i also see on th website, a comment from bryndon fisher that he is getting our company back. what is he up to? i thought he lost. kudos to those who cannot let this heist go unchecked.
" As long as interest rates stay high, this net income will continue to boost Fannie’s profits, and grow as its shareholders equity grows."
110 Bn X 5% = $5.5 bn in more earnings 200 Bn X 5% = $10 bn in more earnings
This is why the SPS needs to be voided either at inception or in the future. This will all accrue to common shareholders. As the song goes - "Time is on my side" as long as the SPS gets voided at some point - hopefully at inception and the SPS is limited to the initial $ 2 bn.
Timothy Howard is mixing up their Loan Loss Reserve or Allowance for Loan Losses ($8B in the single-family business. $10B in total), with their Capital ratios. ALLL is for EXPECTED credit losses based on the management's assessments about the future: housing prices, etc. (CECL accounting standard). The assets are written down, assuming that the loss already occurred (watch the line item ALLL reducing the Assets of the Balance Sheet) A Capital ratio is for UNEXPECTED LOSSES. Risk-Based capital requirement of $105B. He says it's $184B because he includes the Capital Buffer of $79B, which isn't a capital requirement. It's the amount above it to avoid breaking this treshold and become Undercapitalized fast. A Capital Buffer is only useful to determine the Payout ratio (Table 8). They are two Reserves, although for the Total Capital that is what has to meet this Risk-Based Capital requirement, it's allowed to include the ALLL amount. Total Capital = Core Capital + ALLL. The Capital ratio is an International Standard, Basel framework. It isn't Calabria's or FHFA's capital requirement. He is referring to Total Capital = 8% of Risk-Weighted Assets ($105B). A Risk-Based Capital requirement. But again, why is he concealing the other capital requirement: the Minimum Leverage Capital requirement (not based on risk), which is higher: $114B and it's met only with Core Capital. So, it's even worse because you can't count on the $10B ALLL already set aside. Wait! Because they are 3 capital requirements, not 2. The FHFA is concealing the FHEFSSA's Critical Capital level (0.25% of the MBS Trusts + 1.25% of the on-balance sheet assets - Retained Portfolio-) estimated at $13B, that should have appeared in the ERCF table posted above. HERA allowed the FHFA to change the 2 capital requirements that show up, but nothing about the 3rd one, which remains as is. This is because the Core Capital of $-52B (ERCF table) is far lower than the Critical Capital level. Becoming Critically Undercapitalized triggers the Conservatorship, putting into question the whole Conservatorship for the rehabilitation of FnF. The Core Capital must be adjusted for the offset with the $69B gifted SPS since December 2017. So, $-121B Core Capital. Not meeting a Critical Capital level, is difficult to twist with tricks and a blow to the FHFA, UST and the Congress. This is why it's hidden. Remember that the former FNMA CFO is involved in this attempt of assault on the ownership of FnF (common stock) through a Conservatorship years before it started, because he repurchased common stocks worth $7.4B that now appear on the Balance Sheet as a contra-equity account (negative balance in the Treasury Stock account), but it also reduces the par value of the common stock when calculating the Core Capital, and a Conservatorship is triggered upon Critically Underapitalized enterprises ($11B Treasury Stock including Freddie Mac). Therefore, likely this Core Capital would have avoided the Conservatoship hadn't Timothy Howard made FnF to invest in common stock (not part of their mission as set forth in their congressional-charter: Purposes) with the objective to boost the EPS and meet his EPS target bonus (buybacks aren't recorded in shares outstanding for the EPS), along with accounting fraud according to the S.E.C. and the FHFA reports at the time, when he was abruptly expelled from the company, that had to restate 4 years of Financial Statements and pay a fine. $27 million in ill-gotten money that he was later allowed to keep by the S.E.C., in what looks like an upfront payment for his participation nowadays with his blog in the current plan to rip off the shareholders, covering up the key statutory provisions and financial concepts, that leave FnF heavily damaged. Let alone his amicus brief in the SCOTUS: "The SPS are non-repayable securities". A big lie.
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