That is my understanding. What is interesting is that the cbo report — they monetize the face value of the spspa, not the liquidation preference— in their recap and release scenario.
So in theory continued retained earnings does not materially increase how much the government will be cashing in on the spspa becauwe they may use face value and not liquidation preference in recap and release vs receivership.
I am not sure how this works out but noticed this this past month reviewing all the numbers in anticipation of some sort of potential admin action. Diane Yentel was back in the white House yesterday. Affordable housing is an admin priority. There is a path here. I think we will see shortly if they will intend to use it.
Daniel Hornung was promoted and is the Biden housing guy.
Lael Brainard is the main person at the White House leading the national economic council and she is speaking on housing I think end of next week along with Daniel and David Dworkin at a Dworkin event. Dworkin was in the WH the last time Yentel was when they were all talking housing too.
Mnuchin is a bond guy, head of the Fixed-Income Department at Goldman Sachs during many years. Therefore, he is not an Equity guy, with knowledge in enterprise value and stock valuation. And I'm referring to pure Equity, not the JPS that are fixed-income securities, although recorded in Equity. I doubt that he has ever seen a Balance Sheet of a company. He is more interested in the market rates, the Fed and macroeconomics in general. Never try to explain something providing the statement from someone.
And the net worth of the Equity holders at a determined date, is the Net Worth as seen in the Balance Sheets. No more and no less. $118 billion Net Worth that belongs to the UST as holder of $312.5 billion SPS. You are mistaking it for a Debt restructuring, where the debtholders begin to negotiate based on the face value of their securities recorded as Liability.
Who is going to explain to judge Lamberth the Separate Account plan and the fact that the corrupt litigants ate a poison pill? FHFA's DeMarco prohibited the payment of Securities Litigation judgment 12 years before the jury's verdict (July 20, 2011 Final Rule), applying the FHEFSSA's Restriction on Capital Distributions 12 USC §4614(e),... ... at the same time that he amended the FHEFSSA's definition of capital distribution 12 USC §4502(5)(A), to include this case in the number 3... ... and adding the CFR 1237.12 that "supplements" the restriction by statute mentioned before.
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