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. 

Corker Warner 2

Corker Warner 2, 

I think someone should slap these senators for just being stupid. Tim Johnson is retiring at end of 2014 and he does not care if fannie or freddie are treated fair, he just wants a big new law with his name on it. Legacy. As for Capro he is a republican and he does want F&F shut down. He wants to create an EVEN bigger government MORTGAGE backing and support it with the FULL USA pocket book. So instead of offering a catastrophic insurance and having fannie and freddie recapitalize, they want to put 5 trillion on the U.S. budget. If that is not enough, they want to make it harder to regulate the Interest rates that banks can and will charge for the added protection from the U.S. govt 90% backstop to the BANKS that were Too Big to Fail. How quick everyone forgets about the bailouts that the banks got that made F&F bailout look cheap. 
How quick everyone forgets how the banks all pony up to the lawsuits for fraud and pay 10 cents on the dollar to get out of those lawsuits. How quick these senators want everyone to forget that F&F did not write a single mortgage and how they saved the USA from collapse. Well this blogger has not forgot, and would like to tell these senators they are wrong and adding 25% more debt to the nation by TAKING what does not belong to them, is breaking the constitution and is selling the lower and middle class down the river for the TBTF banks that we all dislike and distrust. We are all fully aware the private money they want back in the system is the banks money and that is not going to happen under corker warner 2. No one wants a government takeover of their bank in 5 years when fannie and freddie are gone and no longer here to save america the next time.