Continued from the previous post...
In September 2008, the FHFA, as conservator of these GSEs, entered into a deal with the United States Treasury to organize a bailout of these still solvent entities.
***Let's look at the above clearly...so the gov't assgins the FHFA, the the FHFA enters into an agreement with the treasury...
TALK ABOUT SELF DEALING - IN THE FINANCIAL WORLD THIS WILL GET YOUR FIRED FATSER THAN YOU CAN BLINK...wow 1st class corruption.
Here it is - self dealing:
First, FHFA issued to the Treasury a new 10 percent perpetual senior preferred stock for which Fannie and Freddie over time received in exchange about $187 billion in fresh capital. As part of the deal, the Treasury received warrants to purchase 79.9 percent of the common stock at a nominal price of $0.00001, effectively wiping out most of its value. The now junior preferred stock remained on the books but had sharply diminished value.
***Of course - self dealing - self benefit...
Clearly, the net benefits from this initial bailout were set by the Treasury, which exercised its power to buy into these GSEs at prices highly favorable to itself.
At no point did the former directors of either GSE have any say on the terms of the deal. ***SERIOUSLY???
Essentially, the United States was on both sides of the transaction in a clear breach of the standard rule that all self-dealing transactions must be scrutinized to determine whether the shareholders' conservator provide them with fair value.
***So looking at the above, would any human being be able to argue that this is not theft in day light***???
The Dubious 2012 Amendments to the 2008 Agreement Fast forward now to August 2012, at the start of the housing market recovery. At this time, FHFA and the Treasury entered into their Third Amendment***PARTNERS IN CRIME... to the 2008 Agreement which provided that "all positive net income each quarter will be swept to the Treasury." It is important to understand the unprecedented magnitude of this Amendment.
At the time, Fannie and Freddie had returned to profitability and were thus able to pay both the interest on the Treasury's senior preferred stock and return some of the $187 billion that the Treasury had contributed to the both GSEs. This Third Amendment in effect stripped all the cash out of these companies and gave it to the United States as a "dividend" on its investment, with no reduction in principal.
How on earth can any living human being accept this?...this was not an interst only loan...PERIOD!!! Re: With no reduction to principle???Really?
Any sensible person would instantly realize that the unilateral variation in terms was not done to aid the private shareholders of Fannie and Freddie, but was intended to transfer all their wealth to the government whose crude contractual "amendment" violates the first principle of contract law: A and B may never enter into a contract that binds C without C's consent. What is truly amazing is the spin that Mr. Hensarling puts on this so-called Amendment in a document described blandly as PATH Act Questions & Answers:
***At this point I am so sick to my stomach, angry to say the least...the people who we appoint are the same people that are screwing us****
Some are arguing that Fannie and Freddie have begun paying a financial benefit to taxpayers. While it's true that both companies had positive net income for the last three quarters of 2012 and have made $65.2 billion in dividend payments, these statistics don't give a complete picture of their financial situation. It is important to note that under the GSEs' contact with the federal government, these dividend payments cannot be used to offset prior Treasury draw, so that regardless of how much is paid out in dividends, the GSEs still owe taxpayers $187 billion in bailout funds borrowed And since their contracts with the federal government state that all positive net income each quarter will be swept into the Treasury as a dividend payment, in their current state the GSEs will never be able to repay that debt to the taxpayers.
Re this last point: in their current state the GSEs will never be able to repay that debt to the taxpayers
where is justice? is this what we stand for in the UNITED STATES OF AMERICA???IS THIS WHAT WE HAVE BECOME...did I miss something...is this what we have been all along?
Shame...Tomorrow I am writting a stongly worded letter to the president of the united stats who's administrations has asked me personally to work under their administration. OH yes he is going to hear it.
Continued on the next post..
AI
