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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.
Today in #Fanniegate,it's explained how The Secret Plan unfolded. DeMarco and Geithner implemented it after the numerous assault attempts on the FnF's ownership in 2011 failed. The warrant, the HR1849 and the HR2413. After that, the FHFA approved the rule CFR 1237.12 in July 2011 that allowed FnF to avoid the Restriction on Capital Distributions and continue to pay dividends but, instead of "to reduce the obligations" SPS set forth in HERA, "to meet their Risk-Based Capital level", that is, for their Recapitalization. This is because the SPS would soon be reduced to $0 (2013 and 2014) and they needed other theme to apply the dividend to. Anyone that denies what is set forth in the law, must be imprisoned. The Secret Plan is an open plan that anyone can read it in the law, the thing is that it hasn't been made public. Beware of the psychopaths that mock this plan. Only a crazy guy would mock a law.
Don't you see that you are again outlining a scenario where the Conservatorship doesn't exist all along?
You are talking about what is said in the offering circulars issued prior-conservatorship.
The dividend payments were suspended on day 1 of Conservatorship, thus the obligation to declare dividend favorable or unfavorable is moot. They just declare the dividend for the Treasury. The amount remainder for the other equity holders is zero.
Also you don't understand what HERA's succession of powers provision means. It's exactly for court matters.
A waste of money in litigation. The reason why the judge allowed Oral Arguments, after a laughter, is because he received a phone call by the DOJ stating that The Secret Plan will be announced in early March, so they allow the lawsuit to proceed in order to maintain the expectation of a settlement and don't disrupt the market if the JPS holders perceive that all the lawsuits (but WaFd's) are a joke.
HERA stipulates that their Powers were transferred to the Conservator, which means that the BOD are being directed by the conservator. If you have to sue someone, it has to be the conservator.
Note that the BOD laughs at the litigant Joshua Angel in a reply, stating that it seems that he comes from other planet and the conservatorships don't exist.
The Rule of Law isn't outlining a wish list.
????????????????
The rumor is buyout at $240 per stock.
PER 13 times. Look it up in the dictionary if you don't know what PER stands for.
That lawsuit is a joke.Primarily Joshua Angel YG sues FnF's Board of Directors, not the Government, so your statement
This will be resolved unilaterally by the Govt. The law is quite clear. The conspirators are the ones that spread the big lie of the Govt theft. A conservatorship isn't about stealing money from enterprises.
The shareholders go on the attack today in #Fanniegate.
FNMA securities are exempt from S.E.C. registration when they are originated, but it doesn't mean that the holder of its securities is exempt from filing a Schedule 13-D Beneficial Ownership report or that FNMA is exempt from filing earnings reports with the S.E.C..
Anyway, that's not the debate. What is denounced in my post is that the U.S. Treasury is considered beneficial owner of a 79.9% stake on FnF all along, that's why a Takings claim arises.
Furthermore, it makes the Warrant illegal, as in the provision that authorizes the Treasury to buy FnF's securities it stresses that it must be taken into consideration the need to maintain their status as private shareholder-owned enterprises, and with this warrant and subsequent determination from the legal point of view that is beneficial owner of a 79.9% Common Stock stake, regardless of the warrant being exercised, is violated.
Thus, the warrant is illegal and it prompts a Takings claim.
Within a month? Fairholme's attorney, Thomson, said in the conference call that in the case of an interlocutory appeal, the Federal Circuit's response would be expected at the end of this year or beginning of next. So, I don't know what made you think:
THE BEST IN-DEPTH ANALYSIS FIRST ON #FANNIEGATE.
EXPLANATION OF THE TAKINGS CLAIM: The US Treasury should have filed a Schedule 13-D Beneficial Ownership report with the S.E.C., within 10 days after the transaction of the Warrant.
Rule 13d-3(d)(1)(i): a security holder is deemed to beneficially own any underlying securities that it has the right to acquire within 60 days: through the exercise of a WARRANT, option, etc. Get it now?
Tremendous attack to U.S.Officials and the Justice Department in #Fanniegate today. The law that regulates the UST's purchases of FnF's securities, not only doesn't allow the purchase of the Warrant because it must take into consideration the need to maintain FnF's status as private shareholder-owned companies, something that with a warrant is violated, regardless of being exercised, but it's set forth another reminder contending that the UST must also take into consideration the restriction on the use of FnF's resources (the payments for participating in the MHA program are still pending, which include the funds that FnF advanced to servicers) and the most important reminder, the restriction on dividend payments, which is HERA's Restriction On Capital Distributions for undercapitalized enterprises. Those that are covering up the latter, like the infamous plaintiff Joshua Angel YG and the attorney for many plaintiffs, David Thompson, are trembling, because the restriction on dividend payments now appears in two sites in HERA. This is a crime of Making False Statements, up to 5 years in prison.
Wrong. Mnuchin holds a Public Service job and his actions are regulated by the Executive Branch Standards Of Ethical Conduct.
The Office of Personnel Management mentioned before, has examiners tasked with recommending the removal of any person with a job related to the Public Service.
BOMBSHELL! MNUCHIN's NO-SHOW IN COURT
Along with his buddies Fairholme's Berkowitz & Lampert, they received a summons to Court on Feb 3rd as co-defendants in the Mega Case of looting the retailer Sears.
I don't see a Notice of Appearance. Now the judge should issue an arrest warrant to ensure their appearance, as a normal procedure.
See the summons.
Office Of Personnel Management to recommend that Mnuchin be removed from the public service. This is the expectation after yesterday both Mnuchin and Berkowitz were scheduled to answer a summons to Court in the mega case of looting of the retailer Sears. His integrity has been called into question. More info in #Fanniegate.
***BREAKING***THE FHFA IS BEATEN UP BADLY IN #FANNIEGATE AFTER THE SHOCKING ANNOUNCEMENT OF HIRING OF A FINANCIAL ADVISOR.
Full detail here.
The charges against Timothy Howard weren't dismissed. That's a big lie that is repeated throughout the Social Media. The case was closed in 2006, right after the reports, when Fannie Mae, the S.E.C. and the OFHEO signed a Consent Order, where Fannie Mae was barred from engaging with Howard in the future.
There weren't further proceedings.
TIMOTHY HOWARD, EX-FNMA CFO,WAS INDICTED IN 2006 BY THE S.E.C. & THE OFHEO, predecessor of the FHFA.
Fannie Mae had the restate the earnings reports for the previous 4 years and resulted in a reduction of $11 billion Net Income. Fannie Mae had to pay a fine of $400 mll.
Howard was accused of setting up a scheme of illusion. Through accounting fraud, fannie mae always match the EPS target bonus.
Lack of controls, unprofessional staff, etc.
Fannie Mae was barred from engaging with Howard in the future.
You can't ignore that fact and accuse me of smearing him. The facts are clear. Like the fact that he now forms part of Fairholme's legal team.
You can read the OFHEO report here.
And the S.E.C. press release here.
And about The Secret Plan, it's the only one that upholds the law.
The former FNMA's CFO, Howard, who was indicted for multiple felonies in 2006: accounting fraud to get fat bonuses, mislead the shareholders,etc, belongs to Fairholme's legal team.
There's nothing to settle because the NWS is a fake Takings claim. The UST is a simple custodian of FnF's funds, ACCORDING TO LAW (The Secret Plan).
Also the dividend was impeccably suspended.
There's only a Takings claim for the Warrant and also a claim for carrying out The Secret Plan.
JUDGE SWEENEY ACCUSED OF NEGLECT OF DUTY IN #FANNIEGATE
Washington Federal filed a Class Action but the judge hasn't registered the action as Class Action yet. It's established the Class Period and Class Members receive notice. It'd prompt the Govt to cancel the warrant. Therefore, she enables a multi-year Takings claim.
We appreciate it. Every day dozens of new common shareholders join the Class Action challenging the Govt for the taking of private property (the warrant is deemed Beneficial Ownership regardless of being exercised) without a just compensation.
Temporary Takings deemed permanent due to:
-Govt actions through legislation after Emergency determination, assures that it will happen again. Like the temporary floodings. If it's not HERA, HORROR Act.
-FHFA's single-headed structure prompts arbitrary decision-making that ends up in an indefinite Conservatorship.
The money due to FnF isn't a compensation but a refund of money due. The funds will be deposited in a Retained Earnings account or whatever, the thing is that it's common shareholders' money because it's the real Equity stock. FnF could distribute the Retained Earnings account to the common shareholders in the form of a special stock dividend (read in a FHFA's report about the FHLBanks' excessive Retained Earnings account).
The JPS are obligations issued by FnF that depend on the specifications of their contract, called prospectus. They don't have economic interest on FnF's Retained Earnings account, Reserve for Future Losses, etc...
The money due are the funds that would otherwise have been deposited in a Retained Earnings account for their Recapitalization, according to Law. So, the Treasury is a custodian of FnF's funds and the FHFA/UST are carrying out a Secret Plan.
The hierarchy is related to the distributions of dividends and distributions of funds upon Liquidation. For the rest of scenarios, the JPS are lower ranking than the commons because they don't have Voting Rights. So, they are simple obligations, like a bond, MBS, etc. You should go to a message board of bond traders to learn more about the Preferred Stocks.
THE JPS WON'T BE CONVERTED INTO COMMONS IN A MILLION YEARS.
This is the greatest conspiracy in history and you can't base your investment case on what the authorities say. A Conservatorship isn't meant to extort the resources out of FnF with the profit sweep, nor the dilution of the common shareholders, taking advantage that the conservator is using our Voting Right.
All the amounts owed to the enterprises (The Secret Plan) is common shareholders' money and the JPS can't have access to that money with a swap to commons, and also taking advantage of the stock price depressed due to the warrant (a Takings case).
Forget the word conversion in the nonconvertible JPS. It's an illusion.
Better Carlos than crazy plaintiff Joshua Angel YG.
I said that RULE OF LAW GUY is lying, you can call it a mistake or whatever, but the truth is that if he puts words on judge Sweeney's mounth that she didn't say, it's called LYING.
The order announced on January 29 doesn't change my take: the judge chose Fairholme case as the lead plaintiff of the 12 Related Actions and the odds are that the 11 cases won't be addressed individually after Fairholme, if they have been regrouped, by definition of what regrouping means.
This is an attempt to bury Washington Federal's Class Action and its Takings claim.
BREAKING.NEW THEORY COULD MAKE ALL SHAREHOLDERS GET DAMAGES.
There are two theories: The ability to get remedies travels with the shares, outlined by judge Lamberth, and the second theory when a judge considers the class period upon a Class Action, like the one filed by Washington Federal on behalf of the absent parties.
WaFd established a cut-off date of September 5th, 2008, but the wrongful conduct denounced persists, a Takings claim both for the warrant and the use of FnF for state-action. According to a law firm specialized in Class Actions, "a class period may be lengthened or shortened after the initial complaint is filed, depending upon the facts and circumstances of the case." This could make the judge enlarge the class period through today.
The loss was the loss of the stock price on day one, but as of that date, the loss is the Opportunity Cost, that is, the warrant prevents the stocks from trading at their fair value of $250ps. Both themes are redressed with the cancellation of the warrant. The theme of the use of FnF for Public Policy is redressed with the release, but there are damages for 12 years of misconduct. This Takings case has prompted moral damages on the shareholders.
Remember that it's been labeled as Takings because a warrant is deemed Beneficial Ownership regardless of having been exercised and FnF report earnings on a diluted basis. That's from the legal and regulatory point of view, but from the economic point of view, the warrant makes FnF stocks trade at PER=0.2 times. The stocks are stripped out of most of their economic value.
Also, take into account that a temporary Takings is deemed permanent if the Govt actions have been done through legislation, because it assures that it will happen again. This is like the temporary floodings after the declaration of emergency.
The fact that the FHFA is unconstitutionally structured, with a single-headed structure, prompts the arbitrary decision-making that has ended up in an indefinite Conservatorship. Another reason to deem a temporary Takings as permanent.
Holders of JPS are NOT FnF shareholders.
It seems that Rule of Law Guy has claimed something that was a lie at the time, but judge Sweeney made it true yesterday when she issued an order outlining that the 11 related actions are pending the further proceedings in Fairholme case scheduled for February 7th, because that was not said before and her December 6th opinion pointed out the opposite, that Fairholme regroups the 12 Related Actions: "The Court infers that Fairholme plaintiffs have adopted the most important arguments of the 11 related actions......"
Do we have a date on ROFLG's comment?