I believe the GAAP rule change affecting asset valuation came after the 2007 pfd onslaught had already commenced. If they were addressing the previous round of GAAP changes as explained in the Rudman Report in March of 2006, no where near $7 B would have been involved.
If you have any details, they would be appreciated.
I must say, these IPOs look suspiciously like preparation to stave off HERA.
Yes, fosco.dominator, the amount of pfd shares issued is small in comparison to the swept proceeds under NWS. Some day the court may decide how much of that is a repayment of bailout funds, how much was either interest or dividends paid for the bailout, and how much, if any, was an overreach. But in general terms, after several losing quarters, a capital infusion of $13.875 B as the world around them was collapsing is a pretty large insurance policy against being taken over as HERA wound its way through the legislature.
It circumstantially looks a lot to me like these major IPOs of pfd shares arose more from the Wild West mentality at Fannie that persisted for many years under at least two regimes as a way to armor plate the status quo against the Draconian possibilities suggested under HERA. These guys were highly compensated leaders. It would not be way out there to suggest maybe they went out on a limb and floated stock to preserve their own positions(?). Such action would be more attributable to Fannie Mae than to anything the government did. It's just a theory.
Hindes, Jacobs seeks to overturn the NWS by claiming that the conservatorship by FHFA was improper and should never had occurred. That is the underpinning to the invalidation of the NWS. No conservatorship? No government takeover. No government takeover, no legal premise to enact Amendment 3. Read the briefs filed by Steele and Howard.
If the numbers that support the conclusion of "no bailout needed" are only the result of some 11th hour gambit by Fannie Mae to "groom" their financial health by floating huge quantities of new, preferred stock worth some $13.875 billion... that has the potential to make Fannie Mae, itself, not the Federal government, the real villain in all this conflict in Fannie Gate.
You have to admit that the timing of this feast on pfd shares seems pretty odd since Fannie had issued no preferred stock since 2003, and its total issued from 2000 to 203 was only about 55 M shares. Then they suddenly put out there 4 huge IPO's for 445 M shares at 8%%+coupon rates at a time where the financial world was collapsing around them and interest rates were coming down.
I have no answers for the questions I asked. And, apparently, neither do you. But the more crucial test will be the plaintiff's ability to convincing answer these questions in the courtroom, because failure to do so will surely lead to their case being thrown out by any judge in America.
The connection to the NWS is that immediately prior to the takeover, Fannie Mae padded its coffers with $13.875 billion in newly issued preferred stock that inflated its seeming ability to meet its obligations wile sustaining heavy losses. This is a substantial part of the rationale for the Amicus Briefs filed by both Steele and Howard in the Hindes, Jacobs case pending in Delaware that seek to overturn the NWS because no bailout was even needed by Fannie Mae.
IMHO, this revelation on preferred share issuance, which I have never seen in any narrative pertaining to the Fannie Mae matter, serves to invalidate one of the basic underpinnings to many plaintiffs claims, especially Delaware where the entire plaintiff outcome revolves around getting the NWS overturned.
Do you think Paulson achieved the goal you cite by delivering the GSEs into conservatorship that the Congressional Budget Office estimated would carry an eventual cost of $400 billion? The more popular view among experts in 2008 was that the GSEs would NEVER be able to repay the bailout money, ever.
Yes, Fannie Fans, all was well in 2007 & 2008. Fannie needed no bailout. Everything was just peachy keen. Then mean old Mr. Paulson and his cabal of bank and government goons had to ruin a perfectly good company like Fannie Mae. Yeah! Yeah! "Off with their heads."
Small, interruptive question for all you true believers. If this rosy view of Fannie is truthful, why did Fannie feel compelled to issue 445 million preferred shares (now junior preferreds) at $25 par between the end of September, 2007 and May, 2008? That's $11.375 B in interest bearing stock? And why did Fannie have to increase the dividend rate to around 8% in a period where the Fed was dropping interest rates like a rock? And how much of the suspended dividend obligation of around $1 B per annum was never considered in the beloved forensic accounting validations because it was largely never paid and, thus, excluded from reported metrics used in 10-K reporting?
Something may stink in all this Fanniegate debate, and maybe a big part of it starts right here.
Yes, it's all done by computer screening. If you write PR_CK with an "I" it gets deleted. If you write it with an "L" it stands. I had a post about former NYSE chairman Richard Grasso deleted the other day because I used D__K instead of Richard, even though that is how he was always referenced in all media accounts.
More racist garbage on this sorry board. What's next? Cross burnings and hangings?
You obviously don't grasp the reason why Mel Watt absolutely cannot release Fannie without triggering an imminent default crisis. FNMA has 1.16 B outstanding shares and generated a per share profit of $.34for Q3. It's prognosis for Q4 is $.45 and for all of FY16 @ $1.80, flat with Q4/FY15. This puts margin projections for the entire 2016 fiscal year @ $2.088 B. That's all there is.
So let's look at the first thing Watt would trigger by releasing Fannie. That would be the restoration of preferred dividends that have been suspended since 2008. That amounts to $972 M per year, or about 50% of FNMA's generated profits as expected for 2016.
Maybe that gives you a warm and fuzzy feeling about Fannie's ability to weather another downturn, but it doesn't do much for me.
Yup, you are right. There is nothing worse than some Monday-morning quarterback loudly declaring how he had all the answers when what he really had was 20/20 hindsight. Reminds me of forensic accounting analyses and Tim Howard's just-prepared amicus briefs.
You used precisely the right word, too: "imbeciles". Kudos.
So you, too, like gary0barnes think that TJ is an appropriate spiritual guide and moral compass for all our children and grandchildren who should live their lives in multi-partner sexual escapades and procreate secret off-spring whose sustaining families get disavowed and treated like lepers by their patriarch?
Wow. Shot up a Planned Parenthood Clinic recently?
A better question is why none of them had the courage or conviction to stand up and fight. They were the authority in the mortgage finance arena. They were among the highest paid executives in the financial sector. How come they couldn't see coming what The Big Short portrays as a common epiphany among the financial glitterati that a housing and credit collapse was coming.
And if Treasury was contemplating some sort of takedown in early 2008, was it because of some ulterior motive to destroy the GSEs as some infer, or was it because they could see the handwriting on the wall while Nero fiddled in the grandiose Fannie headquarters estate and collected their bonuses?
Who knows? I don't think it is any former Fannie CFO with possible tracks to cover. Let's just see how the questions eventually get answered in court.
Thomas Jefferson owned slaves, slept with the help and fathered out-of-wedlock love children in adulterous affairs that disgraced his family. He was an amazing man, alright. Lots of good. Lots of bad. No paragon of virtue, he.
The conservatorship was in 2008. Remember? DeWine's testimony was regarding the need (or alleged lack, thereof) for the government takeover.
You are an absolute IDIOT for your stupid comments.
Former Ohio Senator and Attorney General Mike Dewine testified before ranking member Rep. Michael Capuano and the Congressional Oversight and Investigations Committee on FEB 15, 2011. It paints a radically different opinion than the amicus brief written by Timothy Howard.
I think Dewine NAILED IT!
Read the full pdf of his testimony. Link posted on investorshub this morning, or search it on Bing under: Mike Dewine Full Congressional Testimony. The truth will set you free!
That's what Martha Stewart went to prison for doing.
Oprah to you too, there, sheep-pounder.
Regards to your significant other... baaaaaaaa bby.
Maybe, maybe not such a great dude. Former Ohio Senator Mike Dewise doesn't seem to share your view, though, when he appeared before the House Subcommittee on Oversight and Investigations when he was Ohio's Attorney General at the time. His testimony on FEB 15, 2011 paints a starkly different picture of things. I linked it on investorshub, or it is widely archived on Bing under Mike Dewine Full House Testimony. Just bring up the full pdf file to enhance your understanding of his amicus brief.