Wise Man
3 hours ago
Primarily, it's an agreement (Purchase Agreement). So, don't say "contract" when the written text says "agreement".
Secondly, the SPSPA must be read in the context of having two laws in force (the FHEFSSA and the Charter Act, as amended by HERA), and it cannot be read in an isolated form, and, specifically, we must pay close attention to the Incidental Power of the conservator, because it allows it to "take any action authorized by this section, in the best interests of the FHFA."
Then, first of all, anyone should have spotted the multiple and ongoing statutory breaches:
-Restriction on Capital Distributions. Exceptions.
-FHFA-C's Rehab power, about building capital (soundness) and reducing debentures (solvency), where the reduction of SPS fits in. A statutory mission spotted by Gary Hindes, but later he removed this claim in an amended complaint. Source.
-The Fee Limitation clause, to see that the original rate similar to Treasuries prevails (estimated at a weighted-average 1.8% cumulative dividend rate with a spread over Treasuries of 0.5%), in exchage for their Public Mission (section Purposes).
-Etc.
Or spot what HERA struck in the FHEFSSA, like the MANDATORY release from a conservatorship for Critically Undercaptialized enterprises, with a Capital Classification of Undercapitalized: Core Capital or Tier 1 capital > 2.5% of adjusted total assets nowadays. Which implies that FnF have to build capital during conservatorship for their financial rehabilitation.
Or spot what Calabria forgot to include in the FHEFSSA with his amendment of HERA: the typical 18-month IMPLEMENTATION provision when a law requires changes, that has allowed a "back-end Capital Rule" (revealed after the Transition Period to build capital and not before as usual), in an attempt to mislead us ("The capital built is gone!", with Pagliara's clerk, Guido, repeating it in his daily crazy tweets).
Finally, spot that the FHFA and the UST already carried out a Separate Account plan with the FHLBanks in 1989, through the statutory provision entitled SEPARATE ACCOUNT FOR THE REPAYMENT OF PRINCIPAL: amounts reinvested in zero coupon Treasuries, so the face value matches the principal at maturity, and the Treasury Department in charge of calculating the discount rate for this scheme.
All in, anyone could have come up with the idea of a Separate Account with FnF as well, because it's a plan that legalizes all the aforementioned statutory breaches, thanks to the Incidental Power "any action".
Therefore, anyone can come to the conclusion that the capital distributions necessarily have been assessments sent to Treasury, just like the FHLBs did (too bad that they had to pay $300mll in interests annually. A 10% interest rate with a 0.299% spread over Treasuries), under the guise of capital distributions, applied towards the exceptions in the law (Applied towards the reduction of SPS in full, as dividends are restricted, as per the U.S. Code 4614(e). Later on, the July 20, 2011 CFR 1237.12 added another exception, either 1, 2, 3 and 4: "For their Recapitalization outside their Balance Sheets". External Position), otherwise they are restricted and a breach of the FHFA-C's Rehab power (soundness).
Also, it complies with all the financial concepts, because a dividend wasn't available if it's a distribution of Earnings, and it's been Accumulated Deficit Retained Earnings accounts all along.
It includes the SPS LP increased for free as compensation to UST, another capital distribution like a dividend payment. Necessarily, the common equity being reduced as a result (concealed with Financial Statement fraud: gifted SPS and its offset, absent from the balance sheets), is held in escrow (the necessary CET1 for recap.)
BOTTOM LINE
This is why the plotters cling to "SPSPA, a contract", so the broad picture with the laws in force goes unnoticed.
Laws covered up in court to that end. This why the abuse of court process has been an essential tool by the plotters.
Now it's when the SPSPA is lawful in its entirety, thanks to the FHFA-C's incidental Power: "Zing!".
There is nothing up for interpretation in the law, or Chevron doctrine, but it's been all about people playing the fool.
Timothy Howard recently in his blog: "Separate Account? I don't know what that means", when it's the title of a statutory provision for the FHLBs when he was CFO of Fannie Mae. He must have heard of it for sure.
"May" in the power, doesn't mean that the conservator is excused from complying with its statutory mission, once the capital has been generated. Kind of "May? Now I don't do it!".
"May" is an authority in statutory wording, not a choice.
"May" grants some leeway but about activities from the regulatory point of view, like recently with the announcement of delisting in a bond in Freddie Mac, arguing that it was the only series trading on the NYSE, and it has cost the company money. That's why the "may" is necessary in the process of building capital.
The lawmakers have had their constitutional duty of overseeing the FHFA unaffected, and they have authorized this separate account plan with their omissions.
Wise Man
5 hours ago
The litigants are in deep trouble. They are using the common stocks to negotiate with the government a better deal for the battered JPS.
This is why FnF post a BVPS or Common Equity Per Share of an adjusted $-133 and $-121 in FMCC and FNMA, respectively, as of end of March 2024.
$0 of capital recovered with their remedies in frivolous litigation ($29B cash refund, etc.), concealing that it's all about capital distributions, both the dividend payments and the SPS LP increased for free, RESTRICTED.
They aren't interested because the capital missing is Common Equity, and the $0 EPS posted every quarter in their Income Statements, refers to the common shares.
Make not mistake, this is a felony of "abuse of court process", besides stock price manipulation obviously.
We have the example in the WAZEE case, where the attorney for the hedge funds, Hamish Hume, brought the ongoing NWS 2.0 in a 3rd amended complaint (7 years after the first $3B in December 2017 by the Mnuchin-Watt combo. $132B SPS LP increased for free in FnF together piled up so far), but he dismissed the case voluntarily in the Court of Federal Claims, two days before the scheduled appeal in late May.
It turns out that he had a satellite case in a District court, called WAZEE too (How is this even possible?), and the judge has asked him what on earth is going on, with a deadline of July 1st: Is he going to voluntarily dismiss the case again, or file another amended complaint with the NWS 2.0?
What lies behind is that all the lawsuits are meritless with the Separate Account plan, and these Fanniegate attorneys are just fighting for their paycheck.
The evidence of the utilization by Wall Street of the lawsuits to negotiate with the government, is seen also when the attorney for Bekowitz, the omnipresent David Thompson, did it again: He has shown up in this Wazee case in a district court, with the objective to seize control of the case and thus, the narrative, with the expulsion of two of the original attorneys that have already left (like in the Bhatti, Robinson, Rop and Collins cases) and only Hamish Hume stays.
Also, we've seen how he has ousted two of the plaintiffs and only WAZEE remains.
It turns out that David Thomspon and Hamish Hume are the two attorneys for the two cases before judge Lamberth with a sham case brought up "Implied contract". So, the broad negotiation is crystal clear.
This abrupt appearance by David Thompson with the Wazee case, hasn't gone unnoticed.
The district court judge must have heard of his bad reputation, obsessed with using the lawsuits to negotiate a better deal for his client Berkowitz (The Mediation in the Rop case, was cancelled at the 11th hour when it was denounced on social media), and it's been 4 days without the judge granting permission to David Thompson to practice in his court, when it usually takes one day.
All the Fanniegate attorneys are cut from the same cloth:
The smart guys are others, the regulatory lawyers. I'm here just for the check for playing the fool and this is why I wear diappers. Hi Rum!
Wise Man
6 hours ago
The UST's Capital Magnet Fund gets 35%(not 65%) of the 4.2 bps sent by FnF annually, the rest is allocated to HUD.
I've been tracking this number and I estimated it's been $5B in total so far. The madman of this board claimed yesterday that it's $10B with one of his multiple aliases.
For the record, the other "legislative fee" or "bad taste" fee (barred in the Fee Limitation of the United States of the Charter Act, that starts with: "PROHIBITION". What was Calabria thinking of?), called TCCA fee, that, when it expired, it was renamed BBB fee (10 bps guarantee-fee) sums $44B.
And, another windfall for the UST, because it contracted with FnF the administration of Obama's Making Home Affordable program, under the premise that FnF will be reimbursed with TARP funds for the costs incurred, but later Obama bailed (Source), is estimated between $10B-$15B.
With an accounting standard amendment in 2011, even the borrowers that were current on their mortgage payments were granted a loan modification that, under the prior Incurred Loss accounting standard, the concession was recorded as a loss in FnF (a provision set aside). It was changed with the 2020 CECL standard.
Fat bonuses for the bank executives those years, we later learned, thanks to the funds provided by FnF to the mortgage servicers under the MHA program.
Thanks to the SCOTUS, the UST arguably gets to keep this amount due.
We see how the manufactured crises and then, the sluggish economic recovery, are very profitable for the politicians, the banks and Wall Street.
As commented previously, now these windfalls in the UST are useful in the case of Fanniegate resolution "as is" or "Takeover", where the UST nets $0 in the bailout of FnF.