Two weeks ago, Treasure Dept. revises payment terms for Fannie and Freddie. Instead take in 10% of total Draw from Treasure Dept. as dividends for those senior preferred stock, Treasure Dept. will take all future earnings from those two companies as the dividends to exchange when they can not meet the dividend payments they don't need to draw more funding from Treasure Dept..
It looks like Treasure Dept. willing to accelerate to get bail-out money back. During second quarter, both companies combine made 8 billion dollars. Total draw is 188.4 billion and accumulated dividend payment is 45.7 billion, the balance of 142.7 billion need another four and half years to finish the job (if they can make 8 billion every quarter). After they pay 188.4 billion dollars dividend, they still owe Treasure Dept. 188.4 billion dollars capital.
Freddie Mac has twenty issues of preferred stock(not the senior preferred stock Treasure dept. owned)outstanding, total face value is 13.1 billion dollars. If Fed. close the shop after collect 72.3 billion dollars(which Freddie Mac owe and already paid 20.1 billion dollars dividend) as dividend, that will leave nothing for preferred and common stock owners, if Fed. sell Freddie at or under 72.3billion, still leave nothing for preferred and common stock owners( Fed. will take away the money as senior preferred stock capital). If Fed. sell Freddie between 72.3 and 85.4 billion, then preferred stock owners can get part or all face value back, but still leave nothing for common stock owners. Anything over 85.4 billion, then common stock owners have chance to share it remain.
The future of Fannie and Freddie is extremely uncertain. We don't know Fed. going to change payment terms again or not. We don't know when or how Fed. going to wind down them either.
兩週前,美國財政部改變房利美和房地美之特別優先股的股利其付款方式. 從前是年率10%,現在是將每季盈餘全部上繳給財政部作其特別股利,來交換當他們賺得不夠付特別股利時,不用再向財政部支款.
看來財政部想將對兩房的支援款全數儘快收回.第二季兩房共賺80億美元,共欠財政部1884億元,已共付457億元特別股利,剩下的1427億還得四年半才能完工(如果每季都能賺80億).在他們付了1884億特別股利後,仍欠1884億本金.
房地美在外有二十種一般優先股(不是財政部那種特別優先股),全部面額為131億.房地美欠財政部723億,已付201億特別股利.如果財政部在收完723億股利後將其關店,那一般優先股及普通股的股東什麼都沒有,如果將其賣掉在723億或以下,他們還是什麼都沒有(因為會被財政部當所欠本金全部收回),如果賣掉在723億和854億之間,一般優先股的股東可收回部分或全部面額,但是普通股的股東仍一無所有,只有在超過845億以上,普通股的股東才有機會分到超出的部分.
兩房的前途極不確定.我們無法知道聯邦政府會不會再改變支付特別股利的方式,也無法知道什麼時候或什麼方式被處理掉.
2012年6月1日 星期五
What is the best way for Uncle Sam to exit G S E (government sponsor enterprises) 美國政府脫身於房利美(Fannie Mae)和房地美(Freddie Mac)之最佳方法
Before this year's annual meeting of Berkshire Hathaway, Mr. Buffett let shareholders submit two questions each person by e-mail to three financial journalists.Each journalist chose a dozen or so questions for Charlie and Warren to answer. I did submit my questions, but had not be chosen.
My two questions are 1)What is the best way for Uncle Sam to exit G S E (Government Sponsor Enterprises-specially Fannie Mae and Freddie Mac)? 2)How to resume profitability for them?
From my personal opinion, actually, the second question is the answer for the first one.When Fannie and Freddie begin to make profit , they can start to pay some rescue funding back to U.S.Government which carry 10% dividend due to The Treasure Department. It may take many years to pay back the rescue funding in full. But when it is done, Fannie and Freddie should enhance their capital first, after that, They can start to sell corporate bond without government's back-up, gradually increase the amount until they get all the funding they need and gradually decrease the one that guarantied by government til it is zero.At the mean time, Uncle Sam can sell his shares(79.9%) on the market. This may not only be the best way for Uncle Sam to exit G S E, but could be very profitable too. Or nobody bother to change anything anymore, they can simply continue their business as usual(the rate of the bond that government guarantied is lower than the one without).
How about the second question? It's very hard, but possible.It already happen on Fannie's first quarter result.
Usually,both Fannie and Freddie can make net interest income. The losses after housing bubble burst mainly from 1)much higher foreclosure expenses, 2)much higher credit loss provision, 3)huge comprehensive loss, 4)senior preferred stock dividend. For these four items, if we can eliminate or reduce them, the net earnings will be sustainable.
Let's analyse each one of them individually to see we get any chance or not.
1)On March 31,2012, the serious delinquency of Fannie is 3.67%(it's 5.47% on March 31,2010) and Freddie's is 3.51% , which are much lower than U.S.mortgage market's 7.73% on December 31,2011. That is why their foreclosure expenses are reducing. It won't be zero,but could be much less.
2)Because the lower foreclosure rate. It's not only reduce the expense but reduce the requirement of credit loss provision. That's why we start to see they put less money in it. If the rate keep going down to less than 2%, they may not need to put any extra money in, even may take some money out as profit. Right now, Fannie has 74.6 billion and Freddie has 38.3 billion credit loss provision.
3)When housing market tumble , for those mortgages without or with little down-payment, need to be booked the discrepancy between purchase price and market value as comprehensive loss(unrealized loss).That is the major reason for them to have U.S.Government bail-out. When housing market recover, it can be booked as comprehensive income until wholly recovered. Lately we see comprehensive income instead loss.
4)At present time, Fannie has 117.1 billion bail-out funding from Treasure and Freddie has 72.3 billion. They need to pay 10% dividend annually on these senior preferred stock. When all incomes combined can off set this dividend, then we can say they stop bleeding, they are not required withdraw any more funding from Treasure. As soon as they have healthy balance sheet and cash flow, they should start pay back money to Treasure. This way, they can reduce those very expensive dividend to save money and could use it to pay back more until it all gone.
Even they have chance to stand up themselves again. It may need many many years. Recently, we see good signs and bad news.
Report from National Association of Realtor, April existing home sales was 4.62million units annual rate. It's up 3.4% from March's 4.47million and up 10% from a year ago. The median price was $177.400, up 10.1% from a year ago.
Report from Commerce Department, April new home sales was up 3.3% from March to annual rate of 343,000 units and up 9.94% from a year ago. The median price was $235,700, a slight increase from March.
According to the S&P/Case-Shiller 20-city home price index, home price in March fell just 0.03% from February,and after adjusting for seasonal factors , they rose 0.09%. That flat index in March is seen as good news; prices are down roughly 35% from their peak in 2006. In the first three months of this year, average sale price fell 2% from the fourth quarter of last year and 1.9% from a year ago.
The bad news is not from domestic, it is from Europe. Euro zone crisis look like endless drama. Nobody can really figure out what's the total damage for Greece to exit Euro zone, but something for sure is that will slow down economy recovery worldwide. Even may be some area go back to recession.
在今年波克夏股東大會舉行之前, 華老讓股東們每人可經由電子郵件給三位財金記者提出兩個有關問題. 每位記者選出十來個問題讓查老(Charlie Munger)和華老(Warren Buffett)來回答.
我也提出兩個問題,但是沒有被選上.第一個問題是"什麼是最好的方法讓美國政府離開政府支援事業(Government Sponsor Enterprises 特別是指房利美和房地美)". 第二個問題是"如何讓他們恢復獲利能力".
實際上,我個人認為,第二個問題就是第一個問題的解答. 當房利美和房地美開始恢復盈利時, 他們可以逐漸償還政府借給他們的救援金. 該救援金的利息為年率百分之十. 可能須要許多年才能還清. 一但還清,首先應該強化他們的資本結構. 之後, 開始發行無政府保證的債劵, 逐漸增加直到可以取得足夠的融資, 並逐漸減少發行有政府保證的債劵直到完全沒有. 此時, 美國政府可以逐步分批將手中的購股權(佔全部發行股份的79.9%)賣還給房利美和房地美, 或是在市場上出售. 這不僅可能是最好的方法讓山姆大叔離開政府支援企業, 說不定還可以大賺一票. 要是那時候沒有人在乎政府支援企業是否存在, 那他們繼續照舊營業便是(有政府保證的債劵利率要比沒有政府保證的來得低).
那麼第二個問題呢? 是很困難, 但有可能. 房利美在今年第一季已達到.
通常兩房(房利美和房地美)都會有淨利息收入. 房市泡沫化後,他們的損失主要源於 1)過多的法拍損失, 2)須要過高的壞帳準備, 3)資產市場價格的帳面損失, 4)特別優先股的股利.
讓我們逐項分析. 看看是否有機會讓他們持續地轉虧為盈.
1)今年三月底時,房利美的嚴重違約率為3.67%(二零一零年三月底時為5.47%),房地美的則是3.51%,比起二零一一年底美國房貸市場的7.73%少了不少. 因此我們開始看到法拍的損失減少. 法拍損失不會完全消失, 但是可以減少很多.
2)當法拍率降低後, 不只是法拍損失減少,所須壞帳準備亦可減少. 因此兩房的壞帳準備提列亦較為減少. 當法拍率降至2%以下, 不只是可以暫停提列壞帳準備,甚至於可以取出一些作為當季的利潤. 目前房利美有七百四十六億的壞帳準備, 房地美有三百八十三億.
3)房市崩盤後, 那些自備款很少或是沒有自備款的房貸, 須將購買價和跌落後的市場價之差異, 列為當季的虧損.總虧損大於淨資產時, 要麼倒店, 要麼有大佬出錢支持. 兩房倒不起, 所以山姆大叔無限支持. 當房市止跌回升時, 可將增值的部分列為未實現利潤, 直到市場價回到購買價時. 近來, 開始看見未實現利潤取代了未實現虧損.
4)目前房利美有一千一百七十一億, 房地美有七百二十三億是向財政部週轉來的.對於這些特別優先股,兩房是要年付百分之十的股利. 只有在當其它收入總合起來夠付這特別股利後,我們才能說兩房止血了,並且不須再向財政部提領更多錢. 只要他們的財務和現金流量夠健康. 當應儘快地還錢給財政部. 這樣省下的股利, 可以還更多的錢. 直到付清為止.
雖然他們有機會再站起來, 但是須要許多許多年. 近來, 我們看到好的徵兆, 但也有壞消息.
全國房地產協會報告; 四月成屋銷售年率為四百六十二萬棟, 比三月的四百四十七萬棟增加3.4%,比一年前高出10%. 中間售價為$177,400 高出一年前10.1%.
商業部報告;四月新屋銷售年率為343,000棟, 比三月增加3.3%,比一年前高出9.94%. 中間售價為$235,700 比三月略高.
史丹普爾的凱斯希勒房價指數, 在三月中比二月降了0.03%, 經過季節調整後, 則升了0.09%. 這可視為好消息. 三月房價比2006年高峰時降了約35%. 今年第一季平均售價比上一季降了2%,比去年同期降了1.9%.
壞消息並非來自美國國內. 而是來自歐洲. 歐元區危機好像是無止境的戲碼. 無人能預估希臘脫離歐元會帶來的損害. 可預測的是一定會減緩經濟復甦的步調. 甚至有一些區域會再進入衰退.
My two questions are 1)What is the best way for Uncle Sam to exit G S E (Government Sponsor Enterprises-specially Fannie Mae and Freddie Mac)? 2)How to resume profitability for them?
From my personal opinion, actually, the second question is the answer for the first one.When Fannie and Freddie begin to make profit , they can start to pay some rescue funding back to U.S.Government which carry 10% dividend due to The Treasure Department. It may take many years to pay back the rescue funding in full. But when it is done, Fannie and Freddie should enhance their capital first, after that, They can start to sell corporate bond without government's back-up, gradually increase the amount until they get all the funding they need and gradually decrease the one that guarantied by government til it is zero.At the mean time, Uncle Sam can sell his shares(79.9%) on the market. This may not only be the best way for Uncle Sam to exit G S E, but could be very profitable too. Or nobody bother to change anything anymore, they can simply continue their business as usual(the rate of the bond that government guarantied is lower than the one without).
How about the second question? It's very hard, but possible.It already happen on Fannie's first quarter result.
Usually,both Fannie and Freddie can make net interest income. The losses after housing bubble burst mainly from 1)much higher foreclosure expenses, 2)much higher credit loss provision, 3)huge comprehensive loss, 4)senior preferred stock dividend. For these four items, if we can eliminate or reduce them, the net earnings will be sustainable.
Let's analyse each one of them individually to see we get any chance or not.
1)On March 31,2012, the serious delinquency of Fannie is 3.67%(it's 5.47% on March 31,2010) and Freddie's is 3.51% , which are much lower than U.S.mortgage market's 7.73% on December 31,2011. That is why their foreclosure expenses are reducing. It won't be zero,but could be much less.
2)Because the lower foreclosure rate. It's not only reduce the expense but reduce the requirement of credit loss provision. That's why we start to see they put less money in it. If the rate keep going down to less than 2%, they may not need to put any extra money in, even may take some money out as profit. Right now, Fannie has 74.6 billion and Freddie has 38.3 billion credit loss provision.
3)When housing market tumble , for those mortgages without or with little down-payment, need to be booked the discrepancy between purchase price and market value as comprehensive loss(unrealized loss).That is the major reason for them to have U.S.Government bail-out. When housing market recover, it can be booked as comprehensive income until wholly recovered. Lately we see comprehensive income instead loss.
4)At present time, Fannie has 117.1 billion bail-out funding from Treasure and Freddie has 72.3 billion. They need to pay 10% dividend annually on these senior preferred stock. When all incomes combined can off set this dividend, then we can say they stop bleeding, they are not required withdraw any more funding from Treasure. As soon as they have healthy balance sheet and cash flow, they should start pay back money to Treasure. This way, they can reduce those very expensive dividend to save money and could use it to pay back more until it all gone.
Even they have chance to stand up themselves again. It may need many many years. Recently, we see good signs and bad news.
Report from National Association of Realtor, April existing home sales was 4.62million units annual rate. It's up 3.4% from March's 4.47million and up 10% from a year ago. The median price was $177.400, up 10.1% from a year ago.
Report from Commerce Department, April new home sales was up 3.3% from March to annual rate of 343,000 units and up 9.94% from a year ago. The median price was $235,700, a slight increase from March.
According to the S&P/Case-Shiller 20-city home price index, home price in March fell just 0.03% from February,and after adjusting for seasonal factors , they rose 0.09%. That flat index in March is seen as good news; prices are down roughly 35% from their peak in 2006. In the first three months of this year, average sale price fell 2% from the fourth quarter of last year and 1.9% from a year ago.
The bad news is not from domestic, it is from Europe. Euro zone crisis look like endless drama. Nobody can really figure out what's the total damage for Greece to exit Euro zone, but something for sure is that will slow down economy recovery worldwide. Even may be some area go back to recession.
在今年波克夏股東大會舉行之前, 華老讓股東們每人可經由電子郵件給三位財金記者提出兩個有關問題. 每位記者選出十來個問題讓查老(Charlie Munger)和華老(Warren Buffett)來回答.
我也提出兩個問題,但是沒有被選上.第一個問題是"什麼是最好的方法讓美國政府離開政府支援事業(Government Sponsor Enterprises 特別是指房利美和房地美)". 第二個問題是"如何讓他們恢復獲利能力".
實際上,我個人認為,第二個問題就是第一個問題的解答. 當房利美和房地美開始恢復盈利時, 他們可以逐漸償還政府借給他們的救援金. 該救援金的利息為年率百分之十. 可能須要許多年才能還清. 一但還清,首先應該強化他們的資本結構. 之後, 開始發行無政府保證的債劵, 逐漸增加直到可以取得足夠的融資, 並逐漸減少發行有政府保證的債劵直到完全沒有. 此時, 美國政府可以逐步分批將手中的購股權(佔全部發行股份的79.9%)賣還給房利美和房地美, 或是在市場上出售. 這不僅可能是最好的方法讓山姆大叔離開政府支援企業, 說不定還可以大賺一票. 要是那時候沒有人在乎政府支援企業是否存在, 那他們繼續照舊營業便是(有政府保證的債劵利率要比沒有政府保證的來得低).
那麼第二個問題呢? 是很困難, 但有可能. 房利美在今年第一季已達到.
通常兩房(房利美和房地美)都會有淨利息收入. 房市泡沫化後,他們的損失主要源於 1)過多的法拍損失, 2)須要過高的壞帳準備, 3)資產市場價格的帳面損失, 4)特別優先股的股利.
讓我們逐項分析. 看看是否有機會讓他們持續地轉虧為盈.
1)今年三月底時,房利美的嚴重違約率為3.67%(二零一零年三月底時為5.47%),房地美的則是3.51%,比起二零一一年底美國房貸市場的7.73%少了不少. 因此我們開始看到法拍的損失減少. 法拍損失不會完全消失, 但是可以減少很多.
2)當法拍率降低後, 不只是法拍損失減少,所須壞帳準備亦可減少. 因此兩房的壞帳準備提列亦較為減少. 當法拍率降至2%以下, 不只是可以暫停提列壞帳準備,甚至於可以取出一些作為當季的利潤. 目前房利美有七百四十六億的壞帳準備, 房地美有三百八十三億.
3)房市崩盤後, 那些自備款很少或是沒有自備款的房貸, 須將購買價和跌落後的市場價之差異, 列為當季的虧損.總虧損大於淨資產時, 要麼倒店, 要麼有大佬出錢支持. 兩房倒不起, 所以山姆大叔無限支持. 當房市止跌回升時, 可將增值的部分列為未實現利潤, 直到市場價回到購買價時. 近來, 開始看見未實現利潤取代了未實現虧損.
4)目前房利美有一千一百七十一億, 房地美有七百二十三億是向財政部週轉來的.對於這些特別優先股,兩房是要年付百分之十的股利. 只有在當其它收入總合起來夠付這特別股利後,我們才能說兩房止血了,並且不須再向財政部提領更多錢. 只要他們的財務和現金流量夠健康. 當應儘快地還錢給財政部. 這樣省下的股利, 可以還更多的錢. 直到付清為止.
雖然他們有機會再站起來, 但是須要許多許多年. 近來, 我們看到好的徵兆, 但也有壞消息.
全國房地產協會報告; 四月成屋銷售年率為四百六十二萬棟, 比三月的四百四十七萬棟增加3.4%,比一年前高出10%. 中間售價為$177,400 高出一年前10.1%.
商業部報告;四月新屋銷售年率為343,000棟, 比三月增加3.3%,比一年前高出9.94%. 中間售價為$235,700 比三月略高.
史丹普爾的凱斯希勒房價指數, 在三月中比二月降了0.03%, 經過季節調整後, 則升了0.09%. 這可視為好消息. 三月房價比2006年高峰時降了約35%. 今年第一季平均售價比上一季降了2%,比去年同期降了1.9%.
壞消息並非來自美國國內. 而是來自歐洲. 歐元區危機好像是無止境的戲碼. 無人能預估希臘脫離歐元會帶來的損害. 可預測的是一定會減緩經濟復甦的步調. 甚至有一些區域會再進入衰退.
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