This is looks desperate…….
So, here is the thing. John Carney is his latest Breitbart piece claims that Rolling Stone and the NYT “smeared” Marco Ugoloetti by falsely claiming recently released documents contradict his 2013 testimony. In doing so, he offers us this single sentence from Ugoloetti’s deposition:
“it appeared unlikely that either of the enterprises would be able to meet that amount consistently without drawing additional funds from Treasury.”
What can past market crashes teach us about the current one?
He then goes on the pick a few sentences out of 144 pages that “support” his assertion.
But, what else did Ugoletti say in 2013?
“At the time of the negotiation and execution of the Third Amendment, the Conservator and the Enterprises had not yet begun to discuss whether or when the Enterprises would be able to recognize any value to their deferred tax assets. Thus, neither the Conservator (FHFA) nor Treasury envisioned at the time of the third amendment that Fannie Mae’s valuation allowance on its deferred tax assets would be reversed in early 2013, resulting in a sudden and substantial increase in Fannie Mae’s net worth, which was paid to Treasury in mid-2013 by virtue of the net worth dividend.”
We now know this to be an outright falsehood. Fannie CFO Susan McFarland testified in 2015 that FHFA, the GSE’s and Treasury were informed in late 2011, over 8 months BEFORE the net worth sweep was enacted that there was a large tax deferred asset reversal coming.
Q. Okay. And when you say that you would have had dialogue with people at FHFA about the deferred tax assets, with who would you have had the dialogue?
Would that have been Mario Ugoletti?
MR. LAUFGRABEN: Object to the form of the question; vagueness as to time period.
A. Yeah. So early on, it’s probably through the Chief Accountant’s office of the FHFA, because it is a technical accounting matter.
Q. And do you happen to recall —
A. I can pick him out of a lineup.
Q. Okay. We’ll show you some names later on.
A. I tell you, I — ask me a number, I can probably give it to you. People’s names…
It would have started there. Eventually there were conversations with Director DeMarco and key direct reports of his, but that — the — those — the DeMarco conversations occurred when we were actually in the serious mode of potentially — we were looking — we did a full analysis at the end of the second quarter; no release. We did a full analysis at the end of the third quarter; no release.
When we were doing the analysis for the fourth quarter of 2012, we started to get to a point where we were tipping towards release, and that’s when I began to have conversations with more senior folks at FHFA on it. But they were already aware of the statement that I made to Treasury. I mean, in general, I put it on people’s radar screens that it’s something that could happen in the not-so-distant future.
I will say that I believe Mary Miller asked me in this meeting about how large would it be and did I have any idea of when.
A. And I believe my response was around 50 billion, but that could be larger or smaller depending upon when. The further out in time it is, the smaller it probably would be. It is part of the evidence that it might be good. So the further out in time that it would be released, the smaller the release size would be. But I said probably in the 50-billion-dollar range and probably sometime mid 2013 at that time when I met with them late July, early August 2012.
We also have this document released in the batch ….John must have not read this one???:
It discusses how the large earnings increases at the GSE’s going forward would be driven by a “large credit loss reversal”. This document is dated July 30, 2012…..BEFORE the NWS was enacted.
At the end of his erroneous piece, John drops this little nugget of indignation on us:
Ugoletti served his country for three decades in the Treasury Department and housing finance agency, an anonymous and hard-working civil servant who never took up the temptation to go off to Wall Street for the big money. And now, after he has retired, he finds himself pilloried by a press either unable to see the basic facts or perhaps bamboozled by hedge fund spin doctors out to destroy his reputation in pursuit of their dreams of avarice.
True, Ugoletti had a job at FHFA for three decades. I’m not sure I’d refer to this as “service” like oh, “serving” in Afghanistan, Vietnam or Somalia or even as a local cop or firefighter but what the heck, we’ll give it to him. The issue lies in the FACT, Ugoletti made false statements under oath. They were false and that is illegal. The obvious next question is “why isn’t Ugoletti being called into court over it????”
The easy answer is Marco retired abruptly, and fled the country (this ironically happened jus two months McFarland gave her sworn testimony above). Where did he go? Ecuador……it also ironically has no extradition treaty with the US.
I’m surprised that wasn’t in John’s article…..(please note dripping sarcasm)