Saturday, March 22, 2014

Just pay fair value for fannie and be done.

Just pay fair value for fannie and be done. the govt should do this!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

why does the government not just pay fair value for the GSE's and nationalize them. ITs the same as the senate bill but would save billions of dollars. our constitution allows it. just pay shareholders fair value.

lets say the new bill would cost the entire mortgage system 100 billion dollars over 5 years to implement, why not just keep F&F, buy out the share holders, and nationalize them. It is the same as the senate plan.

the senate plan wants to get it all for free. but the constitution is at odds with this plan.
ex. if the govt takes over your business or home and writes a law, such as HERA, to put your business or home in conservatorship, then closes your business or knocks your home down, Do you think that is a TAKING under the constitution? of course it is. The constitution is the law of laws, HERA is nothing to these laws, and a taking by the govt by any other name, HERA, is still a govt taking. It does not matter what the law under the constitution says. If they close fannie and strip it of value, they would have to pay a fair price for it at the time of the BUYOUT or the Takeover. This has nothing to do with SP, and everything to do with VALUE. What is a F&F worth? fair market value.?

Ill say 100 billion or more. based on 10 billion a year in earnings, take an average of earnings over the last 10 years, including the down years. seems reasonable. 5 before, 5 after.

A company such as fannie would garner 10 pe on 10 billion a year. making its market value, or fair value 100 billion. im sure there are other methods but this is simple.

How much to convert to senate proposal? ill bet 100 billion at least over the 5 year wind down. Why wind down a perfectly good company that WORKS. this is stupid. FDR created fannie for just this thing. Not to put the govt on the hook for 90% of all mortgages in america. IDIOTS.

so just pay for fannie as the constitution allows 100 billion minus 50 billion for the preferred shares and that leaves 50 billion for commons. 
  • the math on the above would garner about $40 a share for common on 50 billion dollars. And do it much cheaper than corker warner 2 would do. Then for FREE, regulate them and rename them FMIC. That is what the senate bill is doing anyway. Just without following the constitution of the USA by stealing the companies without compensating them. They were sworn to uphold the constitution of the usa when they took the job and they will do that in the end, VIA court ORDER. 
the bill transfers all debt to the USA DEBT. AND makes the FMIC the secondary mortgage market leader. It seems as the govt see's the cash cow and wants to make it its own and reap the reward of the golden goose. banks would still sell their mortgages to the secondary market, and that market would now be the US govt. No longer insulated by a Fannie and Freddie. 

this would be a lot like our govt seizing las vegas casinos and saying they were bankrupt. Take all the money in the future. Its a money grab. If the govt wants a money grab, they take it. This does not mean it is legal and will withstand court scrutiny. 

The USA has become to big for its britches and every sitting politician needs voted out of office. from local to national. this country needs new blood in those chairs. 

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