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Re: stockanalyze post# 765362

Monday, 08/28/2023 2:57:41 AM

Monday, August 28, 2023 2:57:41 AM

Post# of 796433
FHFA suspended the capital classifications during Conservatorship.
Related to the declaration of:
-Adequately Capitalized
-Undercapitalized
-Significantly Undercapitalized
-Critically Undercapitalized.
They aren't "regulatory guidelines" as the controversial Timothy Howard claims in your post. They are statutory capital classifications.
This is the FHFA's statement:

The objective of the FHFA was to avoid a declaration of Critically Undercapitalized with the 3Q2008 earnings reports through today, with an adjusted $401B capital shortfall over Minimum (Leverage) Capital requirement (FHFA keeps refusing to publish the Critical Capital level, estimated at $23B together in 2023)

On the other hand, it also avoids the conflict (and liabilities) of having had to declare FnF Adequately Capitalized with the 3Q2021 results, under the Separate Account plan according to the law. Which could make this statement from FHFA on day one of conservatorship, a telltale sign of the intention to carry out a Separate Acct plan with the necessary absence of the capital classifications, and with the bailout in 1989 of the FHLBanks in DeMarco's and Sandra Thompson's rear mirror. A bailout where the UST lost $30B in its investment in RefCORP bonds because these officials thought that, with the quarterly allowance, the FHLBanks only had to pay interests, not the principal of the obligation. A failed bailout that enriched Wall Street with numerous Public-Private partnerships.
The end of the paragraph, with "capital requirements aren't binding", has more to do with what has already been explained about "may" in the conservator's power and "best interests of FHFA" in its Incidental Power, that allows the FHFA to increase the risks in FnF or activities that increase the losses, like building the CSP, etc.
It doesn't affect its statutory mission of the rehabilitation of FnF through building capital (soundness) with "put FnF in a sound and solvent condition".
It didn't affect the publication of the statutory capital requirements in their earnings reports with the S.E.C. every quarter since day one through today. However, the Critical Capital level has been missing all along and also today in the ERCF tables, which is a felony. The Risk-Based Capital requirement formulaic was struck by HERA, so it couldn't have been published until the new Capital rule in February 16th, 2021, remember that it was withheld on purpose through regulation until January 1st, 2022, so that representative French Hill asked ST in July 2022 about the FHFA 2021 Report to Congress, with the new Capital Rule absent. The FHFA 2022 Report to Congress? This time, Rep. Hill and McHenry scheduled the hearing with ST's testimony two weeks before the scheduled release of the report.
It didn't affect the FHEFSSA section Capital Classifications, where it's explained the definitions of each capital classification, useful to learn that the Minimum (Leverage) Capital requirement is met with Core Capital, and the Risk-Based Capital is met with Total Capital, which slams nowadays the scammers that claim that it's met with their Net Worth that they call Capital Reserve (SPSPA's amendment by Calabria-Mnuchin, 12 days before Sec. Yellen was sworn in: "Capital Reserve End Date"), notwithstanding that the these definitions are seen on the ERCF tables nowadays.
Then, with the ERCF tables absent from the FHFA Report to Congress, they can throw numbers at the wall. For example, the exchange ST- representative Blaine: "$100B vs $300B", ignoring that $100B was their Net Worth, not the regulatory capital. And the $300B was the official capital needs or capital shortfall over the capital requirement at the time ($297B, the official number in their ERCF tables), not the capital requirement. Typical: create confusion. Is it HERA or the FHEFSSA?... On bitcoin. Is it a commodity or a security?
Also known as playing the fool.