clarencebeaks21
3 hours ago
“Do yourself a favor and stop with the fancy word salad. Post hoc, ad-hominem, static statutory analysis. Sounds impressive”
Labeling is just another version of the ad hominem fallacy. If you can’t engage critiques on their merits, just admit that.
“But again I stand by my analysis.”
In this thread, so far, there is none.
“The SPS are not preferred equity shares issued by the corporations under section 303.”
If the Sr preferred stock is not preferred stock authorized under FNMA’s charter act 303, what is it?
“They are obligations in my book.”
Aha. Here at long last is a premise: the Sr preferred stock are obligations.
But this opinion runs afoul of the black letter of the charter 304(b), which covers “obligations”, which all have “maturities” and “interest rates”. Where in the SPSA precisely does the preferred stock have a maturity date, pay interest, and at what rate? Your attempt to fit stock into 304(b) simply stretches the language too far beyond its plain & simple meaning.
“No capital stock or preferred equity with these features,have ever existed before from the Corporations.”
True.
“The SPS product are not a stock…”
But the first question is whether the preferred stock *was a product*, and thus regulated, so here asserting the conclusion as a term just begs the question. Another fallacy.
“The SPSPA is the new “product”.
Here now is a second, different argument than the first one above. Now we are being told that the entire shareholder agreement is a “product”. But why?
“The following is the SPSPA:
https://www.fhfa.gov/sites/default/files/2023-07/FNM-SPSPA_09-07-2008.pdf
“The entire agreement is prefaced on section 304 to purchase the SPS.”
Which subsection of 304? Which words precisely? What does “prefaced” mean?
“Read section 4.4… validly issued….”
How is the SPSA’s Valid Issuance clause fundamentally different than the same clause in a million other stockholder agreements?
And since we’re reading the SPSA, I would be remiss to not refer you to section 5.4, which lists preferred stock and warrants as “Equity Interests”—a defined term on page 3 that does not include obligations.
“This contract between FHFA and Treasury don’t mention section 303.”
But why would it need to?
“The SPS are …a new product for the purpose of stabilizing the secondary mortgage market under section 304.
Here again “SPS…are a new product” is begging the question. Another fallacy. A general reference to a section simply will not do: what words specifically?
Speaking of 304, it’s true that under 304(g)(1)(A), Treasury may purchase “obligations and other securities” of FNMA. But Treasury was not authorized to purchase stockholder agreements. You need your novel term to fit within this listing, or be a natural extension of it, but it is of a completely different nature. Thus it also violates the principle of Ejusdem Generis.
“The agreement is the product.”
This conclusion is not quite a fallacy of Ipse Dixit but it is also unexplained.
Wise Man
16 hours ago
Subsection (c) any obligations of subsection (b) REDEEMABLE OBLIGATIONS.
More evidence that this hybrid financial instrument could have been purchased through subsection (c), either as a Preferred Stock and as its underlying security, an obligation (fixed-income security), because all the Preferred Stocks are permanent securities, but redeemable at the option of the issuer at determined dates.
The taxpayer's assistance at rates similar to Treasuries, subsection (c), is part of the Charter dynamics, in exchange for their Public Mission.
So, anyone could have come to the same conclusion, unless they were more interested in being portrayed as "leadership" and the extortion of resources out of FnF.
Wise Man
20 hours ago
Calabria had to slam the publication "IMFpubs" that only Rum posts on this board regularly.
Calabria now is bald for stating the obvious: there is no government guarantee on their MBS, which are guaranteed by FnF themselves as always, but he forgets to add that it's established in the Charter Act.
Not "implied" either, as the hedge funds would reply.
There is a UST backup of FnF "to finance their operations as a last resort" in exchange for their Public Mission that makes them take on more credit risk and not appropriately compensated, as stated in the section Purposes (of the Charter Act).
Commitment Fees, barred, in case you were wondering.
It seems that Calabria attempts to make up for his prior gaffes:
-The UST backup of FnF is the subsection (c) at rates similar to Treasuries. Yet, instead of updating the outdated $2.25B limit, Calabria, with HERA, inserted in the Charter Act a second homonymous UST backup subsection (g) at an up to an infinite rate, and up to an infinite amount, just below the original one. Huh? What kind of terms and conditions are those?
The Preferred Stocks are permanent redeemable securities and their underlying security is an obligation (fixed income security). This is why the Preferred Stocks are "obligations in respect of Capital Stock" (SPSPA):
The renowned 90-year-old plaintiff has difficulties in understanding this hybrid financial instrument with animated conversations with himself in this board, using more than 50 different aliases: "A product. No, it's not a product. I said, yes. Obligation. No, product. Hold that thought, I have a phone call from the DOJ."
-He has participated in the unlawful CRT operations, unauthorized in the Charter Act clause Credit Enhancement, other than the PMI (#1) and the commingled securities (#3). Now, $20B in CRT expenses/recoveries, net, is due.
Let alone that FHFA doesn't have authority to start a Housing Finance System revamp on its own, violating the Charter Act.
-He waived the typical provision 18-month IMPLEMENTATION, when the law requires an Agency something, like the very FHEFSSA of 1992 when the director was ordered to come up with the Risk-Based Capital requirement. Now, HERA struck that provision with the mandate of a new one, but without timeline. This way, it's been achieved a "back-end capital rule", after the typical Transition Period to build capital that any Federal Agency grants when it proposes changes in a Capital Rule, so that the hedge funds peddle the lie: We've been robbed!, and the idea that FnF will start to build capital from scratch 15 years into conservatorship.
-This lie of "the money is gone!", was peddled by Calabria as well, with bad jokes.
-The statutory Critical Capital Level was declared "irrelevant" because it triggers a Conservatorship during a Conservatorship. It doesn't mean that you don't have to publish it in the ERCF.
-Although Mel Watt and Mnuchin started the 3rd phase of the Separate Account plan, with another capital distribution restricted (SPS LP increased for free as compensation to Treasury in the absence of dividends) on December 2017, he continued it adding a massive plan of deception with the "Capital Reserve End Date": when the capital reserve meets the capital requirements, at the same time he enacted the ERCF that tells you that Capital Reserve isn't a valid capital metric. And, in the same January 2021 PA amendment: release from conservatorship when CET1 >3% of TA, when it was Tier 1 >2.5% of TA (Capital Classification Undercapitalized. Weight for the Core Capital/Tier 1 Capital, updated) a MANDATORY release that he struck down with HERA.
-Nowadays, he and the FHFA peddle the lie of "Net Worth absorbs losses" for the "Rehabilitate FnF", once the "Capital Reserve" was debunked. NW is a sum of items. Only the Retained Earnings account absorbs losses (adjusted $-216B). No rehab.
It's pretty obvious to think that Calabria didn't like the Charter Act, but you can't just ignore it, because it doesn't disappear and you will be hit with multiple felonies for statutory breaches. Likewise, attempting to deliberately inflict the insolvency during a conservatorship.
It was the very Calabria who put forward one solution: a Taking of our stocks at their Book Value (Net Worth: difference between Assets and Liabilities), in order to revoke the Charter Act. Today, it's calculated with the adjusted numbers. In 2007, it would have been cheaper.
The "Book Value" of the JPS is their par value. Their fair value matches the par value, so the Administration avoids a backlash. As obligations, FnF have a compromise of repayment with the JPS (They are redeemed by FnF, not acquired by the Treasury).
His only achievement, was to rectify Mel Watt and re-propose the Capital Rule, Basel framework this time, with CET1, TIER 1 and a Total Capital = 8% of RWA, whereas Mel Watt fetched 8% but with the inclusion of shenanigans, like an "ongoing concern buffer".
Thus, complying with the 2011 UST's 3-option Privatized Housing Finance System chosen for the release from conservatorship, at the request of the Dodd-Frank law, recommending guarantee fee increases, so FnF are subject to the same capital standards as the fully private banks (Adoption of Basel framework for capital requirements).
Barron4664
23 hours ago
Do yourself a favor and stop with the fancy word salad. Post hoc, ad-hominem, static statutory analysis. Sounds impressive but again I stand by my analysis. The SPS are not preferred equity shares issued by the corporations under section 303. They are defined as a variable liquidation preference senior preferred shares in an agreement between Treasury and FHFA. They obligate the corporations to surrender their entire net worth to Treasury. They are obligations in my book. No capital stock or preferred equity with these features,have ever existed before from the Corporations. It is not “perhaps” as you say but rather a “fact”. Sorry I was not clear. The SPS product are not a stock issued by the Corporation, it is an ever evolving agreement called the SPSPA. The SPSPA is the new “product”. Not the preferred shares themselves. They just enable the rest of the agreement. All you need to do to realize this is read the share certificates. The following is the SPSPA:
https://www.fhfa.gov/sites/default/files/2023-07/FNM-SPSPA_09-07-2008.pdf
Just read the background to see the entire agreement is prefaced on section 304 to purchase the SPS. Read section 4.4 to see that the SPS “when issued in accordance with the terms of this Agreement, the Senior Preferred Stock, and Warrant will be duly authorized, validly issued….” So the black letter words of this contract between FHFA and Treasury don’t mention section 303 but that the SPS are valid only if issued under the terms of their agreement. It is a new product for the purpose of stabilizing the secondary mortgage market under section 304. Again the agreement is all that has mattered since 2008. The agreement is the product.
But it is all academic, because the variable liquidation preference and warrants are an illegal charge or fee assessed on the issuance of 1,000,000 senior preferred equity shares that Treasury bought for $1 billion.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
Patswil
4 hours ago
real777mellon
4 hours ago
bradford86
7 hours ago
Acme Investments
8 hours ago
ewtrader
8 hours ago
trunkmonk
11 hours ago
Hot Features
Premium
