NeoSunTzu
4時間前
It is NOT unreasonable to base one's estimation of their own outcomes on the warrants being fully executed as that creates the most conservative estimate of what one can make out of their position.
That being said I think there is a ZERO percent chance of the warrants being FULLY executed under the current mathematical and financial conditions that exist. Read that carefully. That means, I believe IT IS NOT FINANCIALLY FEASIBLE to fully execute the warrants under the conditions of what they paid for them, including under the conditions that the $301B repaid still does not extinguish the $187.5 (or whatever the exact amount is) draws, and that a liquidation preference still exists as well. Because under ALL those conditions above NOBODY WILL TOUCH THESE STOCKS - they will be unable to sell a single share. First, because under these conditions that means they have NO CAPITAL to exit conservatorship. Second, they would have to so DEEPLY discount the shares that they would make almost nothing from the sale.
Now that we have set those conditions, I also believe it is HIGHLY UNLIKELY that even if the draws are considered fully paid off AND the liquidation preference is cancelled that they will be able to fully execute the warrants under the conditions of the price they paid for them. Here is why:
A fully diluted Fannie Mae will have 5.76B shares in total. Last year they earned $14.4B net profit. Tim Howard states at best the multiple for the GSEs is 15. This means a MAXIMUM share price of $37.5 under the p/e valuation model.
[$14.4B earnings / 5.76B shares] x 15 = [$2.5 earnings per share] x 15 = $37.5
Now think about these FACTS:
- After 18 years in conservatorship where the stock price was near $70 / share pre-crisis they will now try and float at best a $37 stock ?!!!!!!
- In order to entice investors looking at this Max price they will need to sell it for much less per share
- at 5.76 BILLION shares Fannie will only earn TWO DOLLARS and FIFTY CENTS per share?!!
-------- with a payout ratio AT BEST of 25% that means annual dividends would be 62.5 cents per share annually (they were paying over $2 pre-crisis); they will be unable to justify paying a higher ratio with so little earnings
-------- NO INSTITUTIONAL INVESTORS will pay up for a highly diluted stock under constant govt scrutiny that only pays less than a dollar per share annually
- ALL of those court cases were decided under the banner of being in conservatorship; NONE were considered by judges outside of that framework
- There is NO statute of limitations on a 5th amendment takings clause case which WILL become ripe if the warrants are executed (likely only brought to the courts if the taking are egregious 50% or more.
Now, all that said I can see a multitude of scenarios where the warrants could possibly executed in large percentage; however, ONLY with large offsets in the other categories of financial considerations which keep them in c'ship ... the ONLY government exit is at the generosity of investors willing to purchase shares and for that, they must be financially incentivized.
FOFreddie
5時間前
I held common and JPS when the warrant agreement was executed and I believed it was fair in the midst of the GFC. Knowing what I know now - I believe Paulson and his RINOS set Fannie and Freddie up to fail but no litigation has made it past a dismissal.
Today Fannie and Freddie would not exist without the implied full faith and credit of the US Treasury and Trump will exercise the warrants guaranteed. I am hoping for $ 20 to $ 60 on FMCC within 3 years.
At the time of the Conservatorship I was hoping for a $ 20 price - here is Grok's summary of trading the week before the Conservatorship - you will see that the market was expecting dilution going into the Conservatorship and the warrants were the dilution we received but more than what was expected:
Conservatorship for Freddie Mac (FMCC) was exercised on September 6, 2008 (with public announcement on September 7).
fhfa.gov +1
The relevant prior trading week covers September 2–5, 2008 (markets were closed on Labor Day, September 1). Adjusted historical daily prices from that period (splits and adjustments accounted for in sources) are:
finance.yahoo.com
Sep 5, 2008: Open $4.80, High $5.14, Low $4.65, Close $5.10
Sep 4, 2008: Open $5.33, High $5.49, Low $4.95, Close $4.95
Sep 3, 2008: Open $5.01, High $5.52, Low $4.80, Close $5.38
Sep 2, 2008: Open $5.20, High $5.23, Low $4.39, Close $5.18
Overall range that week: Low of ~$4.39 (intraday on Sep 2) to high of ~$5.52 (intraday on Sep 3). Closes ranged from $4.95 to $5.38.
NeoSunTzu
7時間前
I've done a ton of research on all these aspects of the 2008 financial crisis bailouts, warrants, etc over the years and will have to dig some of that back up, but I wanted to respond quickly to the AIG part. I did a rather extensive post on the Fannie Mae board covering the AIG thing, but no time to dig it up right now.
The Treasury received ZERO warrants for AIG stock - well, full disclosure, they took 2% warrants at the start of the crisis, but then immediately converted it to newly created different classes of preferred stock - NO COMMON STOCK at all; however, when they went to "cash out" of their position that is when they converted the different classes of preferred stock to varying amounts common stock and sold them over something like six different offerings. The TOTAL amount of AIG common stock those preferred shares were converted to 1.655 billion shares which amounts to only 25% of the shares that would be created if they executed the full 79.9% of F2 warrants. Additionally, AIG was allowed to purchase hundreds of millions of those shares the Treasury sold to the public and retire them - so those AIG repurchased shares did NOT further dilute the shares that were still held at the time Treasury got out.
Furthermore, the Treasury ONLY made $5 Billion in TOTAL on the sale of the AIG common and preferred stock: ($74.8B - $69.8)
AIG received $69.8B in bailout from treasury for stocks
Common $47.5B
Preferred $22.3B
Treasury proceeds after the sales to the public were $74.8B
Common $51.6B
Preferred $22.3B
The Fed also participated in the AIG bailout; the Fed made a $17B profit. In total AIG received $182B, ALL UP FRONT, NOT in draws like F2 received over many many years. AIG paid back only $205B for a total profit to the government of ONLY $22B while F2 paid more than $100B over the amount of draws they received. There is no comparison and its much worse when you consider AIG sold nearly $500B in credit default swaps which was really the cause of the true fire that nearly burned down the entire financial system ... NOT F2's MBS portfolio. It's really much worse than this I only touched on the highlights here.
So, Treasury made a total profit of $5B compared to the $100 B they've currently swiped from F2 and if you've read my other posts the $100B is just the starting point of the theft from F2.
Finally, my research shows the Treasury STANDARD warrant agreement from ALL other institutions bailed out in the financial crisis was ONLY for 15% of the government's preferred stock investment.
EDIT: also, ALL other financial institutions were given the right to purchase back their warrants and virtually no instutitions had the full 15% ever executed. I believe there was no more than 450 million shares of Citigroup that went to Treasury - if that were the case for F2 we would be GOLDEN!
NeoSunTzu
2日前
@FOFreddie ... I'm going to take a different approach here ... you are always gracious and courteous with your posts and for that you deserve kinder consideration; furthermore, you are going to be filthy, stinking rich when this is resolved and you DESERVE that as well for having noticed the violated principles in this investment which give it such value in the first place, and in the second place, for having the perserverance to see it through.
Now, that being said, the reason I take no prisoners and suffer no bull$hit with my posts is basically due to the nature of social media. For the vast majority of uneduated, ill-informed persons, which does NOT include you, one has to almost write an entire book to make certain points that should be relatively easy for those with a decent high school education to understand WITHOUT having to explain every detail. So, when someone of the elevated thinking class requires the same attention and spelled-out detail, which is sometimes understandable under certain circumstance, but much too often these days, I pull out my Mencken or Dr. Thompson sword pen and start slashing. To you, I will apologize.
Now, all that additional pablum out of the way, here is what I was getting at. All of those ERCF capital rules, restrictions on dividends and underfunded amounts ONLY exist due to the reasons I listed in that X post that Guido reposted to which you responded. Please read those again so I don't have to relist them here; they are the premise of the point that there is no lack of capital; there should actually be a huge capital surplus, no restrictions on dividends, and no need to currently be in conservatorship - all of which provides the basis of some calculated amount that should be due directly and near-immediately to shareholders for all of the bad faith actions and theft. I trust I do not need to explain this any further to anyone.
TieetCoolee
2日前
First Iran. This JUST IN!
Barack Hussein Obama’s Deal with Iran, the JCPOA, was an easy, beautiful, smooth road to a Nuclear Weapon, which Iran would have had six years ago, and would have used long before now. My Agreement with Iran is the exact opposite, A WALL TO NO NUCLEAR WEAPON! In fact, they no longer want a Nuclear Weapon, nor will they have one, either through purchase, development, or any other form of procurement. The Deal is scheduled to get signed tomorrow, and immediately after it is signed, the Hormuz Strait is OPEN TO ALL. Our relationship with Iran is a much different and better one than previous Administrations have had. Unlike Obama’s Hundreds of Billions of Dollars in payments to them, including 1.7 Billion Dollars in green, cold cash, no money will exchange hands. At the appropriate time, when all is calm, we will go in and get the Nuclear Dust, buried deep under the powerful sunken granite mountains, thanks to our beautiful B-2 Bombers and their brilliant pilots, and downblend and destroy it, whether in Iran, or the United States. We look forward to working with Iran, and the entire Middle East, long into the future. Hopefully, this process will all work out quickly, easily, and smoothly. If it doesn’t, we have the ultimate alternative, hopefully never to be used again! Thank you for your attention to this matter!!! President DONALD J. TRUMP https://truthsocial.com/@realDonaldTrump/116743808155352167
$FMCC~$FNMA~
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=177699632
NeoSunTzu
2日前
You can ALWAYS be counted on for missing the ENTIRE point and essence of an argument, concept, or post. The contrived, we'll call them "rules" - EVERYTHING combined that is in HERA, the letter agreements, financial statements and ANYTHING else related to these aspects are ENTIRELY beside the point of making the argument of the value that exists that should and could be returned to shareholders absent all the relevant points made in that post that highlights the corruption, theft, value taken, illicit warrants, and other man-made actions taken which have kept value from shareholders.
Your continually act as if you are the only one who has read these ERCF rules - which are entirely contrived from, and ONLY exist in the form they do because of the all of the illicit actions taken by the various administrations. I did NOT say F2 was legally allowed to make these payments based on the current agreements, but merely pointed out all the logical aspects that make the case for such a payout to be substantiated in light of the actual actions that have been taken against F2 shareholders by the various adminstrations over the years.
It is beyond tiring to point out to you over and over and over the basic logic of arguments and the plain english of actual statements made versus what you think is said or even implied because you want to point out that you've read the ERCF rules. I've read them and understand the quite well.
FOFreddie
2日前
Such a Dividend Payout is NOT ALLOWED until the ERCF CET1 Cap Requirements with Buffers are met:
Here is the 2024 10-K Discussion
The ERCF establishes risk-based and leverage capital requirements and includes capital requirements relating to the amount and form of the capital we hold, based largely on definitions of capital used in U.S. banking regulators' regulatory capital framework. The ERCF capital requirements contain both statutory capital elements (total capital and core capital) and regulatory capital elements (CET1 capital, Tier 1 capital, and adjusted total capital). The ERCF also includes a requirement that we hold prescribed capital buffers that can be drawn down in periods of financial stress and then rebuilt over time as economic conditions improve. If we fall below the prescribed buffer amounts, we must restrict capital distributions such as stock repurchases and dividends, as well as discretionary bonus payments to executives, until the buffer amounts are restored.
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