Saturday, November 29, 2014

Both Fannie and Freddie have DTA still = $61 Billion dollars

Freddie: 2014 Q3

Deferred Tax Assets and Liabilities
We had a net deferred tax asset of $ 18.5 billion and $ 22.7 billion as of September 30, 2014 and December 31, 2013 , respectively.
We determined that a valuation allowance against our net deferred tax asset was not necessary at September 30, 2014 . See "NOTE 12: INCOME TAXES" in our 2013 Annual Report for additional information.
Fannie: 2014 Q3

Deferred tax assets, net  42,757

So for the record,
Freddie has $18.5 billion in DTA left,
Fannie has $42.7 billion in DTA left.

Now the real question is why hasn't the FHFA taken this money from these two if they intend to close them down? This is an additional $61 billion dollars that could be taken from the two.

It appears the FHFA has chosen NOT to take this money, when it is apparent they could. I suspect the FHFA and Treasury did not want to seem greedy, Or they left them this to use for recapitalizing the firms.

From 2008, Fannies minimum capital:
Our core capital as of June 30, 2008 was $47.0 billion, $14.3 billion above our statutory minimum capital requirement and $9.4 billion above our regulator-directed 15% surplus requirement. We currently expect that we will remain above our regulatory capital requirement for the remainder of 2008.

So by law, Fannie needs $38 billion to be fully capitalized, and what do you know? Fannie has $42 billion sitting in their DTA. Coincidence? I dont think so. 

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