!!
President Trump, find somebody else.
It is difficult to find a single contributing factor that determines share price. MMs, traders, brokers, fund managers, etc. have varying reasons and impulses to buy and/or sell different types of GSE shares at different price points and at different times.
For a market observer or investor, single or multiple factors can be contradicted by another factor or factors in an endless stream as is down daily in this forum.
An increasing liquidation preference is one financial factor that influences mentality and behavior.....
DJI -308., SPX.X -33., COMPX -81.
That counts among a myriad of other contributing factors.
Hi Obiter,
From what I understand it would mean preferred holders would get a better deal in the event of liquidation.
https://www.investopedia.com/terms/l/liquidation-preference.asp
Hi Il Padrino,
Would it not be the opposite? If the GSEs were liquidated in a bankruptcy or receivership (not really possible in the foreseeable future), senior and junior bondholders are paid first. Then the senior preferred would be next in line to be paid of what remains after the first payouts. After the senior preferred shareholder is paid then the junior preferred are paid and finally the common shareholders. The higher the liquidation preference of the senior preferred shares, the less cash there is available to distribute to junior preferred and common shareholders.
Could not resist the urge: Can someone explain how increasing the liquidation preference is positive for GSE stocks share price, especially the junior preferreds?
See:
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1
If_you want to see_if the sweep happened watch_this URL for yesterday's Daily Treasury Statement.
https://fsapps.fiscal.treasury.gov/dts/files/19093000.pdf
Sometime this evening they should post a document there. Look for a deposit attributed to "GSE".
If it's there - you know. If it's not there - you know.
Yes. Been at this for some time contrarian bull.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=99908552&txt2find=daily|treasury|statement
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=103258639&txt2find=daily|treasury|statement
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=151459436
Usually the Gov has the Link updated the same Day and now it looks they just remain the TDB for confusing and for not having the SP exploding !
IMO - I'm sure about this.
It is not usually updated the same day. It can be updated on the same day, but this not always done. After several years of examining these FHFA and Treasury tables on various sweep dates and calling FHFA to get information on sweep days, it is not usual not to have the Tables updated on the appointed day. It has usually taken one or more days after the announced date. An e-mail request was made today on this matter. No response yet.
See: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=151458721
You don't have to wait for the update to know the sweeps were taken.
That is possible.
So how can it be empirically known that the sweeps were taken without table/chart updates?
If the LOA stops the CASH movement for the quarter ending September
Then - do I have it right
We see cash move in Sept/Oct as its Q2 math and cash - pre any LOA
We see no cash move in Dec/Jan - if LOA is as I believe - as the first quarter of no huge SWEEP is Q3 and that is normally paid in Q4
So contrary to a read by another of your post
if the LOA is as understood here (starts Q3 math!) - there are two quarters of NWS sweep and two without … all one quarter lagged in action to the math
It seems the terms of the LOA have brought a significant degree of confusion as to what happens to Freddie's ($1.826 billion) and Fannie's ($3.365 billion) Qtr 2 2019 net worth amounts that have been previously slotted for payment at the end of the 3rd quarter (9/30/2019).
Suggestion: To know what the correct understanding of the LOA is, and to avoid engaging in speculations and interpretations, wait until the DTS and FHFA data tables update or FHFA tables are edited into a different form. All will become clear.
Thank You Obi - It makes sense now for me !
This means for 2019 we will have 3 Quarters of Retained Earnings.
There is an unsupported assumption that the actual 2nd Qtr 2019 net worth will not be swept so that the 2nd, 3rd and 4th Quarters will accumulate.
Better to wait until the updates occur. There is a very small wait time for the updates to appear.
so
did I read it right
cash is moving one more time - cash related to old buffer
but it is the prior quarter - one quarter lagged
the LOA when speaking to starting this quarter - speaks to the math and then the action we see lagged one quarter
so it is likely we see cash move but there was NO sweep of Q3 via the NWS terms ?
A net worth sweep of the GSEs (Table 2 and DTS) or an adjustment of the liquidation preference (Table 1) has not yet been publicly reported by the FHFA and Treasury.
What was reported in the previous message is the customary method used to send payment to the Treasury. There is no consideration of the LOA involved.
You're confusing something. The NWS illegally is Called Dividends by Treasury, therefore when NWS is paid its As Dividends mentioned in the Treasury Link. As End of March is Q1 and End of June is Q2 where End of September is Q3 and End of December is Q4 to keep in mind !
Do you mean the payment of each Q is always made 3 Months later and I'm confusing something ?
Yes. Dividend sweep payments for a specific quarter are paid at the end of the following quarter.
1. For example, GSE net worth profits in Qtr 2 2019 minus the $3 Billion capital buffer was marked to be paid in Qtr 3 2019.
2. As seen in Table 1. - https://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/Table_1.pdf
Freddie's net worth in Qtr 2 2019 was: $4.826 billion
Fannie's net worth in Qtr 2 2019 was: $6.365 billion
3. Minus the 3 billion capital buffer from the above totals.
4. The payments to be made to Treasury by each GSE in Qtr 3 2019 is found in Table 2. https://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/Table_2.pdf
Freddie's payment to Treasury - $1.826 billion
Fannie's payment to Treasury - $3.365 billion.
At the moment, these payments are still TBD. Also, Table 1 has not been updated. The Daily Treasury Statement has not been updated. The Daily Treasury statement has more deposits than just the GSE deposits. The DTS updates according to processing time and can take 1 day or more to update. https://fsapps.fiscal.treasury.gov/dts/issues/2019/4?sortOrder=desc#FY2019Q4
Normally they are updated on the last day of the month.
"Given past experiences, the update is made a varying number of days after. The offices of Fannie Mae and Freddie Mac were once called to see if the payments were made on a date and no information was forthcoming. Twitter was suggested as a source but this was not found to be reliable, definitive or official as these publicly available FHFA and Treasury sources." https://investorshub.advfn.com/boards/replies.aspx?msg=129247093
Table 1: Quarterly Draws on Treasury Commitments to Fannie Mae and Freddie Mac per the Senior Preferred Stock Purchase Agreements ($ billions)
https://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/Table_1.pdf
Table 2: Dividends on Enterprise Draws from Treasury ($ billions)
https://www.fhfa.gov/DataTools/Downloads/Documents/Market-Data/Table_2.pdf
Daily Treasury Statement
https://fsapps.fiscal.treasury.gov/dts/issues/2019/4?sortOrder=desc#FY2019Q4
Unrelated to today's news, but I found this in the orignal PSPA from 2008:
Aunty is stretching your mind Obi...
Why assume what is not so?
She wants you to tap into your EQ. We already know your IQ.
Is this tapping into done by requesting guessing and speculation on FNMA/FMCC stocks, constitutional law, trading and finance, quantum mechanics? Why not ask about art, music, poetry, landscapes, puppies, etc.
She's good. I wouldn't mind seeing it either, you never let us down, I believe in you.
Thanks.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=103986243
https://investorshub.advfn.com/boards/replies.aspx?msg=103986292
https://investorshub.advfn.com/boards/replies.aspx?msg=103987081
Because "utility' is fungible.
What does this have to do with quantum mechanics and Schrödinger?
"Utility" is fungible?
How is "utility" fungible?
Please provide an example. Use an example to demonstrate the fungibility of the "utility" of FNMA or FMCC stock.
TRUTH is not.
What is TRUTH?
Obit: Be careful what you ask for (and who you ask for it); you are about to get another whopper from our dear Aunty Mamie
Yes. A whopper was requested.
Quantum mechanics (and Schrödinger) would differ...
How so?
The one you can't (or won't) SEE. Nor conceive thereof.
Mais c'est comme ça.
Si "ceci" ne peut pas être connu, "ceci" n'a aucune valeur utile.
Then tell me how we get there.
Get where?
Cuz your info is KNOWN FACTS. I wanna discuss UNKNOWN FACTS. Those we KNOW. And those we DONT. The KNOWN UNKNOWNS. As well as the UNKNOWN UNKNOWNS.
UNKNOWN FACTS? KNOWN UNKNOWNS? UNKNOWN UNKNOWNS? How about an exemplar of each of those?
Cuz the cat in your box is dead.
Do not have a box. The box given was yours and inside that box was a dead cat. Just pointing it as a not going to happen "scenario."
I choose another box where the kit-kot purrrrs happily. Otherwise. Whats the point?
What box is that?
Sure. If that's what ya got.
No significant current share price impact (today) other than being used as a trade on news play by MMs, day traders, short term traders, etc.
But I'd rather see the crib-notes on a SCOTUS ruling of UN-CONSTITUTIONALITY. And it's relative impact -- over some time period -- say a few weeks in March 20202 -- on PPS -- when FHFA is deemed unconstitutional -- and shuttered by POTUS -- who directs TSY to unwind its 'terms and conditions' to pre-2008 -- and to disgorge its cronies of ill-gotten FnF profits.
I'm sure you've war-gamed that scenario too.
The FHFA as an agency cannot be deemed unconstitutional and cannot be shuttered by a ruling on a part of single statutory provision. The single-director structure of the FHFA is at issue. That structure has and can be further ruled unconstitutional by SCOTUS if a Writ is granted, but not the entire agency.
So, the "scenario" given above is not applicable.
On whatever inside-info you hold tight to your vest. Or is embedded in those files you post.
I haven't finished my bullet-proof-coffee. So you need to break-it-down-for me-barney-style-please. Thank You Very Much.
Like the probable impacts of a gradually increased SPS liquidation preference and gradual increase in GSE capital reserves on current share price?
Do you have 'the skinny'? TYSM ;)
On what exactly?
My pleasure Guido2.
Statement from FHFA Director Mark Calabria on Letter Agreement with Treasury to Increase Fannie, Freddie Capital Retention
https://www.fhfa.gov/Media/PublicAffairs/Pages/Statement-from-FHFA-Director-Mark-Calabria-on-Letter-Agreement-with-Treasury-to-Increase-Fannie-Freddie-Capital-Retention.aspx
FOR IMMEDIATE RELEASE
9/30/2019
Washington, D.C. – “The Enterprises are leveraged nearly 1,000-to-one, ensuring they would fail during an economic downturn – exposing taxpayers once again. This letter agreement between Treasury and FHFA, which allows the Enterprises to retain capital of up to $45 billion combined, is an important milestone on the path to reform,” said FHFA Director Mark Calabria. “FHFA commits to working with Treasury in the coming months to amend the share agreements and further advance broader housing finance reform. These reform goals include limiting the government’s role in housing finance, increasing marketplace competition, focusing on affordable housing, and sustainable homeownership. The status quo is not an option. Now is the time to act.”
Fannie Mae Capital Agreement
https://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/9-27-19_FNMA-Capital-Agreement.pdf
Freddie Mac Capital Agreement?
https://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/9-27-19_FRE-Capital-Agreement.pdf
LOAs - Letter Agreements - September 27, 2019
Copy of the Fannie Mae agreement.
https://home.treasury.gov/system/files/136/9-27-19%20_FNMA%20Capital%20Agreement_0.pdf
Copy of the Freddie Mac Agreement.
https://home.treasury.gov/system/files/136/9-27-19%20_FRE%20Capital%20Agreement_0.pdf
Source:
https://home.treasury.gov/news/press-releases/sm786
Treasury Department and FHFA Modify Terms of Preferred Stock Purchase Agreements for Fannie Mae and Freddie Mac
https://home.treasury.gov/news/press-releases/sm786
September 30, 2019
WASHINGTON – The U.S. Department of the Treasury (Treasury) and the Federal Housing Finance Agency (FHFA) today announced that they had agreed to modifications to the Preferred Stock Purchase Agreements (PSPAs) that will permit Fannie Mae and Freddie Mac to retain additional earnings in excess of the $3 billion capital reserves currently permitted by their PSPAs. Under the modifications announced today, Fannie Mae and Freddie Mac will be permitted to maintain capital reserves of $25 billion and $20 billion, respectively. These changes to the PSPAs were recommended in the Treasury Housing Reform Plan (Plan) released on September 5, 2019.
“These modifications are an important step toward implementing Treasury’s recommended reforms that will define a limited role for the Federal Government in the housing finance system and protect taxpayers against future bailouts,” said U.S. Treasury Secretary Steven T. Mnuchin.
To compensate Treasury for the dividends that it would have received absent these modifications, Treasury’s liquidation preferences for its Fannie Mae and Freddie Mac preferred stock will gradually increase by the amount of the additional capital reserves until the liquidation preferences increase by $22 billion for Fannie Mae and $17 billion for Freddie Mac.
Treasury and each of Fannie Mae and Freddie Mac also agreed to negotiate an additional amendment to the PSPAs that would further enhance taxpayer protections by adopting covenants that are broadly consistent with the recommendations for administrative reforms contained in the Plan.
The Plan also recommended that Treasury and FHFA develop recapitalization plans for Fannie Mae and Freddie Mac after identifying and assessing the full range of strategic options. Subsequent amendments to the PSPAs may be appropriate to facilitate the implementation of any eventual recapitalization plans.
Copy of the Fannie Mae agreement.
https://home.treasury.gov/system/files/136/9-27-19%20_FNMA%20Capital%20Agreement_0.pdf
Copy of the Freddie Mac Agreement.
https://home.treasury.gov/system/files/136/9-27-19%20_FRE%20Capital%20Agreement_0.pdf
im not disagreeing with you.
Did not imagine that there was disagreement. Just a question as to actual storage.
a court order is needed to get the information.
Yes.
im saying its available.
https://en.wikipedia.org/wiki/USA_Freedom_Act
FOIA documents requests are limited, especially in relation to the GSE court cases. When asking for information the request must be very specific to the FOIA office of a specific department within an agency. One cannot request all the transcripts of phone conversations made in the US Treasury in 2012. The request must be detailed as to what specific conversations are wanted. Finally, there are nine exemptions that allow a request to be denied without further consideration. In the case of Fairholme et al. type of documents, these document types are automatically denied:
Exemption 5: Privileged communications within or between agencies, including those protected by the:
* Deliberative Process Privilege (provided the records were created less than 25 years before the date on which they were requested)
* Attorney-Work Product Privilege
* Attorney-Client Privilege
See: https://www.foia.gov/faq.html - What are FOIA exemptions?
Sadly. I was THAT srat who seldom did homework. It's what pledges were for...
Whereas not ALL calls and meetings may be transcribed. Perhaps it would be PRUDENT to request those that were. Just a thought. If one is serious about due-diligence.
Perhaps the Plaintiffs attorneys did so for those documents that do not violate the Federal laws limiting the recording of phone conversations and the use of such recordings.
There is no legal basis for a private citizen to request the phone records of still privileged records of telephone conversations of government officials without an approved court order.
Does that have anything to do with the Decalogue? Factors of ten?
Maybe I need more MCT in my coffee.
See: http://www.googolplexian.com/
this help?
https://en.wikipedia.org/wiki/Utah_Data_Center
Does this data center store ALL Treasury phone calls?
sorry its classified, but this is open source.
its stored and ready for declas.
Ok. There are federal and state laws regarding the recording of phone conversations.