Fannie Mae, Freddie Mac’s Bill Progressing At Warp Speed! by timhoward717.com
I wanted to add more thoughts on Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC)’s latest bill. Last night I wanted to cover some of the things that may have gone unnoticed at first glance.
Warren Buffett’s 2018 Activist Investment
Most investors are aware of Warren Buffett's most high profile long-term investments. However, there is one long term investment that is often overlooked. Q2 2020 hedge fund letters, conferences and more This is building materials maker USG, which was owned by Berkshire Hathaway for more than 17 years before it was acquired in 2018. If Read More
Shareholders’ consideration in Fannie Mae, Freddie Mac reform
Remember just a few months ago the big news we celebrated was when a senator made an off hand remark that they may consider the shareholders in potential Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reform and now yesterday we actually saw a bill that releases us. All year the norm was having to watch Senator Corker and company go on a financial new show twice a week proclaiming our utter demise. We have made so much progress in so little time it can be a daunting task to keep up. At times, the major issues can overlap each other, and I am trying to keep things as simple as possible because I know we have quite a few readers who are fairly new to our cause.
As I said last night the odd timing of this bill was timed to send a message to the judges in our cases that DC wasn’t seriously going to abolish us altogether. Trying to imply that the judges do not necessarily have to take any bold actions. That they can trust DC to do the right thing and not totally illegally fleece us. Considering their track record don’t think for a minute, the Judges will believe this. This only proves what I have been hearing that is the politicians who have plotted our demise and stolen our profits are finally beginning to feel the heat. This day is long overdue.
New Fannie Mae, Freddie Mac bill a democratic coup to keep the GSEs alive?
This bill is also a critics part of the democratic coup to keep Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) alive. This is a conversation changer, talk now will turn to the inevitable release of Fannie and Freddie. First we saw the blue state democrats derail the johnson Crap bill. We then saw Harry Reid utilize the nuclear option to oust Demarco and install Obamas Lieutenant Watt to head the FHFA. Harry Reid is a general in the coup by the way.Watt than immediately squashed every attempt Demarco had in place to shrink and wind down both Fannie Mae and Freddie Mac. We than see Obama install another key democratic player Julian Castro to head HUD. Now we have these democratic reps introduce a bill that they know has no chance of getting out of the republican lead house that keep Fannie and Freddie alive. The coup is not only alive it is not far from full fruition. Any GSE reform would squash the goals that the democrats have worked decades to achieve, and they have no intentions of letting them go. They do want to keep our profits for as long as possible but eliminate Fannie Mae and Freddie Mac and everything they offer not a chance.
I want to commend our readers for continuing to post some incredible comments after our posts. I love the continuing dialogue. One in particular from Piper points out correctly that this bill was certainly not new news and he posted an excellent breakdown of the actual nuts and bolts of the bill, here it is Caveat Emptor. Time to take a deeper look at what Delaney, Carney and Himes propose in their outline.
Where is there shown an understanding of the conservatorship, the current secondary mortgage market and housing finance?
Fannie Mae, Freddie Mac’s private capital
Where is the private capital coming from? At least 500 billion is required.
“The Delaney-Carney-Himes housing finance proposal creates a structure that enables the government to significantly expand the availability of capital in the insurance market, while ensuring the mortgage market is open and efficient – with private capital participating in the market and pricing all of the risk.”
What is the structure they are talking about? Not present. Where is the private capital coming from? Who are these companies? The TBTF banks are the only ones with capital of this magnitude and at least 500 billion is required. The TBTF banks have not stepped for CW or JC. They certainly will not step up to these wild promises of the US Government/ taxpayer (Ginnie Mae) to take on 95% of the risk if these insurers back out or fail miserably as they did before.
“taxpayers will remain on the hook in the event of another downturn in the housing market.”
They will remain on the hook with this explicit 95% Ginnie Mae guarantee they propose. The private sector will game this proposal to death if given the chance to make profits and shift losses to the US Government if they goof up. And does Ginnie Mae have the secondary mortgage market expertise of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC)? No. This is same CW, JC giveaway to the big banks but instead of a FMIC they repurpose Ginnie Mae.
They believe a transition to a private market can happen in less than 5 years and that the disruption to the current housing market is greatly overstated. Are these Congresspersons clothed in their right minds?
Treasury guaranteed funds for Fannie Mae, Freddie Mac
The US Treasury guaranteed 200 billion for each GSE. It is ridiculous to state that the US Government explicitly guaranteed $4 trillion of debt and obligations. That is false.
Why is there no serious consideration of the $213 billion paid in dividends to the US Treasury? Over $25 billion more than invested by the US Treasury was taken in.
Delaney, Carney and Himes think the third amendment is a good deal, that is, “the government negotiated a deal that allowed it to ultimately take all of the profits of the companies.”
What sort of negotiation happened? Is this acceptable? Apparently, these three think taking others property is ok as long as it them and the Congress doing the taking. 18 lawsuits challenge that thinking.
“Now that the companies are profitable and have paid significant sums back to the Treasury, Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) shareholders want to change the deal.”
Change the deal? What deal? There was no deal. Laughable.
Delaney, Carney and Himes among themselves think Fannie and Freddie could have a future. When did three Congresspersons or the Congress as a whole gain the constitutional or statutory rights to confiscate and sell two publicly-traded and shareholder owned companies without due consent of the shareholders? There are no such rights. Who do Delaney, Carney and Himes think they are?
These three emperors have no clothes.
Thank you for this insightful analysis Piper Drew. I also want to send a big congratulations out to Tim Howard and the rest of the American soccer team; job well done. Also, I will be posting on a deal we have made with value walk to share help spread our message. One thing I will say now is that I have refused any finical compensation from them, I am not doing this for profit. I hope all of you have a Happy Independence weekend, and if any of you are on Cape Cod, you maybe be sitting on the beach with me. Keep the Faith!