Replies to post #461539 on Mr Cooper Group Inc fka COOP

[JusticeWillWin]

I want to add one thing: the $40.2 bln. is EXACTLY the sum of the left "Total Liabilities" ($13,835,062,288) and the left "Net Assets" ($26,430,109,191) less the "Subtotal - Administrative Liabilities" ($50,458,840)

   Total Liabilities                  $ 13,835,062,288  
 + Net Assets                         $ 26,430,109,191  
 - Administrative Liabilities         $     50,458,840 
 ============================================= 
 = Asset-related equity adjustments   $ 40,214,712,639

I know for a valid balance sheet it is necessary that:

Total Assets = Total Liabilities + (Shareholder's) Equity

which is eqaual to

Total Assets = Total Liabilities + Net Assets

(to match the items above)

For the receivership assets you have to add the $1.888 bln. premium.

Total Assets = Total Liabilities + Net Assets + Premium

So, they do the calculation backwards IMO.

BECAUSE the receivership has only 1.9 bln. in assets (today 2.7) they have to subtract "something" from the above equation to keep it valid

This "something" is our "Asset-related equity adjustment"

Total Assets = Total Liabilities + Net Assets + Premium - Asset-related equity adjustments

As we have seen above, those consist of the "Total Liabilities" and the "Net Assets" so the term equates to

Total Assets = Total Liabilities + Net Assets + Premium - Total Liabilities - Net Assets + Administrative Liabilities

or simplified

Total Assets = Premium + Administrative Liabilities

$1,938,458,840 = $1,888,000,000 + $50,458,840

(There are "missing" a few dollars. If you add the $4,197,164 Income / Loss of the Liquidation Since Inception line to the left side (Total Assets) then you have exactly the $1,942,656,004 from the inception balance sheet.)

But nevertheless I cannot understand WHY they do the calculation the way they do it.

If you compare the right column "Inception Balance" with the left column "Current Balance" you can see that for example the "Liabilities at Inception - Unproven" were reduced from $272.3 bln. on the right side to $13.7 bln. on the left side, meaning JPM assumed all except the $13.8 bln. (WMB bonds)

But if you look at the "Net Assets / (Deficit) At Inception" you can see that the $26,4 bln. were not reduced by one dollar!!!

What does that mean? Why do they carry the $26.4 bln. on the receivership balance (left side) just to reduce them later by the asset-related equity adjustments. The liabilities were reduced as expected and only the $13.7 bln. are carried on the receivership balance because JPMC assumed the biggest part.

This means, the "adjustment" is not a small on, but a 100% adjustment, reducing all the equity!!!


Any further ideas?