Administrative solution is a Taking of our stocks at today's fair value, under the Separate Account plan, as it requires an initial refund to FnF of the $125 billion due ($110 billion SPS overpayment plus $15 billion in CRT expenses)
Regardless that later the $125B, plus $58 billion more, returns to the UST as a dividend. €125B already received, the UST puts up $49.5B for a $183.3 billion Taking (market capitalization) necessary for the Taking.
The UST is using our Common Equity to buy us out.
No one with half brain pays attention to the court news, epitome of financial illiteracy (dividends can only be paid out of distributable profit - Retained Earnings account-, besides a capital distribution restricted by law and common sense) and the art of twisting the statutory provisions.
Freddie Mac was $2 billion short of the threshold to become Adequately Capitalized again as of end of September, 2022. So, no big deal. We are entitled to full fair value (no dilution effect on common stocks with the prospect of stock offerings)
Common stock's Book Value valuation:
$FMCC =$118
$FNMA =$92
The JPS's fair value =$50 and $25 par value, after the dividend is resumed: the Table 8 in the Capital Rule was criticized, because their role in the Core Capital is to absorb losses (dividend suspended) to boost Capital in FnF, but not to boost a Capital buffer, as it requires 25% of buffer as a threshold to resume the dividend payments.
Although a Taking requires that the UST syncs up with the Congress, as the Charter needs to be revoked beforehand.
Book Value means that the UST is using the shareholders' money (Common Equity) to buy us out. A $0 cost acquisition.
The JPS are redeemed by FnF, like any other fixed-income security: for instance, their zero-coupon Medium Term Notes (MTNs) redeemable periodically, although they could be part of the Taking first, to participate in some tax-exempt scheme (Taking price deemed personal injury settlement) and then, FnF redeem them for cash right away.
Bullish
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