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The proposed rules specifically state this is not an attempt to recap and that FHFA steps aside leaving exiting the conservatorship to Congress/Admin. Also, is it the sum of the risk-based and leverage ratio the total capital required? That would be north of $300 bill. I can't read the 200 + pages.

Emily... hey, Chavez compensated shareholders in the billions after expropriation of PDVSA. Don't you wish we were a little Venezuela that style?

More on that... By John Bancroft [email protected] Fannie Mae and Freddie Mac don’t act like two companies in their 10th year of government conservatorship, waiting for federal policymakers to figure out what to do with them.

We are again at the make-it-or-break-it point with the Jrs. Any bets on who will come out this time to derail us?

The problem with Jerome Corsi is his association with Alex Jones (infowars) who runs an online store selling whey protein products and other supplements. Looks to me infowars is after eyeballs anyway they can get them as that traffic can be turned into leads: protein shakes or other products. Stirring the pot does lead to more eyeballs ($$). I thought the problem with Corsi is that his FnF predictions have all been proven false so far. I don't even know how much access he has. Does anyone who matters actually pay attention to him? This telling word in that last tweet is "please". He's not claiming to have inside information, instead he's asking the administration to stop the sweep. Midas, the only intention here is to move traffic from here to there ("Head of Washington D.C. News Bureau for Alex Jones and infowars", on Corsi's twitter page) hoping for a click on infowars own website or tube channel. And the up-sell! I know all about internet traffic and how to monetize it. I made my bankroll from 1999-2005 monetizing traffic! For our purposes, I would totally and completely ignore Corsi. He is only stirring the pot.

The problem with Jerome Corsi is his association with Alex Jones (infowars) who runs an online store selling whey protein products and other supplements. Looks to me infowars is after eyeballs anyway they can get them as that traffic can be turned into leads: protein shakes or other products. Stirring the pot does lead to more eyeballs ($$).

Just a note.. His statement is pre-Lamberth. A lot has changed since.

also talks about releasing some papers in the near future related to capital requirements Mel Watt Full written statement https://www.banking.senate.gov/imo/media/doc/Director%20Watt%20Written%20Statement%2005222018.pdf Thank you for this link. Watt's last Congress written testimony from 5/11/17 had 2 references to the word "capital". Today's written testimony has 19. It devotes page 1, page 3 (anticipatory to capital framework) and page 4 (Capital framework) out of 6 pages to delineate how the companies had to learn to operate using a virtual framework that mimics business behavior of well capitalized companies operating in the real market. And it adds the fix: instituting -although suspension will continue- new capital frameworks to replace the old ones. These, risk-based and leverage ratio standard, had been anticipated by him on January this year. Important. In spite of Watt trying to remove any ulterior reading, this baby step -soon to be implemented, it appears- will help smooth out a transition to some form of recapitalization, someday. Which doesn't necessarily mean we will be made whole. But knowing precisely how much money the companies will require to operate safely removes a huge obstacle and puts this matter to sleep. Or we can hope. Totally agree. First, the permanent buffers. Soon, specific and precise capital levels needed. We are moving at turtle speed. But in the right direction.

Thank you! I've learned from many myself, here. This is a good place to share ideas with little noise. From some, I gained technical knowledge (lawyers, mortgage professionals). From others, how to improve my investing. I feel gratitude for members who generously share their views. Unfortunately, today I also learned sarcasm is not everyone's cup of tea :( And no more OT writing from me :)

Speak for yourself and keep on trolling! I have been invested on this for close to 8 years, probably done more research than you and may even have more shares than you. Where is your sense of humor? After so much time and struggle a bit of humor can offer relief and a laugh is what I aimed for. But if you insist on being manly we can discuss our differences in person. I live in Miami Beach, FL.

Does anybody here think that throwing lawsuits to the wall to see what sticks may actually be someone's plan to portray shareholders as frivolous clowns hoping for a windfall? Wait... isn't that what we are?

Complete waste of time. The 10ks and I believe the 10qs have always stated there is no such guarantee.

FG= federal government.

Cool. With a couple of thousands like this perhaps there is an answer. Let's just make sure any new complaint is against Freddie Mac and not Freddie Max.

If you want an article that attempts to kill the rally, look no further than this. Ideologically fueled nonsense that starts with the assumption that FnF were a cause of the financial crisis, and manages to assert that the proper way to run a federal conservatorship is to shrink the companies' footprint. https://www.forbes.com/sites/norbertmichel/2018/05/22/is-mel-watt-setting-up-another-bailout/#2e174f861572 I thought Joe Light's piece was actually rather informative, and not slanted against shareholders as he sometimes is. Joe Light's: "with no end in sight, why hold?" So both paths lead to Rome. But you are right, Forbes' is nothing but vague. This administration has proven they aren't backing off from goals they have set in spite of resistance. If one of these is to get the companies out of government control they will railroad anybody/everybody no matter how many articles are published to shape public (or Congress) opinion. We just don't know if this specific goal continues to exist.

https://www.bloomberg.com/news/articles/2018-05-22/groundhog-day-at-fannie-freddie-where-the-fix-is-always-tomorrow Like clockwork. Here is the kill-the-rally article we were all expecting. Joe Light's timing is always marvelous. Or is it Treasury's?

I believe in one document among the miriad of documents produced in the many lawsuits Joe Light shows up as *access* journalist with a direct line to Treasury. That is, Obama's T. Maybe he still thinks he has that privilege.

We may be underestimating the role of Brian Brooks. At some point, his name made the circles as one possible Under Secretary of Treasury. According to Joe Light, he has actually become an unofficial emissary spearheading a specific housing goal straight from the inside. And we already know he is a Mnuchin's man. Even if JL/Bloomberg aim is to undermine administrative action by exposing illegal lobbying, how likely are they to succeed when the most important congress actors are hitting the exit door and the appetite for a new, more stringent Jumpstart is probably missing? If Brian Brooks has really been knocking doors for months now maybe there is some sense of urgency somewhere in the administration. As in "no need to wait for another Congress".

A surprise. Thanks. Interesting this comes at a time when the real estate market looks to be at the end of the line, judging by phm, dhi, bldr, nvr, len and other related stocks including wood and the price of lumber. I can't see the real estate market escaping the next recession whether later this year or next. C Changing direction, is this Joe Light article a move to expose the behind the scene maneuvering right before next week's hearing? And will Brian Brooks be the administration's appointee to head FHFA next year?

except i didnt see the judge concerned with nationalization buying it And wouldn't that argument be analogous to something like: "I didn't steal your property, I just took it but I could return it under some nebulous circumstances thus absolving me of theft". as i recall this was from ms wright, treasury counsel, who was hardly inspiring confidence. it was a very weak response, which only added to her lack of credibility imo You are all correct. But we better be lucky.

Treasury's argument that a recovery for shareholders is possible (unknown and un-timed) is a straight arrow to the heart of the nationalization argument by plaintiff, so it is worrisome. Not to mention an acceptable delay strategy, as a recovery might be possible... within the next 1000 years.

Thank you!

Chris, do you think the conservator swipes everybody's rights, inlcuding Board and management? Then, at the conservator discretion, some tasks can be chosen to be delegated. Like day to day operations and some functioning of the board. This means FF really do not really exist, only FHFA in their place, as long as there is a conservatorship. Am I reading the law the wrong way? Also, doesn't a derivative suit happen only when the principal actor is unable to suit? Meaning, FF can't sue so shareholders seek a derivative suit but if FF are included, this denies "derivative". I haven't read the filing so I am speaking out my behind :) Oh, and like Locus.. I can't keep quiet.

I find this hard to believe. In cship, the conservator steps into their shoes. Same reason why Berkowitz letter to the Boards many years ago was completely ignored.

Thanks for posting this. Yes, the situation is almost 100% political. Outside of politicians, only the courts potentially have a say and waiting for them would try the patience of Job. Parrott and Zandi actually acknowledge that FnF's affordable housing mandates did not contribute to the financial crisis, even showing links to independent studies in footnote 8. And yet immediately afterward they still argue that a conservative FHFA director would ignore that and continue the false narrative to justify shrinking the GSEs. They don't think Treasury can amend the terms of the SPSPAs to cancel/redeem/etc the seniors because of restrictions on the government's ability to “compromise a debt”. But the seniors aren't debt, they're equity! Box 2, criticizing the Moelis plan, has a few errors. It assumes that Treasury's backstop would remain in force in perpetuity, while Moelis actually provides for new equity capital to stand in front of Treasury while winding the backstop down over time. It also assumes that the duopoly of FnF is an inherent problem, not mentioning why it's bad. The paper also talks about Treasury selling its interest in the companies, but it confuses the senior prefs (which would be gone) with the warrants (which would be exercised). Box 3 says that in another crisis, 2/3 of FnF's losses would be borne by private investors, but the next paragraph says that the companies are transferring just over 1/4 of the risk. How do those numbers reconcile? They don't address current shareholders at all. Not that I expected them to, just noting the continued insistence that we don't matter. I think the most interesting aspect of this paper is the foregone conclusion that administrative action is coming. To find clues on what this may entail focusing on Jerome Powell is a must. He has been explicitly vocal about the GSEs and has been hand-selected by Mnuchin. Jerome Powell and Mnuchin -and the new FHFA Director as a follower- will set the tone. JP wants a smaller foot-print for sure and no duopoly.