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Thanks, I saw that on SCOTUSBLOG the other day, but haven't looked into it! As I recall, one of the more interesting cases decided by SCOTUS last term was whether or not a federal agency can keep the fines it receives from bad regulated entities or does it have to pass some or all along to the "victims".
Thanks for the link!
No, I think you and Skeptic 7 are wrong on that one! If you think ACB and the other Justices aren't very bright you'd be mistaken! The SCOTUS gets it, just as many of the Judges in the 5th Circuit EnBanc Panel did!
Can you give me some specific examples from the oral arguments that backs you're claim?
One of my favorite lines was from Justice Breyer (who typically leans left of center):
"One thing Conservators DON'T DO IS TAKE ALL THEIR WARDS PROFITS!"
They get it, but what the end result is will be determined, likely before July 1st.
LUV ME SOME SUB $2 FINANCIAL JUGGERNAUTS! BUT I ALWAYS WANT TO BUY AT THE BOTTOM, SO I WONDER WHAT PRICE THAT IS?
No, the SCOTUS can see that the Nationalization continues, instead of draining their cash quarterly, da GUBMINT will just keep running a tab to extract their value via the "Liquidation Preference" while keeping their boot on the neck of the owners!
I think today alot of "investors" are hitting the exits because they bought in under the hope of SM writing down the warrants and "getting them out of government control".
Many don't want to stick around and watch da GUBMINT continually move the exit goalposts!
Any guess on how low it will go?
So the only thing left is via Retained Earnings and the court cases? Seems like SM capped the Multifamily Originations to $80B a year.
How we have to pay a yet to be determined commitment fee AND fork over a dollar for dollar increase in Liquidation Preference?
Nothing new from Charlie!
I don't know he maybe definitely may surprise us, I just read the Joe Light article for the 4th time and am still scratching my head! Sounds like pspa lite BUT then the article says, "While the revisions have been presented as if a deal has been finalized, they could still change before they are publicly released.
The actions will lock-in several policies the companies are already subject to under FHFA Director Mark Calabria, said the people who asked not to be named to discuss the matter before the changes are announced. They include ensuring big lenders don’t get advantages unavailable to smaller ones when doing business with Fannie and Freddie and limiting the amount of higher-risk mortgages that the companies can guarantee.
Most significant, Fannie and Freddie won’t have to pay their profits to the government until they have much bigger capital buffers to protect the companies against losses. Right now, Fannie and Freddie combined can’t hold more than $45 billion in capital, after which they must pay their entire net worths to the U.S. Treasury."
How does one "lock-in policies the companies are already subject to under MC"?
Answer: By conditioning certain milestones by the companies with incentives?
Maybe I am overthinking this and should just wait a couple more days.
Interesting times!
I'm keeping some powder dry in case it drops like a rock! But, I am optimistic long term and even though BOTH PARTIES, THE MBA, NAR, NHBA, TBTF BANKS, PRESIDENTS, ET AL. HAVE TRIED TO DRIVE STAKES THROUGH THEIR HEARTS, THEY JUST KEEP GOING, AND GOING!
I know, you're skeptical, but one way or another I think the days of the nws are numbered!
SM and MC need to fix this and doubling earnings retention with a like increase in Liquidation Preference ain't going to do it!
I think something is gonna happen! Will be interesting to see exactly what.
Why would you continue to sweep the gses profits to the US Treasury when they need to build a 1st Loss Capital Position to protect the taxpayers?
Yup, I mean they have tried for the last 12+ years and NOTHING WORKS BETTER! SM AND MC HAVE THE POWER TO FINISH THE LAST UNFINISHED BUSINESS OF THE 2008 CRISIS! GET'ER DONE!!!!!!!
SM defending the nws at SCOTUS, telling the SBC that UST deserves a "market return" on their "investment", and doing the bare minimum to allow the gses get back on their feet are all indicitive of Promises NOT KEPT.
Yet when repeatedly queried by the mostly D SBC Senators and HFSC Representatives SM (and MC) in writing says we can amend the pspa to get them out of conservatorship.
Also there's the Housing Plan that mentions Administrative action if Legislation does not occur.
I THINK SM HAS MAXIMUM FLEXIBILITY HERE, HAS THE POWER TO DO WHAT IS RIGHT AND THE POWER TO DO NOTHING OR CLOSE TO IT.
We'll see what happens!
Clearly, the nws is incompatible with "getting the gses out of government control", how can SM leave it in place after telling Maria B. on Fox Biz, 4 years ago, "Maria, we need to get the gses OUT OF GOVERNMENT CONTROL!"
Promises made, promises kept or Promises made, promises not kept?
I guess we will know here shortly!
That's right Nats1, but it is a hell of a title to add to your Curriculum Vitae!
NICE! Wharton is one of the best Biz Schools in the country. I was pretty impressed with her work with Georgetown Professor Adam J. Levitin(?).
Maybe she could see if he could be in a prominent position at FHFA.
Also it's a pretty demanding job, getting slammed all the time by politics, management, and ALL the players in the Housing Finance Industry.
Alot different pace then the prominent academic life and super time consuming, we'll see what happens!
She's a pretty prominent figure and she has periodically appeared over the years on the biz news channels. Do you think she would take the job if offered?
Here's some insight this afternoon from TH on Professor Susan Wachter:
"The preface to this book–reproduced at the beginning of the link above–gives Wachter and Levitin’s thesis of the cause of the mortgage crisis, which I think they’ve pegged correctly. That’s a big plus, because if you set out to fix a problem it’s essential to have properly diagnosed it to begin with. I’m not wild about the “Franny Meg” idea (a combination of Fannie and Freddie), but the recommendations of significant but not excessive capital, selective use of risk-sharing techniques, and a paid-for federal backstop all could be adapted for the two companies that exist today, without the legislation required to combine them.
It’s interesting that at the beginning of the preface the authors describe themselves as “an odd couple…a law professor and a real estate economist separated by a generation….Adam knew something about the mechanics of securitization and foreclosures, and Susan knew quite a bit more about real estate economics.” In my earlier comment about Ms. Wachter I described her previous work on Fannie and Freddie I was familiar with as “somewhat theoretical and academic.” It appears that the collaboration with Mr. Levitin has improved her real-world orientation and experience, which also is a big plus if she were to become Director of FHFA in the Biden administration."
HaHa, yeah it's 10 bucks/day! I think that sounds reasonable and realistic, the nice thing is we will know for sure soon!
I think that's what ACG said today, but I'm not sure.
SM won't do it because you made him wait so long at the airport, remember, heeeeheeee! It does seem kinda weird that he won't do anything, doesn't he have to at least raise the retained earnings cap? Why not throw in a path to exit the 12+ year "conservatorship"? They've had 4 years to think about it, they've told everyone what type of pspa amendments they would do, and yet NOTHING!
It is so obvious that the NWS is a blantant Nationalization, I know SM HAS TO REALIZE THIS, SO WHY WON'T HE UNDO IT?
If your answer is, because he is a frickin idiot or criminal, try to tell me more if you can...
I know, AND apparently it DID work in Germany, but only with extreme Governmental oversight and draconian mortgage terms!
For some reason(s) the gse model worked swimmingly for a 1\2 century plus, then the proliferation of Private Label MBS brought the whole system crashing down with its inevitable race to the bottom in both loan quality and quantity and price! I don't know if you lean towards a Jacobian philosophy, but isn't it ironic that it takes Governmental Interference (i.e., an implicit/explicit Governmental Guarantee of timely P&I payments to MBS Investors) to make 20% of the US Economy (i.e., Housing) sustainable in the long run (much to the chagrin of Libertarians and free market R's)?
I've listened to most of what the Wharton? Real Estate Professor Susan Wachter has had to say over the years, and I think you are spot on that she gets it, although it would be interesting to dig deep and find out if the NAR funded any of her academic research, as for some reason NAR, NHBA, AND THE MBA have CONSISTENTLY opposed release over the last 12+ years (I think they just sent a letter to Steve Mnuchin the other day saying, "don't do anything on release, the world could end!)
I think the best education I received was reading the testimony of Georgetown University Professor Adam J. Levitin (whom Professor Wachter has worked with) to the SBC in 2011, when they were deciding whether or not to hand out Explicit Government Guarantees to other Financial Intermediaries.
Here's the link:
https://www.banking.senate.gov/download/091311levitin-testimony
I think DJT wanted to try to move the needle some more on the Unitary Executive Principle and told SM to defend the issue at the SCOTUS in Collins, to settle would have mooted the issue and the only way for the SCOTUS to rule is to have a live case and controversy.
But SM, if he does nothing will have aided and abedded the government in one of the largest Governmental Heists in History and if the nws stands, it will forever thwart the US Governments efforts to deal effectively with future bailouts and Financial Calamities!
Yeah, disappointed they didn't get more aggressive about ending the nws earlier (how could SM possibly see it as a proper exercise of governmental power when HERA's mandate is to get the twins on their feet again!)
What do you think about the idea that DJT wanted to move the needle some more on the Unitary Executive Principle and therefore defended the nws?
Seems like the article implies, if MC follows through with the release, he will be fired, kinda of an implied threat to prevent him from following HERA, THE LAW!
"Maria, WE NEED TO GET THE GSES OUT OF GOVERNMENTAL CONTROL!"
"Something non-reversible" could be a Condition Subsequent Clause in any 4th Amendment signed by MC and SM! The Joe Light piece seemed to imply that if MC doesn't sign off, JB will let him keep his job, BUT IT'S LIKELY MC WANTS A 4TH AMENDMENT THAT LAYS THE BLUEPRINT FOR THE EXIT FROM CONSERVATORSHIP!
Well at least he can tell his friends that he was thrown under the bus in furtherance of moving the needle on the coveted Unitary Executive Principle!
We will really be able to sink our teeth into the earnings WHEN UNCLE SUG GIVES US OUR PROPERTY BACK!
Prisoners usually receive their personal property BACK ONCE THEY'VE SERVED THEIR IMPRISONMENT!
Charlie on Fox Biz talking about the twins!
Maybe he will throw in the 11,000 documents as well, make for good reading during these times, isn't it a government by the people for the people?
4Q20 Earnings are going to be juicy!
It would take 2 or 3 pages to do a 4th Amendment, let's get it done!