Fannie Mae-No Politics (FNMA)

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David Paul Sims' Profile


David P. Sims

Manager - Financial Reporting & Analysis at Berkshire Hathaway

Richmond, Virginia Area
Accounting

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David P. Sims's Overview

Current

Manager - Financial Reporting & Analysis at Berkshire Hathaway

Past

Senior Accountant, Financial Reporting at McKesson
PPM Senior Financial Analyst, Corporate Financial Planning and Analysis at MeadWestvaco
Senior Financial Analyst at Timmons Group

see all
Education

James Madison University
The College of William and Mary
PHHS

Connections

425 connections

David P. Sims' Experience
Manager - Financial Reporting & Analysis
Berkshire Hathaway

Public Company; 10,001+ employees; BRK.A; Insurance industry

November 2013 – Present (5 months) Richmond, Virginia Area

BHMedia is a division of Berkshire Hathaway, and owner of multiple media properties in the United States.
Senior Accountant, Financial Reporting
McKesson

Public Company; 10,001+ employees; MCK; Hospital & Health Care industry

July 2012 – November 2013 (1 year 5 months) Richmond, Virginia Area

• Pulled data from JD Edwards tables in Oracle using Structured Query Language (SQL)
• Performed Sarbanes Oxley (SOX) self-assessment testing.
• Performed consolidated financial reporting in Oracle Hyperion Financial Management (HFM).
• Utilized Sharepoint for delivering reporting schedules to Corporate.
• Performed on-site inventory observations in Texas and New Jersey.
• Reconciled Software Capitalization and Miscellaneous Accruals accounts.
• Trained new employees in Essbase reporting.
PPM Senior Financial Analyst, Corporate Financial Planning and Analysis
MeadWestvaco

Public Company; 10,001+ employees; MWV; Packaging and Containers industry

June 2010 – July 2012 (2 years 2 months) Richmond, Virginia Area

Planning and Performance Management (PPM) is a management reporting tool that extracts data from more than 40 ERP source systems worldwide and creates segmented financial statements based on a custom methodology.

• Managed datafeeds for multiple source systems, including PECAS, Quickbooks, BAAN, JDE Edwards, Cabbell, FAT2000, and Oracle ERP.

• Worked with local controllers to direct transactions to specific end markets using the PPM methodology (product and customer mapping).

• Managed ETL (Extract, Transform, and Load) enhancements on invoicing, material, and general ledger extracts from the source systems.

• Managed SAP BusinessObjects Profitability and Cost Management (PCM) software and SG&A and OIE Segment Allocations.

• Lead the production runs for the month-end close and history reloads for six months.
- Initiated ETL processing
- Distributed audit reports
- Initiated global processing
- Initiated a load of data from the Oracle repository database to the SAP BW reporting tool
- Managed master data loads
- Worked with team members, technical support, and local controllers, as needed

• Wrote SQL queries to pull data from Oracle databases using Oracle SQL Developer.

• Lead the implementation of and enhancement project for PCM to drive Other Income and Expense amounts to end markets through an allocation model.

• Reconciled PPM to the official audited/reviewed financials created by the Controllers Department
Senior Financial Analyst
Timmons Group

Privately Held; 201-500 employees; Civil Engineering industry

January 2008 – April 2010 (2 years 4 months)

• Administered Deltek Vision Enterprise Resource Planning (ERP) system and database.

• Developed and distributed a reporting package to management specifications.

• Created a fully unique reporting system that integrated into Vision according to each person’s needs for 250 employees.

• Trained over 100 project managers and administrative assistants in how to use Vision and run reports.

• Set up workflows for processes within Vision.

• Managed reports in SQL Server Reporting Services.

• Utilized SQL Server Management Studio Express to write custom queries, create stored procedures and database triggers and to manipulate data.

• Used Visual Studio 2005 with Business Intelligence Development Studio (BIDS) to create the custom reports.

• Integrated employee intranet with SQL server to create an employee directory in PHP.

• Managed balance sheet accounts and the month-end general ledger process.

• Tied out significant balance sheet accounts to supporting statements and calculations.

• Posted accrual journal entries.

• Investigated financial statement variances versus budget on a monthly and yearly basis.

• Created budget templates and obtained final budget figures from operating groups. Input these figures into the accounting system.

• Filed property tax returns and business licenses.
Senior Associate
KPMG

Partnership; 10,001+ employees; Accounting industry

August 2005 – December 2007 (2 years 5 months)

• Acted as lead senior associate on the quarterly reviews and annual audit of a public client with sales less than $200 million. This included supervision of staff on the audit engagements.

• Tied out significant account balances in press releases, 10-Q, and 10-K filings.

• Prepared the financial statements in accordance with generally accepted accounting principles (GAAP) for a small non-public client’s 401k plan.

• Researched technical accounting guidance related to the following:
..... FASB Statement No. 143 and FASB Interpretation 47
..... FASB Statement No. 13
..... FASB Statement No. 142 and FASB Statement No. 144
..... EITF 02-16

• Audited account reconciliations and schedules in the following audit areas: cash, accounts receivable, investments, fixed assets, intangibles, accounts payable, debt, stockholders’ equity, earnings per share and others.

• Audited FAS 123R schedules for stock-based compensation, which included the Black-Scholes calculations and immaterial amounts of compensation expense.

• Managed a pending list and communicated with accounting management to obtain client-prepared schedules during quarterly reviews and year-end audits.

• Prepared a listing of non-GAAP accounting policies, such as capitalization and accrual thresholds, at several clients. The effect of these policies was quantified to determine whether they were material to the financial statements.

• Imported electronic data into KPMG’s monetary unit sampling tool to select samples during multiple engagements.

• Performed inventory count observations at 11 companies in 25 locations across Virginia and Tennessee. These observations included a broad range of inventory types, such as semiconductors, cell phones, butter, grain, diesel fuel, and others.
Associate
KPMG Audit

Partnership; 10,001+ employees; Accounting industry

August 2005 – July 2007 (2 years)

See above description.
Sales Assistant
Raymond James Financial Services

Public Company; 10,001+ employees; RJF; Financial Services industry

March 2004 – January 2005 (11 months)

• Created and maintained 12 databases including thousands of contacts and billions of dollars in assets (ie: Tobacco Farm Subsidies from Environmental Working Group) by gleaning information from the Web and integrating IT sources from across the company.

• Wrote a newsletter and sent it out to 900 mortgage clients and supervised a team of interns who called on these clients.

• Visualized, planned, advertised, and presented a college savings plan seminar.

• Set 41 appointments through cold calling, which resulted in 14 new clients.
David P. Sims' Publications

Impac Mortgage, A Hidden Value?
Seeking Alpha
July 23, 2013
Authors: David P. Sims

Impac Preferred Stock trades for less than one dollar and has a liquidation value of $25 per share. The common stock trades for $10 and has no value in liquidation. Current equity book value would cover 57% of the preferred stock's value in bankruptcy, if book value reflects a fair value of the assets. Managment is paying 1/4 of operating earnings as salaries to the top two execs.
Trading Covered Calls In Large Equity ETFs
Seeking Alpha
July 12, 2012
Authors: David P. Sims

Covered Calls are a simple options trading strategy that turns market volatility into cash by selling an investor's right to stock appreciation. Speculators buy these rights for a premium. The downside risk is the same as owning stock, or exchange traded funds, in this case.
Trading First Solar Covered Calls
Seeking Alpha
July 3, 2012
Authors: David P. Sims

Solar power companies have higher than average volatility in their stock shares, which is partly due to their concentration in one energy specialty that is affected by macro forces in the energy sector. Frequent ups and downs create premiums in the options that trade around the stocks. A covered call play has the same downside risk as owning the stock, while taking advantage of the volatility.
What To Do With A Profitable Fannie And Freddie
Seeking Alpha
June 29, 2012
Authors: David P. Sims

The U.S. Treasury in 2008 was led by a former Goldman Sachs alum, Hank Paulson. He told his hedge fund buddies that he was going to wipe Fannie Mae and Freddie Mac off the face of the earth, while knowing that they had short positions in the stock. At the same time, he told the public that they were adequately capitalized.
Housing Improvement And Repurchase Clarity Good For Banks
Seeking Alpha
June 28, 2012
Authors: David P. Sims

In the summer of 2012, economic data started to point to a rebound in the housing market. This was partly due to cheap money provided by the Federal Reserve and a significant drop in homes available for sale.
Fannie And Freddie Reform Plan Modeled After AIG
Seeking Alpha
June 25, 2012
Authors: David P. Sims

Former Treasury official Jim Millstein outlines his plan for restructuring the mortgage market and making taxpayers whole on their investment in Fannie Mae and Freddie Mac.
Utilize Dividend Collars With Mortgage REITs
Seeking Alpha
December 4, 2012
Authors: David P. Sims

Properly hedging an mREIT position may allow an investor to reap large dividends while eliminating risk, if properly executed.

David P. Sims' Skills & Expertise

SSRS
SQL
Oracle SQL
Financial Analysis
SQL Server
Financial Reporting
Financial Accounting
SAP BW
Oracle
Value Investing
Financial Markets
Financial Statements
Accounting
General Ledger
Auditing
Account Reconciliation
Hyperion Enterprise
Analysis
GAAP
Finance

View All (22) Skills
David P. Sims' Summary

SKILLS PROFILE
• CPA since November 2006 and eight years accounting experience, including public and private accounting
• Self-taught IT and SQL experience
• Fast-learner with strong analytical skills

TRAINING
• Deltek Power User Group Meeting, October 2009, Denver, CO
• Deltek Insight Conference, May 2009, Orlando, FL
• Deltek Large Firm User Group Meeting, October 2008, Kansas City, MO
• Deltek Power User Group Meeting, October 2008, Kansas City, MO
• Deltek Vision Technical Administrator Training, September 2008, Boston, MA
• Deltek Insight Conference, May 2008, Nashville, TN
• KPMG, Basic Monetary Unit Sampling, September 2007 and 2006, Richmond, VA
• KPMG, In Charge Associate, August 2007, Orlando, FL
• KPMG, Employee Benefit Plans, May 2007 and 2006, Richmond VA
• KPMG, Advanced Auditing for Associates, June 2006, Colorado Springs, CO
• KPMG, Audit Fundamentals, August 2005, Orlando, FL

Specialties: Financial Statement Analysis and Reporting,

SQL Server Reporting Services
David P. Sims' Education
James Madison University
MSA, Accounting

2003 – 2005

The College of William and Mary
BBA, Finance

1999 – 2002

Activities and Societies: Kappa Alpha Order
PHHS

1994 – 1998

http://www.linkedin.com/in/davidpaulsims

Fannie And Freddie Poised To Break Out



David Sims
Long/short equity, special situations, event-driven, activist investor
Profile| Send Message| Follow (169)


Mar. 19, 2014 11:55 AM ET | Includes: FMCC, FNMA

Disclosure: I am long FNMA, FMCC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Summary

Fannie Mae and Freddie Mac are poised to break out.
The GSEs helped millions of households avoid foreclosure.
Retaining Earnings is the best protection for taxpayers.

Systemic Importance

In 2008, the United States was on the verge of stepping over and into a financial precipice so deep that the impacts on the world economy would have been devastating. This is something that has become common knowledge. Less known and somewhat unbelievable was the fact that some leaders on the international stage were rooting for the calamity to strike and strike hard. Hank Paulson, then Treasury Secretary in 2008, wrote about an encounter with a Chinese diplomat at the 2008 Beijing Olympics. He said that he was informed of a plot by the Russians to dump massive quantities of U.S.-backed bonds on the market. This action would have started the chain reaction that lead to the 2008 financial crisis. These bonds were implicitly guaranteed through Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC).

Through a series of laws passed by Congress, the implicit backing of the GSE mortgage bonds became explicit. A housing bubble burst and many banks failed. Congress passed the TARP program. Weakness in the housing market prompted the creation of the Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP).

HAMP and HARP Figures

In 2008, 7.5 million families were underwater on their homes. By 2009, this number rose to 10.7 million. Home values were quickly dropping. Foreclosures were rising. The expected losses grew and grew, along with unemployment.

The Obama Administration's HAMP and HARP programs were created in 2009 as a means to stop the crisis. Fannie Mae and Freddie Mac were the prime candidates to implement this new public policy. By November 2013, there were 432,256 permanent HAMP modifications and through the end of 2013, 3.06 million homes refinanced through HARP. According to Fannie Mae, every refinance saved homeowners $223 per month on their mortgage payment. The annualized savings on these refinanced loans is approximately $8.2 billion. The effect of modifying 432,256 mortgages through HAMP is more difficult to calculate, however consider the fact that the GSEs had been increasing their loss reserves for these, in the event they went into foreclosure. Those reserves are reversing now, which is boosting profitability and making them the two most profitable companies in the world.

Acting as public utilities, Fannie Mae and Freddie Mac gave up 70 years of profitability to the crisis. They increased their market share and did what no other institution could do. Without their efforts the U.S. economy would have been much worse off.

Importance of Housing in the Domestic Economy

Housing's impact on the domestic economy cannot be downplayed. Roughly 18% of GDP can be directly attributed to the housing market. It is one of the few industries that can exist solely through domestic building and services. You cannot outsource or import residential construction, home improvement, real estate brokerage, or lending services.

Additionally, household debt totals $11.52 trillion in the United States. Mortgage indebtedness stands at $8.05 trillion and Fannie Mae and Freddie Mac have a combined $5.23 trillion in housing-related assets on their balance sheets. If you could pick any two institutions with the same level importance to the economy, it would be a difficult task. Of the $20 trillion or more of securities traded on the NYSE and NASDAQ, none are guaranteed by the exchanges or the Federal Government. But GSE Mortgage Backed Securities count with a special risk-weighting under Basel III standards, meaning the world's largest banks will load up on them. They are the bedrock of the world's banking balance sheets along with Treasuries.

But what value does this bring for the common stock of the GSEs?

Johnson-Crapo is More of the Same

Since last week's unveiling of the Johnson-Crapo Bill, shareholders have felt jittery with good reason. The Center for Individual Freedom puts it best:

...the proposal continues to disregard investors' rights - the community banks, pension funds and individuals that supported Fannie and Freddie, before, during and after the bailout. Under Crapo-Johnson, those investors remain left out in the cold, their savings and retirement in limbo. Meanwhile, taxpayers would remain on the hook because the full faith and credit of the U.S. government would backstop the newly-created entity under Crapo-Johnson.

Luckily, the bill appears to have as little as a 10% to 15% chance of passing and some have gone as far as to call it idiotic.

End the Net Worth Sweep

In accordance with all of these guarantees, intertwined interests, and domestic policy concerns are the quasi-private missions of the entities to pursue a profit. Profits and retained earnings are the mechanism for preserving the system. The system exists to build capital and improve wealth, the noblest of all American principles. In tough times, when losses begin to mount, retained earnings are the lifeblood that keeps a business running. So, this is why the current situation with a 100% sweep of the GSE's net worth is a shame. The United States is essentially riding the wave of a housing rebound with a naked guarantee backed by nothing but the goodwill of taxpayers. The GSEs should be allowed to retain capital. This will insulate taxpayers from the next crisis.

It's a known fact among those working in the halls of corporate America and gliding around the halls of Congress that the United States is the global leader in business. Somehow this belief also corresponds to a confidence in the global system. The fallacy of the thinking is the underlying belief that the global system would fail if the United States didn't exist as a leader in this realm. That flawed thinking has put leaders in a position to extend their interests overseas without considering the macro risks that over-extension can create.

In our global economy, we never know how long U.S. goodwill will last. You would be challenged to find one single geopolitical trend that has lasted more than a few hundred years. The current mantra of being backed by the full faith and credit of the United States of America is one of our defining exports. That too extends into our legal system, which means that the current state of Fannie and Freddie is a reflection on the entire country's status of being the dominant business and geopolitical power of the world.

A shareholder's right includes the right to own a private company, direct its board of directors, and to retain and reinvest capital. These are basic fundamentals of our system that we tout as examples of democracy in action. Denying the intent of the system is the same as handing it over to our enemies.

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