Wise Man
17 hours ago
A clueless Millstein ignores that FnF are statutory corporations, which means that everything is decided, controlled and required by law, even during Conservatorship that preserves their status.
Clueless about everything that has happened surrounding FnF.
$435B of Capital siphoned off to the UST is pending to be accounted for in their Equity.
The financial rehabilitation doesn't commence 16 years after the Conservatorship began.
First, clueless with a comparison with AIG.
Then, he is another investor asking for more LIHTC tax credits from Congress. Very costly. Besides tax credits for 10 years, there is a 70% subsidy on the entire Housing development.
Their congressional charters only allow them to purchase residential mortgages, not contruction loans. Yet, he insists that the FHFA can allow it, simply, including it in the Capital Rule. And during Conservatorship, just with an agreement FHFA-UST. Another lawyer that can't understand that "restriction" means PROHIBITION.
Also, FnF don't subsidize the mortgage rates.
I was the first person to promote the utilization of FnF to invest in construction loans, but with the adjusted Capital levels under the Separate Account plan that I track every quarter.
September 2021:
Affordable Housing is about construction.
Now, excess Capital. FnF can take on more risk➡️developers. Charter revoked.
Nowadays, in overtime, with the case of redemption of JPS, Freddie Mac would meet full Capital Buffers and Fannie Mae about half of it, plus the case of amortization into Earnings of their Deferred Income (the upfront g-fee is recorded as Debt) in one fell swoop: Freddie Mac would net $32B (after taxes) in the Retained Earnings account, and Fannie Mae, $15B, net, and they can take on more credit risk, like purchases of construction loans, at least Freddie Mac.
But first of all, the Charters have to be revoked.
DaJester
21 hours ago
"Even I would sell some juniors to buy commons if the prices diverged enough. The FNMAS:FNMA ratio hit 4.0 today; if it goes much higher I probably will do just that"
Well, that may be your best argument yet for everyone to root for Preferreds! Let's get to 5:0+ so Kthomp will join us in Common!
"The 6.8% figure depends pretty heavily on if you're buying the most liquid series (FNMAS, FMCKJ), the least liquid (usually the 5-letter ones starting with FMCC), or somewhere in between."
Liquidity doesn't matter much if I don't plan to sell. I'm holding for them to be redeemed, or for dividends to turn back on - those are my expected end-games for preferred. Currently FNMAM, FNMAK, FNMAJ, FMCCO, FMCCT if you care to know. If divvys are resumed, I will be in the 90-100% dividend yield range (vs cost basis) and will hold them for that reason. I will sell Common in stages when/if they reach my targets, and hold some for possible future dividends.
"I suppose that depends on what you define "winning" to be. If the juniors outperform the common you would lose relative to owning only juniors and no commons. But differences of opinion are what make a market."
Winning is relative to what else I could be doing with my money. My goal is to double my money every 4 years (18%), minimum performance expectation is 7 years (10.5%). I'm in my 6th year of accumulating and thus far Common are not meeting my minimum, only up 40% with averaging down, but I have already exceeded 100% return on all my JPS. I treat the GSEs as a single investment however, and it's their combined performance that I'm monitoring. I originally got into FNMA in 2013, but exited that same year as I didn't like my forecasts. Decided to come back in 2018 as I thought release was more imminent. Clearly it wasn't.
Wise Man
1 day ago
Controversial case Wazee II that D.Thompson abruptly seized control of, is postponed until July 29th with regard to the Defendant's response.
https://www.docketbird.com/court-cases/Wazee-Street-Opportunities-Fund-IV-LP-et-al-v-The-Federal-Housing-Finance-Agency-et-al/paed-2:2018-cv-03478
How did we get here?
Justice Alito can't make laws and his "path of rehabilitation" of the Federal government isn't taken into consideration, because the ones in conservatorship are FnF, not the government.
It turns out that no other than the DOJ co-signed a brief in Wazee II (a satellite case because Hamish Hume had Wazee I in the Court of Federal Claims with judge Sweeney), a case in a district court of Pennsylvania (something unprecedented, because it's a case against the FHFA, where the UST is a "shadow defendant", like in the Lamberth court, hidden under the bed that has never showed up before, in order to allow that a case against the U.S. government can continue in low-level District courts, with judges more easy to be influenced by the stakeholders (Wall Street and its celebrities on Twitter), when that's precisely the reason why the Court of Federal Claims was established), a brief requiring the attorney Hamish Hume to either:
(a) amend the complaint if the claim isn't sustained under the Supreme Court's Collins "decision" (opinion), or
(b) to voluntarily dismiss the case.
The attorney Hamish Hume did both at the same time. Huh?
-He voluntarily dismissed his other case, Wazee I, and thus, relinquishing the scheduled appeal two days later, clearly influenced by the the DOJ's signature in the brief (all the images are posted below). He got spooked in the only case that challenged the ongoing NWS 2.0.
-He allowed the attorney for Fairholme, the almighty David Thompson, to seize control of this case Wazee II, and file himself the scheduled amended complaint on July 1st, because he didn't like how Hamish Hume was challenging the NWS 2.0 that will be commented next, and instead, now with a claim "sustained by the Supreme Court's Collins decision" where he was a party, and he copy/pasted his same flawed stance he is peddling since: The ongoing NWS 2.0 is wonderland, and he even sought constitutional damages because the "for cause" removal restriction prevented it from happening sooner, firing Mel Watt before:
The UST gets rich with gifted SPS LP and, at the same time, FnF are being recapitalized with retained earnings.
A bunch of lies based on the Financial Statement fraud in the enterprises that don't post on their Balance Sheets neither the SPS LP increased for free, nor the offset with reduction of Retained Earnings account, that would prove that FnF are not building regulatory capital and the only one that is being rehabilitated is the Federal government (Justice Alito's spin that isn't taken into consideration), as stated, precisely, by the attorney Hamish Hume in the Court of Federal Claims with Wazee I, before the voluntary dismissal:
FnF start building their Net Worth, while also providing that 100% of that Net Worth would be owned solely by Treasury.
The attorney Hamish Hume got spooked by the signature of a DOJ attorney and he has disappeared from the two cases he was handling, Wazee I and also Wazee II because, although he wasn't expelled like other attorneys in the case and all the plaintiffs other than Wazee, he hasn't signed the amended complaint filed by the attorney David Thompson on the scheduled date, July 1st.
Hamish Hume's whereabouts remains unknown.
SCREENSHOTS.
Wazee II: the parties imposed two options, or else:
Wazee II: A brief signed by the DOJ:
Wazee I, 2nd amended complaint: Hamish Hume challenged the NWS 2.0, not like David Thompson who loves it. The self proclaimed "unsophisticated, not regulatory lawyer. I am a litigator" in a conference call hosted by the hedge fund manager Pagliara. His shield for his misbehavior in court freely.
Wazee I: the attorney Hamish Hume had a scheduled appeal.
Wazee I: Appeal relinquished when Hamish Hume, under pressure, voluntarily dismissed the case two days before:
Wazee II: after an abrupt appearance in the district court, the attorney D.Thompson signed the amended complaint on July 1st. An exact replica of his other frivolous lawsuits that the attorney for Fairholme also seized control of abruptly, in order to control the flawed narrative (Rop, Bhatti, Collins, Robinson): cover-ups of statutory provisions (FHEFSSA and Charter Act), the count of 210 days for the Time Limitation of Acting Director DeMarco (July 20, 2011 Final Rule that had a surprise: CFR 1237.12), plus the one based on Financial Statement fraud in FnF.
Wise Man
1 day ago
khompt19 is a very rogue person. No deference to someone that repeats that the statutory provision Restriction on Capital Distributions is when FnF have a capital classification of Undercapitalized, when it states undercapitalized and IN GENERAL.
Image below.
Just what Sandra Thompson and the Financial Services Committee state, to name a few:
FnF remain undercapitalized.
And the exception to the restriction: Reduce the SPS. (U.S. Code 4614(e)), which is what has happened to legalize the capital distributions that went through despite the restriction.
Then, DeMarco enacted the July 20, 2011 Final Rule, for the moment the SPS had been fully paid down, the FHFA and the UST needed another exception to continue to send assessments to UST (1989 FHLB-style) in the form of capital distributions, that is, under the guise of dividend payments: Deplete capital is authorized (Balance Sheet) for their Recapitalization, in an External Position obviously (exceptions 1, 2, 3 and 4 in the supplemental CFR 1237.12). Image below.
A follow-on plan.
He is also famous for saying that the $132B SPS LP absent from the Balance Sheet is off-balance sheet and it doesn't affect the companies, as if it could even be possible to have a Liability out there, as a satellite position, not meeting the Asset/Liability Matching principle and, secondly, FnF report their Financial Statements on a consolidated bases.
Therefore, FnF MUST show up 2 items, because what lies behind is the reluctance to post the offset with the reduction of the Retained Earnings account that happens always that someone hands out a security for free (Not getting the corresponding cash, like occurred with the initial $1B SPS issued for free debited from the Additional Paid-In Capital account. Also in the case of stock dividends, debited from the Retained Earnings account, etc.), so that the plotters like Ackman and Sandra Thompson repeat:
FnF continue to build capital through retain earnings.
As seen in this image showing the changes in Equity adjusted for the gifted SPS LP every quarter, in an amount equal to the Net Worth increase:
Which is what the attorney Hamish Hume referred to, in his 2nd amended complaint with Wazee in the Court of Federal Claims with judge Sweeney:
FnF start building their Net Worth, while also providing that 100% of that Net Worth would be owned solely by Treasury.
Surprisingly, he relinquished the appeal two day before it was scheduled on May 24th.
FnF are building SPS (capital stock), not regulatory capital for their financial rehabilitation:
▪️Adjusted Accumulated Deficit Retained Earnings account: $-216B.
▪️Adjusted $402B Core Capital shortfall over Minimum Capital (Leverage) Level.
That is, the same Common Equity Sweep as before with the NWS dividend. Both debited from the Retained Earnings account (Core Capital and CET1), the only account that absorbs the future "unexpected" losses.
What kthompt19 conceals is that this new compensation to the UST is another capital distribution (also number 1 in the definition of capital distribution) restricted, and thus, necessarily, the Common Equity being swept is, in truth, held in escrow (exception 1, 2, 3 and 4 to the restriction on capital distribution, CFR 1237.12 mentioned before) in order to legalize this capital distribution.
Also, in order to comply with the FHFA-C's Rehab power: Put FnF in a sound and solvent condition, related to regulatory capital levels.
The key: when people see the image posted above, they would begin to wonder whether it happened the same with the dividend payments (restricted and the exception: reduce the SPS), and all the Separate Account plan would come to light, for those that hadn't spotted it beforehand.
This is why just these two twists from the rogue khtompt19 denounced in this post, are of supreme importance, because he uses it to justify that $435B of capital in private corporations under Conservatorship have been syphoned off to the UST.
The frivolous litigation and their social media crew, work hand-in-hand with the government in what is known as Fanniegate.
The litigants haven't submitted to court a Financial Statement, attempting to portray FnF as Mutual Funds, like the FHA's MMIF, when FnF are private corporations presenting Financial Statements in their reports filed with the S.E.C., which is also why kthompt19 claims that having $132B SPS LP out there, unaccounted for in the Balance Sheets, is just fine, because it doesn't affect the companies.
DCBill
1 day ago
Calabria, a victim of his non-housing background and conservative dogma; Thompson, empty-suit, who was put into a job over her business capacity head and made subject to Treasury protocol.
They wanted to control GSEs--claiming "inadequate capital"-- then allow them to operate too successfully, making major "insiders," in both political parties look bad.
Sixteen years, now more, of unprecedented "Conservartorhsip," based on a well-documented 2008 political ambush that made no financial sense with few courageous people--outside of the companies--able to appreciate the Treasury bias and errors.
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