A GAAP in our Fannies Value
Jonathan Weil at Bloomberg probes our Fannie further in Mind the Fair Value, Not the GAAP.
Fair-value changes for Fannie are more informative than its results under generally accepted accounting principles.
Fannie Mae, reported a net loss of $3.55 billion for Q4 and a $2.05 billion net loss for 2007.
Fannie lost $13.4 billion last year, according to the annual report it filed yesterday.
Thats GAAP which excludes the effect of capital transactions, such as the $7.5 billion of preferred stock...
that Fannie issued last quarter when it needed to raise capital to stay above its regulatory minimums.
Fannie estimated that the fair value of its net assets was $35.8 billion at Dec. 31, down from $43.7 billion a year earlier.
The $35.8 billion of shareholder equity at fair value consisted of $20.5 billion of common shareholder equity and $15.3 billion of preferred shareholder equity.
A year earlier, by comparison, the fair value of Fannie's common equity was $34.7 billion, while the fair value of the preferred was $9 billion.
So in fair value common equity... Fannie lost $14.2 billion last year. Which means the share holders are losing control of the GSE rapidly.
The Nattering One muses... Liar, liar...
Fannie's CEO, Daniel Mudd, yesterday said the company has "no current plans to go back to the market for capital."
As reported yesterday OFHEO is increasing FNMA's portfolio cap, allowing them access to $18 billion for lending purposes.
In order to make the loans, Fannie will have to bolster reserves to the tune of $15 billion with another preferred stock sale.
Fannie stock is overvalued... Even after losing half its value during the past year...
Yesterday, the company's shares closed at $27.27, up 30 cents, giving Fannie a $26.7 billion market capitalization...
which is $6.2 billion more than the common fair market stockholder equity.
Fannie Underwater... Fannies market cap is $9.1 billion less than the total outstanding stockholder equity.
Sinking Fannie... wait until the jumbo liar loans get shifted onto FHLMC & FNMA later this year.
We expect the "economic stimulus" bill;
AKA The Great Wall Street Banking Bailout & White Collar Real Estate Speculators Welfare & Enablement Bill...
will result in losses which render both GSE's insolvent.
Fair-value changes for Fannie are more informative than its results under generally accepted accounting principles.
Fannie Mae, reported a net loss of $3.55 billion for Q4 and a $2.05 billion net loss for 2007.
Fannie lost $13.4 billion last year, according to the annual report it filed yesterday.
Thats GAAP which excludes the effect of capital transactions, such as the $7.5 billion of preferred stock...
that Fannie issued last quarter when it needed to raise capital to stay above its regulatory minimums.
Fannie estimated that the fair value of its net assets was $35.8 billion at Dec. 31, down from $43.7 billion a year earlier.
The $35.8 billion of shareholder equity at fair value consisted of $20.5 billion of common shareholder equity and $15.3 billion of preferred shareholder equity.
A year earlier, by comparison, the fair value of Fannie's common equity was $34.7 billion, while the fair value of the preferred was $9 billion.
So in fair value common equity... Fannie lost $14.2 billion last year. Which means the share holders are losing control of the GSE rapidly.
The Nattering One muses... Liar, liar...
Fannie's CEO, Daniel Mudd, yesterday said the company has "no current plans to go back to the market for capital."
As reported yesterday OFHEO is increasing FNMA's portfolio cap, allowing them access to $18 billion for lending purposes.
In order to make the loans, Fannie will have to bolster reserves to the tune of $15 billion with another preferred stock sale.
Fannie stock is overvalued... Even after losing half its value during the past year...
Yesterday, the company's shares closed at $27.27, up 30 cents, giving Fannie a $26.7 billion market capitalization...
which is $6.2 billion more than the common fair market stockholder equity.
Fannie Underwater... Fannies market cap is $9.1 billion less than the total outstanding stockholder equity.
Sinking Fannie... wait until the jumbo liar loans get shifted onto FHLMC & FNMA later this year.
We expect the "economic stimulus" bill;
AKA The Great Wall Street Banking Bailout & White Collar Real Estate Speculators Welfare & Enablement Bill...
will result in losses which render both GSE's insolvent.
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