See: http://washingtontimes.com/upi-breaking/20041217-022819-1300r.htm See: http://www.nypost.com/business/37285.htm See: http://www.chron.com/cs/CDA/ssistory.mpl/business/2967733 See: http://www.washingtonpost.com/wp-dyn/articles/A30435-2004Dec27.html See: http://www.bloomberg.com/apps/news?pid=10000103&sid=aTg9xXdqSuD8&refer=us See: http://www.freep.com/money/business/fannie28e_20041228.htm See: http://www.realestategates.com/News/28122004/fm_comp8964599.html See: http://washingtontimes.com/upi-breaking/20041217-022819-1300r.htm EDITOR'S
COMMENTS The
Kat in the Hat Just Won't Leave! Not only is Top Kat in the Hat making out like the Frito Bandito with freebie health insurance, stock options until the Cow jumps over the Moon, $8.7 million in deferred compensation until 2020 [Someone Ain't Got 20-20!], and a nice $1.37 Million a year pension in perpetuity [ehhh, its called the Demise Clause], there appears to be a Kitty Kat Fight underway as to when the Top Kat in the Hat is supposed to pack bags and shag [Boogie outta here, Baby!]. Gee, Whiz! -- I love a good Kitty Kat Fight! Will Top Cat in the Hat leave Financing the American Dream in January 2005, or will he hang around like an Albatross around Fannie Mae Corporate until June 22, 2005? The five months of disputed time amounts to about $600,000 in CEO salary to Top Kat in the Hat. Most folks work for a living, and work pretty hard at their work to make ends meet to support their families. Likewise, most folks know when they have worn out their welcome. Hey, Folks, $600,000 is nothing to sneeze at... Look at it this way -- the extra five months provides ample time for more Dead Kitty Kats in Fannie Mae's bag of tricks to get tossed out there on the table. We suspect some are already hidden in Rhinestone Cowboy's Saddlebags, perhaps? From Martin Hutchinson's essay linked above, World Capital of Ponzi, we have this little gem of a quote: The stock at $69 Friday was only $11 off its 2004 high, which proves that investors in the 1995-2004 bull market don't care about fraud, so long as the management and brokers tell a good story. In reality, to get back to the (inadequate) capital ratios required by its regulators, Fannie Mae is likely to have to sell about $300 billion of mortgage backed securities, real money in any language. Chief Executive Franklin Raines should certainly go; the question is why the Board of Directors isn't forced to resign en masse, and Fannie Mae stripped of its power to build an asset portfolio. [Editor's Note: This is the second Author I have seen to date who didn't think too much of Fannie Mae's Board of Directors. Now, that makes two!] OK, so Fannie Mae has to raise $300 Billion in Cash to bury the Dead Kitty Kats tossed out on the table so far. Don't look at me to buy any of their securities [or their risky stock about to be diluted!], because there's some more nasty stuff in their bag of tricks -- it is called "OOOOps! Where Did My Loan Loss Reserves Go?" This is similar to: "The Dog Ate My Homework!"
County Road 311, Fulton, Callaway County, Missouri -- Ohio Savings Bank depletes its Loan Loss Reserves to cover Fannie Mae, and Countrywide seals the deal! See: Fannie Mae REO/Foreclosure featured in Toy Boys of Fraud for Ohio Savings Bank, Fannie Mae, Bogus Appraisal, Review Appraisal, and Fulton, MO…. or see you in Church, Hill??? I fail to see profit [or any shareholder value, perhaps?] on making a loan based on a $92,000 bogus appraisal [dare we call it fraud?], and then selling the foreclosed property for $65,700 and chump change [pass the buck to Countrywide, please!]. None of this nasty stuff will get let out of the bag, perhaps, until some of the Big Boys who've been selling this bogus paper to Fannie Mae, have to file a liquidity plan with the Federal Big Boy Regulators [OCC, Federal Home Loan Bank Board, et cetera], since they burned through their loan loss reserves first, not being able to pony up the cash to cover Fannie's Assets [loan loss portfolio]. With the Loan to Deposit Ratio at the 9,079 [oops! 9,025] Federally insured FDIC Institutions, having popped over 1 [1.06 as of June 30, 2004], the prospects for merger and acquisition for the sake of liquidity just may be all the more entertaining in the name of the game is bailout. As of September 30, 2004, the Loan to Deposit Ratio is 1.075! FDIC dudn't calculate the L/D Ratio for folks anymore, as a courtesy not to insult folks' intelligence, hoping that perhaps with a new and improved liquidity plan, the Ole Dudes will forget about it! [Editor's Note: Besides FDIC is broke [under-funded for all those up to $100,000 accounts] anyway and dudn't have the funds to insure every one they say they do in a Liquidity Crisis [bank run]! Welcome to Monty Python's Flying Circus!] See: http://www.fdic.gov/bank/statistical/stats/2004sep/industry.html for September 30, 2004 See: http://www.fdic.gov/bank/statistical/stats/2004jun/industry.html for June 30, 2004 [Take Total Loan $s and divide by [Total] Domestic Deposit $s = Loan to Deposit Ratio.]
Somebody's acquiring someone, since we now have 54 less FDIC insured institutions than as of June 30, 2004! FDIC insured institutions have loaned out 7.5% more than their deposits. If the Loan to Deposit Ratio were 80%, I wudn't be too worried about Fannie Mae and the GSEs -- there is plenty of liquidity to cover their mistakes [the first tier lenders' and Fannie Mae's]. An L/D Ratio of 1.075, however, is tenuous and dicey, in our view, not only making Fannie Mae's stock about the most risky on the planet, with a $300 Billion Dilution Factor, a lost $9 Billion and the Timex keeps on Ticking, and Top Kat and Howard [CFO] bleeding the company dry -- this is probably the best short sale on Planet Earth. Ehhh, should I mention that Messieurs Munger and Buffett at Berkshire Hathaway sold all of their GSE stock way back in 1999? Talk about forward thinking! See: Ole Man Ozark's -- More on Smokin' Them Thar CAMELS Couple these observations with Treasury Secretary's Snow Job on the $615 Federal Deficit, and the US needing $2 Billion a Day from the Kindness of Strangers to keep the Ponzi Shell Game afloat, the potential for Fannie Mae fulfilling the American Dream of 100% homeownership, could just turn into our worst Nightmare on Main Street America. Stanley, your job as the Rhinestone Cowboy is getting tougher by the day -- just how good are you, Judge, at catching falling knives? Ole
Bear, Editor © 2004 Realty Reality |
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What
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