Too Much To Cover
There has been a massive flurry of activity over the last week and I cannot possibly cover it all here now. Much of it is centered in a volley of Amicus briefs that were filed in the “Perry Injunction Appeal”.A short book could easily be written about several bombshells that were unveiled. I highly advise everyone to read all of the briefs as they present some overwhelming evidence rendering our government’s lawless actions bare.I will be covering several of the key points found within them soon.
I have worked with Adam and Mike to simplify the Forensic accounting papers and provide a short intro letter.We understood that many of the bold conclusions and accusations were distracting from some of the concrete explosive facts that this work contained.We will build on this going forward and try to break things down and walk people through what can be a complex maze our government has created with their many lies. I have attached the simplified version as a PDF and cover letter below.
Tonight I want to cover one of the most influential Amicus’s filed in the Perry Injunction by the National Black Chamber of Commerce (“NBCC”).
7:15 NBCC Amicus brief (Full Amicus PDF)
Black America is clearly zeroed in on the truth as to what is truly at stake in the battle over Fannie and Freddie. President Obama went to great lengths to deceive them and keep them in the dark as to his true intentions and the dire consequences his reckless actions would bring upon them. I was honored to have been told of the profound effect my work has had and will fight till the end to provide the truth until our President is able.
A Little About The NBCC:
STATEMENT OF INTEREST OF AMICUS AND AUTHORITY TO FILE
Amicus curiae the National Black Chamber of Commerce (“NBCC”) is a nonprofit, nonpartisan organization dedicated to the economic empowerment of African-American communities through entrepreneurship.1 Incorporated in 1993, the NBCC represents nearly 100,000 African-American owned businesses and advocates on behalf of the 2.1 million black-owned businesses in the United States. The NBCC has more than 190 affiliated chapters located throughout the nation, as well as international affiliates in, among others, the Bahamas, Brazil, Colombia, Ghana, and Jamaica.
Game Changing Excerpts
“Fannie Mae and Freddie Mac play a vital role in minority communities by expanding access to credit and ensuring affordable housing. If allowed to stand, the Government’s “Net Worth Sweep” and winding down of Fannie and Freddie will damage those communities by drying up credit and denying African-Americans and other minorities the opportunity – and dream – of home ownership.”
“Home Mortgages Are Increasingly Scarce In Black Communities Because African-Americans Do Not Have Full Access To The National Mortgage Market.
The mortgage market already fails to provide equal credit access to communities of color and low-income families. Subprime lenders targeted Black communities for predatory mortgage loans, meaning that the impact of the foreclosure crisis fell disproportionately on African-Americans. Many Black families lost their life savings as housing prices plummeted and lenders refused to refinance loans in African-American neighborhoods. While others have regained access to credit after the financial crisis, African-Americans are increasingly shut out.”
“The NBCC submits that home ownership is central to the American Dream, not a privilege reserved for the fortunate few.”
“The liquidation of Fannie and Freddie without a suitable alternative will destroy the housing market for minorities and will have a devastating impact on the overall U.S. economy. With rising inequality at the forefront of the national consciousness, this Court should not sanction such a reckless public policy.”
Fannie and Freddie are stronger and safe than ever before
“The NBCC respectfully submits that liquidation of Fannie Mae and Freddie Mac is neither necessary nor appropriate under the circumstances. A flurry of legislative and regulatory activity—including HERA—were undertaken to course-correct and deal with the problems that originally led to the subprime mortgage crisis. Those efforts have been successful. The conditions that led to the crisis no longer exist. HERA in particular was designed to restore confidence in Fannie and Freddie by strengthening regulations and recapitalizing the companies. And it has worked. Fannie and Freddie have returned to long-term financial stability—but for the Net Worth Sweep challenged in this appeal, they would be posting substantial profits. There is, quite simply, no sound justification for the attempted liquidation.”
The words above present President Obama with no choice but to reverse course and preserve Fannie and Freddie for those who worked so tirelessly to get him elected.Trevor and I will be presenting a paper in the next few weeks that will outline the massive political ramifications that will come to bear if Obama does not do the right thing regarding Fannie and Freddie. They are far-reaching, and Hillary 2016 will pay a dear price if the wrong decisions are made. I applauded the NBCC for having the courage to stand up and speak the truth.
Simplified Forensic Accounting Paper And Intro:
A Forensic Look at the Fannie Mae Bailout 20150708 FINAL_ND
The forensic accounting seems to have permeated many areas of our cause. From the Fairholme Lawsuit to the Perry Injunction Appeal we have witnessed a wave of activity since the release. The incredible new revelations have been the topic of discussion amongst numerous journalists and have already spawned some excellent articles.
Original Cover Letter 7/9/16
The forensic accounting of Fannie Mae has generated quite a bit of interest since its release. For the sake of simplicity and clarity, we have stripped all of the bold conclusions and accusations from the analysis.
Whether you believe that Bush/Paulson sincerely believed that Fannie Mae “might” need more capital to get through the crisis is irrelevant for purposes of this discussion. For now, let’s give them the benefit of the doubt and say that they truly believed that Fannie’s exposure was likely to be far greater than it was.
We want to bring your attention to a key fact that we have proven:
If Treasury had extended a $200 billion dollar line, the GSEs would never have had to draw a penny.
We realize that many others before us have raised similar ideas, but up until now, no one had determined exactly how much money Fannie Mae would have actually required to meet its obligations. I think most people just assumed that the GSEs would surely have needed some financial assistance in light of the magnitude of the crisis.
The simplified overview of what our analysis proves is as follows:
In 2008, Fannie and Freddie were placed into conservatorship amid growing concerns that they didn’t have enough capital to weather the storm. Billions of dollars were injected into Fannie Mae because of the perception that they would suffer huge losses.These losses never materialized, and the money was simply sent back to Treasury with sizable interest.
The loss estimates that Treasury and the FHFA used have proven to be grossly exaggerated, hysterical even. As soon as the massive loss estimates were reversed, massive profits were realized.The funds that Treasury forced Fannie Mae to take to cover these potential losses simply weren’t needed.
The bombshell of our extensive research is that Fannie Mae’s profits and capital were sufficient to cover all obligations without drawing one penny from Treasury throughout the entire financial crisis.
I challenge you to find one article from a mainstream financial media source that makes the claims that we make here. You just won’t. Some of our opponents immediately tried to discredit our facts with the rebuttal that Fannie and Freddie needed the billions from Treasury to continue to roll over their short-term debt.This argument was handily smashed by David Fiderer and Jody Shenn. They make it explicitly clear that in September of 08 the GSEs had no issues funding their short-term debt at all. If anyone has questions, please feel free to send Mike or Adam an email. We will also be putting together a short paper explaining this issue in detail.
In summary, what all this means is that not only did Fannie Mae have enough capital and profits to muscle through the crisis, but it has also given a hefty return to Treasury for providing a backstop it didn’t need. How can one have an honest debate about the future of housing finance in America when a fact this big is not known?
Revised Final Cover letter with Edits by Mike Ciklin:
A Quick Note – July 10, 2015
“A Forensic Look at the Fannie Mae Bailout” has generated some interest since its release. For the sake of simplicity and clarity, we have stripped out all of the conclusions. Whether you believe that Bush/Paulson/Geithner sincerely believed that Fannie Mae “might” need more capital to get through the crisis is irrelevant for purposes of this discussion. For now, let’s give them the benefit of the doubt and say that they truly believed that Fannie’s exposure was likely to be far greater than it was.
We want to bring your attention to a key fact that an honest look at the math provides: If Treasury had extended a $200 billion dollar line of credit to the GSEs, they would never have had to draw a penny.
We realize that others have discussed similar ideas, but no one had completed the requisite accounting exercise to determine how much money Fannie Mae would have truly required to meet its obligations. Most people just assumed that the GSEs would surely have needed some financial assistance in light of the magnitude of the crisis.
The basic overview of what our analysis proves is as follows:
In 2008, Fannie and Freddie were placed into conservatorship. Billions of dollars were injected into them as a result of non-cash accounting items. Losses never materialized and the money was sent back to Treasury with sizable interest. All in all, the funds that Treasury forced the GSEs to take simply weren’t needed.
The bombshell of the extensive research is that Fannie Mae’s profits and capital were sufficient to cover all obligations without drawing one penny from Treasury throughout the entire financial crisis. Some immediately tried to discredit this fact with the rebuttal that Fannie needed billions in order to roll over its short-term debt.
David Fiderer and Jody Shenn handily struck down this assertion. In September of 08, the GSEs had no material issues funding their short-term debt.
In order to have an honest debate about the future of housing finance in America, people must know the facts. The facts presented here should materially alter the debate.
MVI is providing a perfect atmosphere to conduct our campaign. I am feeling more refreshed by the day.its shaping up to be a wonderful summer. Keep the Faith!