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Los of shares being sold.
FNMAS and company way up. Bid up a dollar on all preferred.
Either that or there has been a lot of flipping. I think there was 600m shares traded between the 3rd and 28th with only an 85m increase. Someone is buying all these shares though. On the 4th there was a 5 digit buy on the ask for 12m shares at 00125.
There have been a lot of share sold for it to have only gone up around 75m between the 3rd and 28th.
MICA has done this at every step. They show 2500 but it takes between 10 to 15k to move them.
Artmans comment is hilarious. Bush admin. created HERA on 7/30/2008 to fund a law in 2010 for a guy that had not been elected yet.
Anyone have a link showing the conversion rate?
I agree with you on the effect it will have. I don't think the way it will be paid for will be anywhere near bipartisan. You can have the government pay up front or private money will pay upfront. The new tax cuts tells me it will be the latter. Until I see it for myself I believe this will huge giveaway of our roads airports bridges ports etc.
Agree
IMO it will come from private money like Ackman. He has talked about it. Say it cost 100 million to upgrade a highway, bridge, port, etc. They will get 80 percent of that in tax breaks and will own the 100 million dollar project for 20 million plus what ever fees they will charge the public for usage. It will be one hell of a sweet heart deal.
Infrastructure is coming and it will be the largest give away ever seen.
Revisiting Fannie Mae and Freddie Mac Takings Lawsuits in the Wake of Yesterday's AIG Decision
The decision issued yesterday by Judge Thomas Wheeler of the Court of Federal Claims concerning the lawsuit by Starr International, a large shareholder of AIG, will have significant implications for the similar claims brought by various shareholders of Fannie Mae and Freddie Mac (hereinafter, the "GSEs"). I've previously put up a postcritical of the trial judge's Fifth Amendment reasoning in certain of those lawsuits.There are definitely some similarities between the two and they should be worrisome to the government and heartening to the GSE shareholders. For example, Judge Wheeler refers to the Federal Reserve taking a 79.9% stake in AIG equity (in the form of convertible preferred) as "draconian", writes that the government "usurped control of AIG without ever allowing a vote of AIG's shareholders" and notes that, even after the loan was repaid, the government retained its stake. Of course those facts are all identical to the government takeover of the GSEs.But I see some significant differences as well. Judge Wheeler makes a very significant ruling under the Fifth Amendment, using a theory that, frankly, I was heretofore unaware of, that of "illegal exaction". In short, he concludes that, while the Fed was authorized by law to provide credit to AIG, it did not have the authority to exact, as a price for such credit, a 79.9% equity stake in AIG. "An illegal exaction occurs when the Government requires a citizen to surrender property the Government is not authorized to demand as consideration for action the Government is authorized to take." It is fascinating that there is language directly on point from an 1884 Supreme Court opinion, Swift & Courtney & Beecher Co. v. United States, 111 U.S. 22, 28-29 (1884) (“The parties were not on equal terms. . . . The only alternative was to submit to an illegal exaction or discontinue its business.”). Judge Wheeler also rejects the argument that the emergency context augmented the government's legal power or diminished the citizens' Fifth Amendment rights:"The Government’s inability to require forfeiture of rights and property in exchange for discretionary benefits is unchanged during times of crisis, when the rule of law is maintained by requiring that government acts be authorized by statute and the Constitution. Home Bldg. & Loan Ass’n v. Blaisdell, 290 U.S. 398, 425-26 (1934) (“Emergency does not create power. Emergency does not increase granted power or remove or diminish the restrictions imposed upon power granted or reserved. . . . ‘Although an emergency may not call into life a power which has never lived, nevertheless emergency may afford a reason for the exertion of a living power already enjoyed.’”) (quoting Wilson v. New, 243 U.S. 332, 348 (1917)); Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 653 (1952) (Jackson, J., concurring) (“In view of the ease, expedition and safety with which Congress can grant and has granted large emergency powers, certainly ample to embrace this crisis, I am quite unimpressed with the argument that we should affirm possession of them without statute. Such power either has no beginning or it has no end.”)"Of course, that makes sense - the government can always take property to address an emergency or otherwise; it just has to pay just compensation when it does so.Somewhat counter-intuitively, Judge Wheeler proceeds to quash Starr's takings claim, because, he says, a "taking" only occurs if the government's action is authorized; here, he says, since the exaction was "illegal", it was unauthorized. This is purely a matter of semantics: either label says the government took property from private persons in violation of the Fifth Amendment. But, as I show in my discussion below of the GSE takeover, the statutory foundation for the government to take a controlling equity stake in them is better than the Fed had in the AIG context. Still, as I argued last year, a statutory foundation cannot, given the Supremacy Clause, relieve the government of its Fifth Amendment constraints. It still has to pay just compensation for taking, even if the taking is authorized and a true emergency exists. However, the specter of imminent bankruptcy causes the judge to determine that AIG shareholders sustained no economic loss from the illegal government action and therefore are due no further amount of "just compensation". He writes:"Common sense suggests that the Government should return to AIG’s shareholders the $22.7 billion in revenue it received from selling the AIG common stock it illegally exacted from the shareholders for virtually nothing. However, case law construing “just compensation” under the Fifth Amendment holds that the Court must look to the property owner’s loss, not to the Government’s gain. Brown v. Legal Found. of Wash., 538 U.S. 216, 235-36 (2003) (The “‘just compensation’ required by the Fifth Amendment is measured by the property owner’s loss rather than the [G]overnment’s gain.”); Kimball Laundry Co. v. United States, 338 U.S. 1, 5 (1949) (“Because gain to the taker . . . may be wholly unrelated to the deprivation imposed upon the owner, it must also be rejected as a measure of public obligation to requite for that deprivation.”); United States v. Miller, 317 U.S. 369, 375 (1943) (“Since the owner is to receive no more than indemnity for his loss, his award cannot be enhanced by any gain to the taker.”); Boston Chamber of Commerce v. Boston, 217 U.S. 189, 195 (1910) (Holmes, J.) (“And the question is, What has the owner lost? not, What has the taker gained?”)" And then he finds that the shareholders, had the government not intervened, would have lost everything. So there is no further compensation required. In doing so, he draws close parallels to the Takings cases brought by various auto dealers whose franchises were terminated as part of the restructurings of GM and Chrysler, in which the Federal Circuit opined: " Absent an allegation that GM and Chrysler would have avoided bankruptcy but for the Government’s intervention and that the franchises would have had value in that scenario, or that such bankruptcies would have preserved some value for the plaintiffs’ franchises, the terminations actually had no net negative economic impact on the plaintiffs because their franchises would have lost all value regardless of the government action."It's an interesting question whether a judge should opine on a liability issue when damages under the plaintiff's theory are going to be zero. Recently, in her Marblegate opinion, Judge Failla, SDNY, did the same thing, opining that an insolvent company's proposed out-of-court restructuring violated the Trust Indenture Act of 1939, even when she found, as a fact, that the complaining bondholders would receive no value if the restructuring failed and the company entered bankruptcy. So Judge Wheeler is not alone. I still am not sure it is the best practice under Article III, but I gather that appellate courts want the trial court to cover everything to avoid piecemeal litigation, so it may be just a fact of life in our legal system. Comparison to the GSE Takings LawsuitsThere are a few distinctions between the AIG opinion and the litigation challenging the government's takeover of publicly-traded Fannie Mae and Freddie Mac. First, the government's financial support of the GSEs came from the Treasury Department, not the Federal Reserve system; so a different statute was involved. The statute (the Housing and Economic Recovery Act of 2008) established the Federal Housing Financing Agency (FHFA) as an "Independent agency" and authorized it to become conservator or receiver of the GSEs and in such role, to “immediately succeed to—(i) all rights, titles, powers, and privileges of the [GSE], and of any stockholder, officer, or director of such [GSE] with respect to the [GSE] and the assets of the [GSE].” Second, the equity stake Treasury took in the GSEs was a combination of preferred stock and warrants to buy 79.9% of the common stock; the stock itself was not convertible. as in AIG. This may or may not be a matter of form; one legal consequence was that the Treasury Department did not vote a formal 79.9% equity stake in the GSEs. Of course, with its sister bureaucrats at FHFA, rather than a private board of directors of private citizens, running the company, it didn't need to. As to whether or not the Treasury's equity stake was properly authorized, "HERA amended the GSEs’ charters to temporarily authorize Treasury to “purchase any obligations and other securities issued by the [GSEs].” 12 U.S.C. § 1455(l)(1)(A) (Freddie Mac); 12 U.S.C. § 1719(g)(1)(A) (Fannie Mae). This provision also provided that the “Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.” 12 U.S.C. § 1719(g)(2)(A). Treasury’s authority to invest in the GSEs expired on December 31, 2009." So arguably, the "illegal exaction" theory is not available in the GSE context if you read the statutory language broadly and literally. That is not disabling because, as Judge Wheeler describes it, the "illegal exaction" analysis is just the label that is applied to a taking that is unauthorized; proving authorization does not necessarily equate to the absence of a taking. Further, an "illegal exaction" argument still might be made, if one concludes that the statutory authorization to succeed to the rights of "any shareholder, officer or director" does not authorize a right to engage in self-dealing and thus breach the fiduciary duty of loyalty, because none of them would be understood to have the "right" to do that. In that view, any value extracted via self-dealing would be unauthorized and thus an illegal exaction. Apparently, from another blog I looked at, although no one has yet succeeded in getting a federal court to review FHFA's actions as conservator, in Sweeney Estate Marital Trust v United States (D.D.C. 2014), District Judge Amy Jackson noted that under FIRREA, which she characterizes as HERA's predecessor statute, judicial review was provided consistently where the federal agency was alleged to have taken actions as conservator tainted by conflict of interest. So, that line of attack appears to be the crucial determinant of the GSE plaintiffs' ability to challenge the Third Amendment. Third, a lesser-known, but extremely salient fact about the shareholder lawsuits in the GSE context is that they do not challenge the September 2008 terms. Rather they challenge a much later self-dealing transaction, described by Judge Lamberth as follows:"On August 17, 2012, Treasury and the GSEs, through FHFA, agreed to the Third Amendment to the PSPA, which is the focus of this litigation. The Third Amendment replaced the previous dividend formula with a requirement that the GSEs pay, as a dividend, the amount by which their net worth for the quarter exceeds a capital buffer of $3 billion. The capital buffer gradually declines over time by $600 million per year, and is entirely eliminated in 2018. In simpler terms, the amendment requires Fannie Mae and Freddie Mac to pay a quarterly dividend to Treasury equal to the entire net worth of each Enterprise, minus a small reserve that shrinks to zero over time. These dividend payments do not reduce Treasury’s outstanding liquidation preferences." (Citations and internal quotations omitted).The key point to see here is that, by August 17, 2012, the GSEs were not "on the verge of bankruptcy"; indeed, they were already profitable as Judge Lamberth himself acknowledges elsewhere in the opinion. So, the damages analysis Judge Wheeler uses -- correctly, in my view -- that AIG's shares would have had no value in the absence of government action, is not going to help the government in the GSE context. Rather, everything will come down to whether or not the self-dealing cash sweep agreed to between FHFA and Treasury was a cognizable taking or not. If it is, the just compensation claim will be very large. I suppose I should disclose that my firm was one of the firms advising AIG at this time and further that I spent Sunday the 14th of September in their headquarters with an M&A partner and three top-bracket private equity firms that were studying whether or not a structure could be found to invest rescue funds. Discussions never got off the ground because AIG's team of financial advisors determined its hole was too large for them to fund and AIG really spent no time at all with them. In fact, I spent the evening chatting on the phone with friends at Lehman and also with advisors to the Obama campaign, in both cases about the implications of the impending Lehman bankruptcy. A memorable day and night in my career.
The problem I see with a high share price is the people that can settle these cases make tons of money if this goes to 10 or 15. They will have no problem settling at that price. The don't care about anyone else anymore than the plaintiffs in the accounting law suits.
Poakatas? He?
Who are you talking about Warren or Trump?
LOL Stopped paying attention at Follow the white rabbit.
https://www.google.com/amp/s/amp.dailydot.com/unclick/follow-the-white-rabbit-conspiracy-theory/
Because looking out for the little guy became a thing of the past about 30 years a go no matter who's in control.
That's a joke right.
Considering they didn't really start buying until around 2005 that narrative falls apart.
They were never forced by anyone. The CFPB has put in rules to protect against these toxic loans of the past. I assume they will eventually be done away with.
They seem to not care either for some reason.
I sure can if I move and get a license in a different state.
There is a reason FOX has ignored this story. Especially Hannity. They don't pass up stories to slam Obama and dems. They don't even have to believe it if it plays well. Wish I knew why but I have always thought it was odd. Probably the same Briebart doesn't take advantage of it what ever that is.
Don't get me wrong I would make a 10 bagger but would still feel like the twins were abused just like AIG compared with other companies that received funds. I also think it's still possible as long as the price stays between 2 and 3 dollars to raise the OS to 5b RS to 250-500b and then start raising capital diluting it back to the current 1b os. I may be completely wrong on this and hope I am. There is nothing wrong with expecting better gains but some act as if there is. Why should the government expect any better return from f&f then any other company that received funds.
At least now all the people complaining about only one person being in charge will now stop.
What does this mean? What did the senators lose or give to have to get back sometime.
Of course he would. Always been worried about that. This could settle at 8 dollars and he makes a killing. The little guy is going to come away from this feeling cheated which is par for how things go. Ackmans Berk Munchin or Trump does not give a damn about the average shareholder and the fact that people think they do will set some up for disappointment.
Wait until infrastructure. They will be a Black Friday like sale and highways,bridges, ports, etc will be had for 10 cents on the dollar.
The first two is not happening plus as usual the deficit will rise. That leaves number 3. Surely he won't go 0 for 3.
I thought that was the same one.
That is what has always worried
me.
Oh well.
US Economy
Did Fannie and Freddie Cause the Mortgage Crisis?
No, They Did Not Cause the Mortgage Crisis. Here's What Did
Fannie and Freddie made it possible for many more people to afford their own homes. Photo: Sean Martin/Getty Images
By Kimberly Amadeo
Updated November 09, 2017
Were Fannie Mae and Freddie Mac the real cause of the subprime mortgage crisis? It's dangerous to think so. That's because they were a prime example of the broader economic forces that caused the banking credit crisis and bailout. Legislative attempts to rapidly wind down Fannie and Freddie would not prevent another recession. Worse yet, it could devastate the housing market.
Role in the Mortgage Market
Fannie and Freddie were government-sponsored entities.
It meant that they had to be competitive, like a private company, and maintain their stock price. At the same time, the federal government implicitly guaranteed the value of the mortgages they resold on the secondary market. That caused them to hold less capital to support their mortgages in case of loss. As a result, Fannie and Freddie were pressured to take on risk to be profitable. They also knew they wouldn't suffer the consequences if things turned south.
The government set them up this way to allow them to buy qualified mortgages from banks, insure them, and resell them to investors. Banks used the funds to make new mortgages. Throughout the years, Fannie and Freddie supported half of all new mortgages issued each year. By December 2007, when banks began to constrict their lending, they touched 90 percent of all mortgages.
Role During the Housing Crisis
Government regulations prohibited Fannie and Freddie from buying high-risk mortgages.
But as the mortgage market changed, so did their business.
Between 2005-2007, they acquired few conventional, fixed-interest loans with 20 percent down. They loaded up on subprime, interest-only, or negative amortization mortgages. Those were the types of loans banks and unregulated mortgage brokers issued.
Fannie and Freddie made things worse by their use of derivatives to hedge the interest-rate risk of their portfolios. But as private sector companies with shareholders to please, they were doing this to remain competitive with other banks. They were all doing the same thing.
Fannie Mae's loan acquisitions were:
62% negative amortization
84% interest only
58% subprime
62% required less than 10% downpayment.
Freddie Mac's loans were even more risky, consisting of:
72% negative amortization
97% interest only
67% subprime
68% required less than 10% downpayment.
These exotic and subprime mortgages made Fannie and Freddie's loan acquisitions toxic.
Fannie and Freddie Held Fewer Toxic Loans than Most Banks
Regulations made sure Fannie and Freddie took on fewer of these loans than most banks. They acquired more of these loans to maintain market share in a very competitive market.
In 2005, the Senate sponsored a bill that prohibited them from holding mortgage-backed securities in their portfolio. Congress wanted to reduce the risk to the government. In total, the two GSEs owned or guaranteed $5.5 trillion of the $11.2 trillion mortgage market.
But the Senate bill failed, and Fannie and Freddie increased their holdings of risky loans.
They could make more money from the loans' high interest rates than from the fees they got from selling the loans. Again, they were seeking to maintain high stock prices in a very competitive housing market.
As government-sponsored enterprises, Fannie and Freddie took on more risk than they should have. They didn't protect the taxpayers who ultimately had to absorb their losses. But they didn't cause the housing downturn. They didn't flood the market with exotic loans. Instead, they were a consequence, not a cause, of the mortgage crisis.
Derivatives Helped Cause Fannie's Downfall
By 2007, only 17 percent of their portfolio was subprime or Alt-A loans. But then housing prices declined, and homeowners began defaulting. As a result, this relatively small percentage of subprime loans contributed 50 percent of the losses.
As GSEs, Fannie and Freddie weren't required to offset the size of their loan portfolio with enough capital from stock sales to cover it. It was a result of both their lobbying efforts and the fact that their loans were insured. Instead, they used derivatives to hedge the interest-rate risk of their portfolios. When the value of the derivatives fell, so did their ability to guarantee loans.
This exposure to derivatives proved their downfall, as it did for most banks. As housing prices fell, even qualified borrowers ended up owing more than the home was worth. If they needed to sell the house for any reason, there would lose less money by allowing the bank to foreclose. Borrowers in negative amortization and interest-only loans were in even worse shape.
Eliminating Fannie and Freddie Would Destroy the Housing Market
Some legislators propose eliminating Fannie and Freddie. Others suggest that the United States copy Europe in using covered bonds to finance most home mortgages. With covered bonds, banks retain the credit risk on their home mortgages. They sell bonds backed by those mortgages to outside investors. That allows them to offload interest rate risk.
What would happen if Congress eliminated Fannie and Freddie? It would dramatically reduce the availability of mortgages and increase the cost. Banks hesitate to issue mortgages that aren't guaranteed. Mortgage interest rates could go as high as 9-10 percent. Mortgages would become rare and expensive. The U.S. housing market would collapse.
Take away giving loans to people that couldn't afford them and the fraud in the repackaging and selling of the loans there was no housing problem. I keep hearing Munchin and all the others saying they need to be fixed before the next downturn. No downturn has ever been a problem for the GSEs before 2000 when responsible lending went out the window.
I would think congress and the administration will stick to what they are consistent at and it's not backing the average Joe over big money.
Sounds good to me. Haha
Agree. No amount ha moved him down. He is slowly moving up.
MICA has been on the ask and bid with fake 2500 shares. It has taken over 50k to move them off the ask and then moves up a penny.
I know it's not the same but I think buying share should be the same as buying debt. If someone buys a debt you owe you can't say the buyer has no claim because he came in after the effect knowing that I had not made an attempt to pay. Also if they continue to illegally take after you purchase it should be the same as once you work with the new debtor it restarts statute of limitations. When you buy the shares you buy everything that goes with it good or bad. As a non attorney this makes sense to me which doesn't mean a lot. lol