Replies to post #630792 on Mr Cooper Group Inc fka COOP

[ItsMyOption]

LuckyPanda, I have not seen anything written about Dr. Ancharya calculation with 86B posted. This is his one Objection but without that 86 billion calculation. http://www.kccllc.net/documents/0812229/0812229101115000000000021.pdf

Note: I just emailed Dr. Ancharya using two of his email address and they both got kicked back. So my hope is he is still around with us as we are all getting older as we wait for our $$$$$

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[ItsMyOption]

LuckyPanda, This could be a good review of some of Dr. Ancharya writting:

The good Doctor, Sankarshan Acharya, Associate Professor of Finance
University of Illinois at Chicago penned the below paper on the Economic Inefficiency of Short-Selling......especially relevant to WMI and WMB is example 2 on pages 9-11...... However, one should read the whole thing for his perspective on the impacts to society.

http://www.pro-prosperity.com/Research/Sub-Optimality%20of%20Short%20Selling.pdf

Example 2 (JPM-WM): JP Morgan and Chase conceives of a plan (Project West) to acquire a successful, well-capitalized and valuable bank, Washington Mutual Bank (which is a subsidiary of Washington Mutual Incorporated, a bank holding company), to expand its operations to western parts of the United States. At this time, mutual funds passively hold 90% of 1.7 billion common shares of WMI. JPM then floats its interest in buying WMI. It does so to facilitate short selling of 1.5 billion shares of WMI common stock. JPM creates these shares synthetically or by pulling out of thin air. The Clearing House controlled by JPM does not question JPM on non-delivery of shares sold short. JPM sells these shares to the passive mutual funds, pension plans and individual investors. No buyer suspects anything when JPM has expressed interest in WMI. JPM simultaneously buys 500 million WMI shares through some of its subsidiaries. JPM has to buy some and sell more to entice other buyers through talks of buying WMI. At the end of the trading, JPM holds 1.5 billion shares short in its private trading-inventory account and 500 million shares long in its investment account. JPM files its long positions with the SEC and wins confidence of all other mutual fund holders. JPM has helped create a rule to not let regulatory agencies inspect its trading-inventory account held in its market making subsidiary. JPM has successfully justified and lobbied for keeping such accounts ultra secret. At the time of constitution of the BOD and appointment of key personnel like the Finance Director of WMI, JPM now dangles its long positions of 500 million shares to project its weight as a benevolent large shareholder of WMI seeking to place its people in a company planned to be acquired.
JPM then obtains all important data to make a low-ball offer of $8 per share to buy WMI. But the WMI CEO refuses. Then JPM appointed WMI BOD fires the CEO with a golden parachute to replace him with a pliant CEO to serve JPM’s interest. JPM then uses its long and short positions to drive down the price of JPM stock to $1 per share. Cohorts of JPM like Goldman Sachs recommend everyone to sell WMI short. JPM simultaneously compels the public rating agencies to downgrade WMI bonds and stocks. The rating agencies have a model to downgrade securities based on dropping stock price. The rating agencies thus follow their model. JPM merely advises the rating agencies to perform their fiduciary duty of downgrading securities of a company with falling stock prices.
The rating downgrades make sure that WMI cannot raise capital on a competitive basis and Federal Reserve has not guaranteed existence of WMI, which is not a member of the clearing house. Then rumors circulate in the grapevine about the FDIC contemplating seizure of WMI. This leads to some WMB depositors withdrawing their funds. The FDIC, Federal Reserve and Treasury are now scared. So is Congress. They are so scared that they have to now ask JPM to takeover WMB’s assets and deposits by zeroing all other security holders (WMI equity and debt and WMB bondholders).
Private property is thus seized unconstitutionally and given away to JPM for pittance. JPM CEO, after 1.5 years of the seizure, brags before his shareholders about the immense value of WMI assets it brought for them: about $18 billion in annualized profits which amount to a present value of assets of $360 billion, by using even a very high cost of capital of debt (5%) employed in the acquisition, and by assuming no growth. Washington Mutual Bank was not in default at the time of seizure. The WMB bonds were fully protected with the scheduled coupon payments duly paid on time. WMB bonds would be protected fully even if WMB were not seized and stayed with its previous parent company. Washington Mutual Incorporated (the parent holding company of WMB) was not in default at the time of seizure. Even now, in the bankruptcy court, WMI is highly solvent with all WMI bonds trading in the market above par. That the WMI BOD has acted at the behest of JPM is obvious. On bankruptcy, the WMI BOD has appointed a Debtor’s attorney to propose a plan of reorganization by giving away significant assets of the bankrupt WMI estate to JPM to void any legitimate claim of equity in the estate.
So, JPM has accomplished its Project West plan, unconstitutionally, to grow bigger to dictate sharper terms to the Congress and Regulators, more vociferously than ever before.
WMB was solvent with much more than the minimum required capital, as per the testimony of its primary regulator, the OTS, signed by the FDIC. The FDIC now faces a legal suit from Washington Mutual Bondholders for about $20 billion. These bondholders are too taxpayers. Thousands of families, whose security holdings have been zeroed out due to the seizure,
have lost their wherewithal to live or retire. Some of them have committed suicide.
Some have faced painful divorce. They too are the taxpayers. Should their possessions have been unconstitutionally seized? Such unconstitutional seizure and pervasive tragedy leading to depression is possible due to short selling within the current system of money and finance. Short selling creates shares to increase its supply (beyond the legally approved outstanding under the company law) to depress the price and rob the true owners of a company. Short selling is unconstitutional and illegal, yet it is permitted by the Security and Exchange Commission.