Replies to post #794336 on Fannie Mae-No Politics (FNMA)

[Wise Man]

BOTTOM LINE. In order to see "Changes in Equity" now we have to look at the Income Statements, not the actual Equity (Balance Sheet). Huh?


SPS LP is stuck to $73B every quarter. Yet, the actual SPS LP outstanding stands at $123B as of March 31, including the $2,741 million scheduled to be increased on June 30th.
$50B SPS LP is missing, equal to the $50B Net Worth.

[Rodney5]

the SPS LP increased for free is missing, because it carries an offset with reduction of Retained Earnings account, and shows that FnF are not building regulatory capital but SPS LP)

THAT’S EXACTLY WHAT EVERYONE HAS BEEN SAYING ON THIS BOARD FOR YEARS mr wise man and you think you’re the only person that gets it with your sheeeet emoji’s !

[Wise Man]

BOOM. Dividends are recorded as Changes in Equity.
As per the definition of this financial concept: a distribution of Earnings and Retained Earnings is Common Equity for the CET1 that has to meet the capital requirements.
They aren't interest payments (expenses result of operations) without restrictions.
Freddie Mac during the NWS dividend.


This is why there are Payout ratios (percentage of Net Income that can be paid out) that limit the amount that can be distributed to the Equity holders as dividend, that is an addition to the overall restriction when a financial company is undercapitalized.
Capital Rule ERCF:


We are talking about dividend payments that have been paid out when there is Accumulated Deficit Retained Earnings account, evidence in itself of Separate Account, as you can't distribute what you don't have, which is different from using this account to charge the annual losses, when it can have a negative balance (deficit).
They were assessments sent to UST in the form of capital distributions. No actual dividend was ever paid by any stretch of the imagination.
FHFA's Wall Street law firm: "Dividend obligation" in an attempt to turn dividends into interest payments. That doesn't exist in this world.
Restricted and unavailable funds for distribution.
Cumulative dividend as per the original rate similar to UST (0.5% spread) in the Charter Act: it's netted out with the interests on the $152B owed to FnF.