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philipmax

philipmax
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  • Senate Staffers 'Do The Hustle' With Fannie And Freddie Shareholders [View article]
    "Existing shareholders of these are just trying to monetize the absurd capital the government is allowing these institutions to play with at the risk to the government and the taxpayer who finances the government."

    You may be right. But, the shareholders own these entities now. The Gov't took advantage of the capital markets in the early 1970's and shoved Fanny into private hands to avoid including Fanny's huge debt load as part of the National Debt. A cute "bookkeeping trick" , yes, but it worked. Fanny and Freddie are now OWNED by their shareholders who took on this debt with the accompanying income stream. So now, as you assert, there is a $5T (some say $9T) on the books of these entities that the Crapo group want to revert to the National Debt. I don't think Congress and Wall Street have a stomach for this. And again, as you assert, there will be a humongous housing deflation should access to F&F's liquidity seize up. The solution is to let the shareholders own these companies. Oh! By the way, the shareholders own these companies and they are worth $trillions.

    Apr 11 03:02 PM | 3 Likes Like |Link to Comment
  • Massive Internet security flaw discovered [View news story]
    If a couple of people start a Class Action suit, this nonsense will stop ASAP.
    Apr 9 09:27 AM | Likes Like |Link to Comment
  • Fannie And Freddie Investors Unite In Washington DC [View article]
    Nationalizing companies is in the province of Fascist and Communist governments. I hope we are not heading in that direction.

    It is downright idiotic to wind down these magnificent companies. Fanny was established, in 1939,to restart a sagging housing economy after the Great Depression. It has worked miracles for 75 years. No other nation has this mechanism in place, nor will they catch up, until some "genius" copies our model. As part of the Treasury, Fanny was seen as a drag on our National debt. While issuing notes to fund the purchase of mortgages creates money, the back-side of the equation is to add debt to the balance sheet. In the early 1970's, the US National Debt was rising out of control. President Nixon and his Treasury decided to spin Fanny out of the Treasury and into private hands. This eliminated about $90 Billion from our Debt, ( a big number then) and the run on the Dollar abated. Nevertheless, the bargain was struck and Treasury no longer owned Fanny (Freddy was created later to avoid the appearance of a monopoly).

    F&F are unique in that they can create money at nearly the same cost as the Federal Reserve. This is the jewel that was taken over in September of 2008. If, today, the government were again to take them over, the National Debt would immediately rise by another $9 Trillion. When we consider that in September 2008, the Treasury added $8 Trillion to our Debt, in a matter of hours, it raised our National debt from $6.5 Trillion to $14,5 Trillion. If Treasury were to take F&F over, our National debt would instantly rise to $23 Trillion. This option is not on the table, and explains why the Government took "only" 79.9% of F&F, to preclude the consolidation of debt with our National debt.

    Should government attempt to wind down these behemoths, there will be no viable substitute for several years... if ever. Moreover, it would cause an ENORMOUS DEFLATION that will inflict a heavy price on an already anemic economy. The money supply will dry up as mortgages are extinguished. It would take ten to fifteen years to wind down these institutions. The process could very well lead to the the Greatest Depression. No one in his right mind should even contemplate this folly.
    Apr 9 03:32 AM | 11 Likes Like |Link to Comment
  • Stock of GSEs is a zero says Lockhart [View news story]
    Agreed! Lockhart is lucky he is not under indictment for malfeasance and robbery of public funds. What was his salary when head of FHFA? Where was he? Why did he wait five years to warn the public? And as you point out, he was the lead cheer leader to mislead thi country in this predicament.
    Apr 4 10:39 AM | 1 Like Like |Link to Comment
  • The Good, The Bad, And The Ugly Of Mortgage Reform [View article]
    There are historical precedents to the Government takeover of private companies in America. All were profitable when taken over.
    In WWI, the US government took over 80% of the railroads in this country because the various competing railroads had an assortment of non-compatible carriages that hampered the movement of war material across the Nation. The railroads were promptly returned to the original owners after the war and after the US had invested many millions in infrastructure to standardize the industry.

    Also, in WWI, the US government took over AT&T as a strategic asset and also returned it, with improvements, to the old shareholders.

    In WWII, General Aniline and Film (GAF) and Bayer Aspirin were confiscated by the US as German booty only to be returned in the 1960's.

    So, there is ample precedent for returning property to its original owners.
    Mar 28 01:14 PM | 9 Likes Like |Link to Comment
  • The Good, The Bad, And The Ugly Of Mortgage Reform [View article]
    It works out that the reformers are contemplating the new entity, to be a... Fanny Mae look-alike. The only news is, that Congress wants to screw current owners. Why can't the "problem" be solved by letting Government quietly walk away from this duly formed private entity. 75 years of success is nothing to snear at.

    Conservatorship is not bankruptcy, its not even a re-organization. It is, by definition, a method to conserve the entity in its present state, to the best of the conservators ability. Well...its done its job, and now it's time for the conservator (Treasury) to back away and release the entities to the rightful owners.
    Mar 28 12:57 PM | 8 Likes Like |Link to Comment
  • Frannie wind-down could spare preferreds; faces hurdles in any case [View news story]
    The whole issue boils down to property rights under the Constitution.

    Regardless of what Treasury did in 2008, the question is, can the government confiscate private property without just compensation?

    Since these companies were never legally declared insolvent, there is no mechanism for any entity, private or public,to take it away from its owners.. unless, by theft.
    Mar 13 02:06 PM | 5 Likes Like |Link to Comment
  • GSE investors head for the exits all at once [View news story]
    Somehow everyone is convinced that the Courts are just and fair; that they will fix any injustices to the shareholders and the public.
    Surprise! The Courts are fickle and unpredictable. That is the scariest aspect of our system. What is patently unjust to one person is perfectly just in another's eyes.
    There are politically appointed Judges who must toe their bosses lines. There are Judges out there who are uninformed, misguided, as well as, doctrinaired, who render incredible decisions. And, yes, there are appeals and more appeals, but these could drag on for generations.
    There has got to be a quicker way to fix this mess. Congress is tainted, the Executive branch is tainted, and the Judiciary is a mystery.
    Mar 12 05:50 PM | Likes Like |Link to Comment
  • Fannie Mae: What To Do After Yesterday's Plunge [View article]
    Good argument, Nate. Also, Hedgies, tend to take one huge dump once they no longer care for the security. Watch for sudden up/down draft on the way to the 6 yr resolution.
    Mar 12 11:08 AM | 1 Like Like |Link to Comment
  • Benmosche talks succesion [View news story]
    I am casting my ballot with this great company. Benmoshe has done a fantastic job of reviving this giant. It is roaring now, and I look forward to a dazzling performance in the coming years.
    Mar 10 11:57 PM | 1 Like Like |Link to Comment
  • JPMorgan's Impending Dividend Increase - What Does It Mean For The Warrants? [View article]
    Thank you Adam. Very Informative and useful.
    Mar 10 09:20 AM | Likes Like |Link to Comment
  • Brown-Forman Corporation beats by $0.06, misses on revenue [View news story]
    In the the famous immortal words "Brown-Forman has been very, very good to me"
    A great family business who care for their shareholders. Thanks for many years of outstanding returns.
    Mar 5 10:17 AM | Likes Like |Link to Comment
  • Fannie Mae wastes little time rebuffing Berkowitz [View news story]
    Shear arrogance. Bluster your way! We are the GOVERNMENT and we can do as we please!!!!
    Mar 4 03:02 PM | 1 Like Like |Link to Comment
  • Berkowitz frustrated with Frannie corporate governance [View news story]
    Dear Deep,
    I like your righteous indignation and rewarded you with a "like". Unfortunate, the Courts are proving themselves incapable of changing the system, or worse, co-conspirators with the perpetrators. As of late, Court decisions have not kept true to this country's Constitution or to the spirit of freedom.
    Mar 3 02:12 PM | Likes Like |Link to Comment
  • GSEs shoot higher on big Bove price target [View news story]
    What we need is to demonstrate that the Feds can't confiscate private property!

    The stockholders own these companies not Uncle Sam. GIVE IT BACK!
    Feb 26 05:31 PM | Likes Like |Link to Comment
COMMENTS STATS
242 Comments
285 Likes