Saturday, February 15, 2014

Berkowitz - Fairholme Funds Common Stock Holdings 02/15/14 01:25:05 PM

Berkowitz - Fairholme Funds Common Stock Holdings 02/15/14 01:25:05 PM


I hub post
Federal National Mortgage Association (FNMA) 
25,990,900 Shares 
$78,233,000 - Purchase Price
$2.65 Average price per share 

Federal Home Loan Mortgage Corp (FMCC) 
19,386,300 Shares 
$56,220,000 - Purchase Price
$3.01 Average price per share 

Total GSE Common Holdings 
45,377,200 Shares 
$134,453,000 - Purchase Price

Primary Source: SEC Filing Date: 2/14/2014 - Period of Report: 12/31/2014

==================================

0000919574-14-001790.txt : 20140214
0000919574-14-001790.hdr.sgml : 20140214
20140214161954
ACCESSION NUMBER: 0000919574-14-001790
CONFORMED SUBMISSION TYPE: 13F-HR
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20131231
FILED AS OF DATE: 20140214
DATE AS OF CHANGE: 20140214
EFFECTIVENESS DATE: 20140214

FILER:

COMPANY DATA:
COMPANY CONFORMED NAME: FAIRHOLME CAPITAL MANAGEMENT LLC
CENTRAL INDEX KEY: 0001056831
IRS NUMBER: 223526594
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231

FILING VALUES:
FORM TYPE: 13F-HR
SEC ACT: 1934 Act
SEC FILE NUMBER: 028-06994
FILM NUMBER: 14616757

FEDERAL NATIONAL MORTGAGE ASSOCIATION COM 313586109 78,233 25,990,900 SH SOLE 1 25,990,900

FEDERAL HOME LOAN MORTGAGE CORP COM 313400301 56,220 19,386,300 SH SOLE 1 19,386,300 0
-------------------------

fairholm is in commons too..
25 million shares is he owns 2% of fannie.

Thursday, February 13, 2014

How Paulson Gave Hedge Funds Advance Word of Fannie Mae Rescue

How Paulson Gave Hedge Funds Advance Word of Fannie Mae Rescue

http://www.bloomberg.com/news/2011-11-29/how-henry-paulson-gave-hedge-funds-advance-word-of-2008-fannie-mae-rescue.html

Its from 2011, but it does not change the facts. 
fannie was 14 a share the saturday before consevatorsip!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Tuesday, February 11, 2014

Pressure Mounts To Return Fannie Mae, Freddie Mac To Owners

Pressure Mounts To Return Fannie Mae, Freddie Mac To Owners


WISE UP!! IF the money sent is seen as payback by courts, commons are wealthy!!!!!!!

WISE UP!! IF the money sent is seen as payback by courts, commons are wealthy!!!!!!!!


In any liquidation, F&F would have cash on hand if they quit paying the dividend to the treasury. lets look at Fannie: treasury is about 117 billion, if courts say this is paid back, by winning for preferred, then even in conservatorship there would no longer be a 10% dividend since the liquidation preference on the senior would be 0, the 10% div would be 0. Ok so we got everything zeroed out, now the money fannie makes would be paid to themselves and start to build. the FHFA could maybe not pay a dividend to preferred, but I would think they will have to from court, but the money builds either way. to the tune of 30 billion a year. now lets say they liquidate Fannie, pay the debts? they have none!! treasury wiped all debt with its shares and 117 billion borrowed. so then we divide the cash up, guess what commons get paid. huge. lets say half the money goes to preferred share. thats 15 bil left for common and with 1 bil common out, $15 a share per year they remain in conservatorship. THERE is no WAY not to pay out the cash to commons. even if govt cashed in warrants, then there would be a takings of 80% of the money from the commons by dilution. I suspect when senior shares are dissolved so will the warrants be dissolved and they are part of the agreement. And when treasury is no longer part of the picture the warrants die when treasury removes their support to the gse's.

Either way In the worst case, liquidation, I'm looking at $15 a share by the end of 2014. commons make as much sense as preferred. IF not more.

Treasury actually “invested” $161 bil, F&F have paid 185 bil

Bryndon ... thank you .... once again for all that you do ......
From pg 27  ..... seems like this alone could have changed everything .... 

"72. The Companies did not receive any consideration for agreeing to the Net Worth 

Sweep. Because the Companies always had the option to pay dividends “in kind” at a 12% 

interest rate, the Net Worth Sweep did not provide the Companies with any additional flexibility 

or benefit. Rather than accruing a dividend at 12% (which never had to be paid in cash), FHFA 

unlawfully agreed to make a cash payment of substantially all the Companies’ net worth each 

quarter."

Also If we had paid dividends in kind  .....  then starting half way down on page 20 ..... But not for the bogus claims that the GSE's would need to draw many more billions of dollars ....  we might have been able to reduce the debt to approximately $161 billion

"reflected actual credit-related losses. To date, the Companies have drawn a total of $187 billion 

from Treasury, in large part to fill the holes in the Companies’ balance sheets created by these 

non-cash losses. Including Treasury’s initial $1 billion liquidation preference in each Company, 


Treasury’s liquidation preference for its Government Stock amounts to approximately $117 

billion for Fannie and approximately $72 billion for Freddie. Approximately $26 billion of these 

combined amounts were drawn simply to pay the 10% dividend payments owed to Treasury. (In 

other words, FHFA requested draws to pay Treasury this $26 billion in cash rather than electing 

to pay the dividends in kind. Had the dividends been paid in kind, FHFA would not have had to 

draw from (and, consequently, reduce the remaining size of) Treasury’s commitment to pay 

them.) Thus, Treasury actually “invested” approximately $161 billion in the Companies, 

primarily reflecting changes in the valuation estimates of assets and liabilities."

Fannie Mae, Freddie Mac ‘Paid’

Fannie Mae, Freddie Mac Could Soon Put ‘Paid’ To Their $187B Bailout


http://www.valuewalk.com/2014/02/fannie-mae-freddie-mac-soon-paid-bailout/

PLS is dead, MBS of F&F is only game in town

                                           2005 2006 2007 2008 2009 2010 2011 2012 2013
FANNIE,FRED&Ginnie Mae 45% 44% 62% 95% 97% 96% 98% 99% 98%
               Private Label         55% 56% 38%  5%   3%   4%   2%   1%   2%

Are they going to shut down the only game in town? I think not!!
Even the new 3 dem plan would have F&F be 33% of the market.
Around 2006 level.
Before the politicians forced F&F to start taking over for the failing Private Label.

Treasury had an agenda against common shareholders

Proof that Treasury had an agenda against common shareholders of the GSEs. 

Credit for this goes to bryndon.fisher over at the google boards. This excerpt comes from the latest court case: Continental Western Insurance Co. vs. FHFA, Watt, US Treasury: 

https://groups.google.com/forum/#!topic/freddienfannie/ivIgTSFGR08 

80. Statements by both FHFA and Treasury provide further confirmation that the Net Worth Sweep violates FHFA’s statutory restrictions as conservator. Treasury, for example, said the Net Worth Sweep would “expedite the wind down of Fannie Mae and Freddie Mac,” and it emphasized that the “quarterly sweep of every dollar of profit that each firm earns going forward” would make “sure that every dollar of earnings that Fannie Mae and Freddie Mac generate will be used to benefit taxpayers.” Press Release, U.S. Dep’t of the Treasury, Treasury Department Announces Further Steps to Expedite Wind Down of Fannie Mae and Freddie Mac (Aug. 17, 2012). Indeed, Treasury emphasized that the Net Worth Sweep would ensure that the Companies “will be wound down and will not be allowed to retain profits, rebuild capital, and return to the market in their prior form.” Id. As early as December 2010, internal Treasury documents acknowledged the “Administration’s commitment to ensure existing common equity holders will not have access to any positive earnings from the [Companies] in the future.” Action Memorandum for Secretary Geithner (Dec. 20, 2010). The Net Worth Sweep thus implemented this internal Administration decision. 

The cited source is a discovery document obtained by the Plaintiff's legal team from the Treasury. It provides direct evidence that 2 years prior to the 3rd PSPA amendment, an internal memo sent by Timothy Geithner (Sec. of Treasury at the time) mandated that common shareholders would see no benefit from any profits generated by the GSEs. This is highly ethically and legally inappropriate and goes against the very essence of free-market trading.

It would also prove that the FHFA was taking direction from another federal agency, which is a conflict of interest and, appropriately so, in stark contravention to HERA.

12 U.S. Code § 4617 - Authority over critically undercapitalized regulated entities


(a)(7) Appointment of the [FHFA] as conservator or receiver
[FHFA] not subject to any other Federal agency
When acting as conservator or receiver, the [FHFA] shall not be subject to the direction or supervision of any other agency of the United States or any State in the exercise of the rights, powers, and privileges of the [FHFA].

This is Treasury's "self-dealing" issue that was raised by Richard A. Epstein.

To David,
Treasury was acting on their own behalf and not shareholder's

Treasury does not have that fiduciary duty. FHFA as the conservator has. Treasury's interest is as a shareholder. The problem is that Treasury's was self-dealing, taking advantage of their position forcing everyone's hand to only benefit itself and not acting in good faith.

Monday, February 10, 2014

Filed 02/05/14 Continental vs. FHFA

Filed 02/05/14

Continental vs. FHFA

https://docs.google.com/viewer?a=v&pid=forums&srcid=MDUxNDQwNjExMTIwMzQzNjc3NDIBMTMzOTU5MDE4MzE5MzUzNDExNjABSGM0eTNDbzlzamdKATQBAXYy


Continental Western Insurance Company (“Continental Western” or “Plaintiff”), by and

through the undersigned attorneys, files this Complaint against Defendants Federal Housing

Finance Agency (“FHFA”), in its capacity as conservator of the Federal National Mortgage

Association (“Fannie”) and the Federal Home Loan Mortgage Corporation (“Freddie”)

(collectively, the “Companies”); Melvin L. Watt, in his official capacity as the Director of

FHFA; and the Department of the Treasury (“Treasury”). Plaintiff seeks declaratory and

injunctive relief (1) to prevent Defendants from giving effect to the so-called “Net Worth

Sweep” purportedly agreed to between FHFA, as conservator, and Treasury in August 2012,

which effectively nationalized the Companies in violation of the governing statute, the

Companies’ contractual obligations, and FHFA’s fiduciary duties to the Companies’ private

shareholders, (2) to prevent Defendants from giving effect to purchases of the Companies’

securities made by Treasury after December 31, 2009, when Treasury’s “emergency” powers to

invest taxpayer funds in the Companies expired, and (3) to cause FHFA, as conservator of

Fannie and Freddie, to cease acting at the direction and for the benefit of Treasury or any other

agency of the United States, rather than Fannie and Freddie, in open violation of the Housing and

Economic Recovery Act of 2008 (“HERA”). Plaintiff also seeks an award of damages against

FHFA for breach of contract, breach of the implied covenant of good faith and fair dealing, and

the improper payment of de facto common stock dividends to Treasury at a time when

contractually senior preferred stock dividends to Plaintiff continue to be unpaid.