What can you do to add to a fantasy world of one-eyed monsters and talking sponges? Where there are tens of thousands of video games of every type mostly well done, animated and easy to use that work well enough to amuse and entertain just about anyone?
What can you do in a world where outrageous lies and sensationalized half-truths attract large audiences but the truth told factually does not and is not believed nor desirable?
What can you do in a country so covered over in things but few real answers to the real problems facing us individually and collectively?
What can you do when the world of business opportunities supports only a few and nearly never women, disabled or minority run startups and businesses?
What can you do when the investors that are available want a return of 10x’s their investment within 5-7 years taken back out of your business for them to do anything at all?
What can you do when to create something new is required in the marketplace but never supported with adequate funding or resources because it is new and innovative which means it has no track record to prove its value?
CricketDiane Artwork combining my photography with a pastel drawing I did of a ballerina getting ready to dance.
How would it EVER make sense for me as a company to be required to pay the price I’m charging you for buying me? And, pay the interest on that debt you used to buy me as a company – AND pay you management fees for destroying the company I’ve built that you’re charging me the price of buying – from me – so you can own it?
Why wouldn’t the borrowing that was done to buy Toys R Us belong to the private equity firms who bought it?
What happened to Toys R Us?
Apparently, the company was loaded with debt that came from three private equity firms forcing the company to pay for its own purchase by them back in 2005. Bain Capital, KKR and Vornado Trust Realty bought Toys R Us with the promise they would pay off the $2.3 billion in debt that Toys R Us already had at the time. Then, rather than doing that, these private equity firms added the debt they acquired buying the company and added it to what was already owed by the Toys R Us company.
That meant a debt of $7.2 billion has been owed by the company since that time and each year having to pay to roll it over by servicing the debt and never having paid it off.
Toys R Us was paying $400 million a year to simply service the debt plus paying management fees and making payouts to the private equity firms.
So, despite the toy industry seeing increases across the world in sales and the Babies R Us stores of the chain being profitable AND the 15% share of the entire toy market being enjoyed by Toys R Us which is phenomenal across its 1600 stores in 38 countries – it was forced into complete bankruptcy (Chapter 7 Bankruptcy now).
When Toys R Us sold to Bain, KKR and Vornado, 80 percent of its asking price of the $6.6 billion price tag was paid by Toys R Us and not those acquiring the company – which would be illegal in any other context of finance, loans and buying something.
Then, by putting this debt load on the company, it assured that money coming into the company could not be used in a vast array of other ways to upgrade and maintain their stores, increase their online presence, hire more sales people, or even to keep the sales staff they had that were already familiar with their stores and products, among other things.
Effectively, after buying KB toys which had been the second biggest toy retailer in the US, the same private equity group robbed that company of its cash resources to operate as well, even before the Toys R Us brand was bled dry of cash by the same pattern of destructive acquisition.
After buying KB Toys in 2000, Bain and its co-investors had the retailer borrow $85 million to pay the firm and its co-investors a dividend — a move that left the chain, which had been generating steady earnings, strapped for cash as deepening price cuts at Walmart lured more shoppers away from malls.
In that case, Bain’s cash grab left it with a profit on its investment, despite the fact that 86-year-old KB Toys got liquidated in 2008.
It looks like Toys R Us, that was built from 1948 into a mammoth successful and very profitable toy stores, wasn’t bought for $6.6 billion. It was bought for $1.3 billion in equity by the three firms, Bain Capital, Vornado Realty Trust and KKR.
This article said that the fees and interest on the debt from that buyout was costing Toys R Us $470 million a year in service. It also says that the price for the company during the buyout was $7.3 billion. Of which, the private equity firms put up what? Obviously, not cash. I’m going to look that up.
Bain, KKR, Vornado Suffer Wipeout in Toys ‘R’ Us Bankruptcy
The three firms and their co-investors sank $1.3 billion of equity into the takeover of the Wayne, New Jersey-based toy company, financing the rest with debt, according to company filings. The debt included senior loans in which they held a stake.
Partly offsetting the loss is more than $470 million in fees and interest payments that Toys “R” Us awarded the firms over time.
And from this article, it describes briefly, the typical method involved in these types of buyouts which follow a pattern of destroying the assets of the company’s operations while stealing resources (legally) at every point along the way.
It would be as if I gave someone $3 to own something that cost $2,000 and had someone else responsible for paying the entire amount, and giving me back several thousand dollars for having put up $3 in the first place.
I’d almost bet the $3 they used in the form of $1.3 billion wasn’t even cash or real assets.
Toys R Us and why the retail downturn is all about debt
“Leverage just means you’re using lots of debt,” said Eileen Appelbaum, co-director of the Center for Economic and Policy Research.
If a private equity firm wants to buy a company, it’ll put up a small portion of the money. Then it’ll go to the bank and borrow the rest.
The key? “They put the debt on the company they buy,” Appelbaum said.
In other words, the firms take out these loans, buy a company and then make that company pay the loans back.
Despite having 15% of toys sales in the marketplace and a heavier shopping season last Christmas with shoppers spending $800 billion during the holiday season, according to FT (see below for article), Toys R Us was facing massive loan payment costs that put it into liquidation status.
Toys ‘R’ Us Has 15% of the Toy Market And It’s Still Going Under. Here’s Why.
Fifteen percent of U.S. toy revenue. With that kind of market share, Toys ‘R’ Us should be in a comfortable position, not on the ropes.
The pattern followed by Toys “R” Us is typical in private equity takeovers. Management is bought off: John Eyler, CEO of Toys “R” Us, was compensated $65.3 million upon the buyout’s completion. Employees have no say in the matter. Then come the layoffs, debt transfers and shortsighted asset sales. Funds are earmarked to pay down debts—Toys “R” Us was spending more annually on debt payments than it was on its website and stores—even as cash reserves are depleted.
US retail’s turbulent relationship with private equity
DECEMBER 29, 2017
FT research shows many of the largest leveraged buyouts in the sector over the past decade have either defaulted, gone bankrupt or are in distress
At least 50 US retailers — including Toys R Us, children’s retailer Gymboree, shoe store Payless and jean maker True Religion — have filed for bankruptcy this year, the most in six years, with analysts describing it as a “day of reckoning”, for companies that rolled over their debt refinancing for years.
Observers warn that the distress is likely to accelerate in 2018 with nearly $6bn in high-yield retail debt set to mature.
The swift unraveling of the toy seller, at $6.9bn the third-largest retail bankruptcy in history, jolted vendors, who are critical to a retailer’s health.
There was some respite for bricks-and-mortar retailers this week with US shoppers spending more than $800bn in the holiday season, a 3.8 per cent rise from last year,
Looking at the article below, it occurred to me that possibly, the private equity firms own some of the debt made to the companies required to pay for their own buyouts by someone else.
Then the fees for those loans are also being paid to the private equity or investment firms holding them, on top of the management fees and other dividend payments, plus other payouts they’re are finagling from the company.
And, all of it providing a stream of resources to the investment funds that should legally belong to the company for its operation, sustenance, growth and as a prudent cash reserve against changes in the market.
The retail apocalypse is being fueled by private equity firms adding to debt loads
Nearly every retail chain caught up in the brick & mortar meltdown is an LBO queen – acquired in a leveraged buyout by a private equity firm either during the LBO boom before the Financial Crisis or in the years of ultra-cheap money following it. During a leveraged buyout, the PE firm uses little of its own capital. Much of the money needed to buy the retailer comes from debt the retailer itself has to issue to fund the buyout, which leaves the retailer highly leveraged.
The PE firm then makes the retailer issue even more junk bonds or leveraged loans to fund a special dividend back to the PE firm. Come hell or high water, the PE firm has extracted its money.
Then the PE firm charges the retailer hefty management fees on an ongoing basis.
A lot of times, these PE firms acquire part of the bonds before bankruptcy of their portfolio company for cents on the dollar. For example, Bain Capital bought significant amounts of Gymboree bonds. This gives PE firms more control during the bankruptcy proceedings, and they win again.
Why do institutional investors fund asset-stripping associated with LBOs and special dividends? Some of the answers are in Wall Street’s culture where fee extraction is everything, and one firm helps another. And too, they’re chasing yield in a world where central banks have repressed yield. Which turns out to be a costly chase.
Sports Authority is Another Loss to Our Country Caused By Leveraged Buyout Nightmare
A number of retailers have suffered this buyout process whereby the company being acquired is forced to pay for itself to be bought out by loading the profit making retailer (or other types of companies) with massive debt and extra costs to pay off cash to those who “bought” it.
But, since when do you or I get to buy something for nothing but a promise of 10% on the cost of it and then enslave the operation to pay off the rest for that purchase while streaming most of its available cash to us in fees and dividends?
From this article describing the process that took apart Sports Authority –
Leveraged buyouts saddle retailers with debts they can’t repay
April 29, 2016
But Englewood-based Sports Authority was loaded with at least $643 million in debt, a hangover from the $1.4 billion leveraged buyout in 2006 by investors led by Leonard Green & Partners.
Sports Authority’s bankruptcy plan initially included closing 140 of its 463 stores. But lawyers for the chain said in court last week that the company now is pursuing liquidation, leaving workers jobless and shopping centers across America anchorless.
In the fast-evolving world of retail, where the one constant is the need for investment, retailers laboring under heavy debt are at a disadvantage.
“Doing it right is very expensive,” said Raya Sokolyanska, an analyst with Moody’s Investor Service in New York. “Limited financial flexibility has been a reason why a lot of these retailers haven’t been able to fight back and position themselves correctly for growth.”
Private equity firms have been connected to a rash of retail bankruptcies in recent years, including Gymboree, Payless ShoeSource, The Limited Stores, True Religion Apparel, and most recently, Toys “R” Us.
(. . . )
But Toys “R” Us wasn’t pushed into court because of terrible sales — it recorded nearly $1 billion in online sales in 2016, according to a spokesperson, and had earnings before interest, taxes, depreciation, and amortization of $792 million. Rather, the company was struggling to pay down its staggering debt load — for which it could thank its 2005 leveraged buyout. Bain Capital Private Equity and KKR & Co. teamed up with real estate investment trust Vornado Realty Trust to acquire the company for approximately $6.6 billion, including $5.3 billion of debt secured by the company’s assets.
Why Private Equity Firms Like Bain Really Are the Worst of Capitalism
Here’s what private equity is really about: A firm like Bain obtains cheap credit and uses it to acquire a company in a “leveraged buyout.” “Leverage” refers to the fact that the company being purchased is forced to pay for about 70 percent of its own acquisition, by taking out loans. If this sounds like an odd arrangement, that’s because it is. Imagine a homebuyer purchasing a house and making the bank responsible for repaying its own loan, and you start to get the picture.
O.K., but what about this much more virtuous business of swooping in and restoring struggling companies to financial health? Well, that’s not a large part of what private equity firms do, either. In fact, they more typically target profitable, slow-growth market leaders. (Private equity firms presently own companies employing one of every 10 U.S. workers, or 10 million people.)
And that’s when the fun starts. Once the buyout is completed, the private equity guys start swinging the meat axe, aggressively cutting costs wherever they can – so that the company can start paying off its new debt – by laying off workers and cutting capital costs.
This process often boosts operating profit without a significant hit to the business, but only in the short term; in the long run, the austerity approach makes it difficult for companies to stay competitive, not least because money that would otherwise have been invested in expansion or product development – which might increase revenue down the line – is used to pay off the company’s debt.
It takes several years before the impacts of this predatory activity – reduced customer service, inferior products – become fully apparent, but by that time the private equity firm has generally resold the business at a profit and moved on.
The next article reminded me of how much is at stake for vendors, toy manufacturers, shippers, shopping malls and strip mall groups that have used Toys R Us to stock their shelves with products, rent large anchor properties and draw traffic to other stores nearby. All of these will be suffering hits, possibly causing layoffs beyond those being caused directly by the bankruptcy of Toys R Us as it closes 2600 stores.
How $5 billion of debt caught up with Toys ‘R’ Us
SEPTEMBER 20, 2017
But the company’s ability to kick the can down the road had been exhausted. The bankruptcy filing was the culmination of an unsuccessful seven-month effort by Toys “R” Us to find relief from its $5.2 billion debt pile, according to bankruptcy court filings and people familiar with the deliberations.
The advisers that Toys “R” Us hired to fix its capital structure explored at least two deals with some of its creditors to raise money that would have helped the company stave off bankruptcy before the key holiday shopping season, avoiding a supply chain disruption stemming from vendor fears about repayment, a bankruptcy filing shows.
Once the company realized that it could not secure financing to get through the holiday season, the objective became “let’s get it done as quick as possible so it does not interrupt the holidays,” Toys “R” Us Chief Executive Officer David Brandon told Reuters in an interview. Filing for bankruptcy allowed the company to secure financing to continue to operate its stores.
Given that “we successfully obtained our debtor-in-possession financing today, we can assure our lenders that we are in a good position to accept shipments on a normal basis and they have great assurance they will be paid,” Brandon said.
Like other retailers that own their stores, Toys “R” Us tried last month to tap its vast real estate portfolio to raise money in a sale-leaseback transaction, according to court filings. Sale-leaseback deals allow retailers to raise cash by selling real estate they own and then renting it back from the new owner. (which didn’t work, my note.)
More Layoffs for Retailers Already Having Massive Store Closings and Layoffs
Jobs everywhere! Except at stores
January 5, 2018
Record numbers of store closings and a surge in retail bankruptcies, as well as the shift to online shopping, have forced retailers to slash jobs even as other employers scramble to find qualified workers.
The sector lost a total of 66,500 jobs in 2017.
General merchandise stores, the segment that includes department stores, were hit the hardest, losing 90,300 jobs, according to the Friday’s December jobs report from the Labor Department. Clothing stores cut another 28,600 jobs. Drug stores lost 18,400.
So the job losses in the sector are likely to continue said Nicholas. In 2017, 7,000 store closings were announced, a record that was more than triple 2016’s number. And the trend will undoubtedly continue in 2018. Sears Holdings (SHLD), owner of both Sears and Kmart, said Thursday it plans to close more than 100 additional stores.
According to BLS data, the number of retail openings in February slumped to 541,000, down by 40,000, its worst performance since 2015. (U.S. News)
BLS data also showed retail layoffs and discharges climbed 37% in February and reached a total of 212,000 – its highest level in nearly two years. (U.S. News)
Unlike in 2008, Americans today are shopping more than ever.
While the last spike in retail bankruptcies during the Great Recession was clearly a byproduct of consumer stress, this time around consumers are actually spending more than ever. According to Gallup, February 2017 marked the highest average in consumer spending since 2008, with no signs of slowing.
The US retail industry is hemorrhaging jobs – and it’s hitting women hardest
January 13, 2018
As the retail landscape undergoes a dramatic transformation, analysis finds 129,000 women lost jobs last year while men actually gained positions.
Between November 2016 and November 2017, the sector fired 129,000 women (the largest loss for any industrial sector for either sex) while men gained 109,000 positions, according to an analysis by the Institute for Women’s Policy Research (IWPR). In the whole labour force women gained 985,000 jobs over the year, while men gained 1.08m jobs.
(also from this article – )
Major retailers shut shops across the US last year. A record 6,700 stores shut in 2017, according to Fung Global Retail & Technology, a retail thinktank. Macy’s alone closed 68 stores and shed 10,000 jobs. Drugstore chain Walgreens closed 600 locations.
A comment in this article says a lot of what I’ve been thinking. And, why is it that Bain, KKR and Vornado didn’t have to pay the loan payments they took out to buy Toys R Us? Shouldn’t that debt belong to the buyers, not the company they’ve bought? (This article also lists a number of the retail bankruptcies from 2017, including Radio Shack.)
Big Wall Street banks are not likely to blow the whistle on asset-stripping scams in the private equity world. They are frequently involved in collecting fees for advising on the LBOs. Then they reap more huge windfalls in fees when they underwrite the bond offerings that load up the company with debt it can’t service on a long term basis.
So the overarching question in all of this is: where is the Securities and Exchange Commission, the so-called cop on the beat that is supposed to be policing the publicly traded corporate bonds involved in these deals?
In April, Aisha Al-Muslim, a reporter for Newsday, the Long Island, New York newspaper, found the following after an in-depth review of court documents and data from top research firms like S&P Global Market Intelligence:
“…43 large retail or supermarket companies, which owned chains with 10 or more locations, have filed for bankruptcy in the United States since January 2015. The 43 companies controlled 52 brick-and-mortar chains.
“Of those 43 companies, 18 — more than 40 percent — were owned by private equity firms. The remainder were public or private companies or owned by a hedge fund.”
When 40 percent of insolvent large retail companies got this way at the hands of the so-called turnaround experts at private-equity firms while huge amounts of money moved from the coffers of the company to the pockets of the “experts,” it’s time for Federal regulators to get involved.
Private equity firms bled the company dry to turn a profit, and now mass layoffs are imminent.
Upon closer examination, however, this analysis doesn’t hold up. First, the global toy industry isn’t in decline. In fact, it’s been growing consistently over the past five years. Physical toys may be less popular in the United States than they once were, but internationally—particularly in Asian and Latin American countries—the play business is booming. And most of Toys “R” Us’s profits actually come from its Babies “R” Us affiliate which sells not just toys but also health, safety and educational tools for infant care.
Yet most importantly, this analysis fails to account for how Toys “R” Us wound up so deeply in debt in the first place. In 2005, as the company’s stock was regularly losing value due to mediocre sales, management decided to sell the company in a leveraged buyout to a trio of buyers, real-estate-investment trust Vornado Realty Trust and private equity firms KKR and Bain Capital.
This trio played a critical role in the downfall of Toys “R” Us, through imposing massive debt obligations on the company and requiring it to pay back its debts so that its buyers could turn a profit. Meanwhile, the finances of the company were thrown into disarray and employees were hit with wave after wave of layoffs.
Vornado Realty Trust, KKR and Bain Capital financed 80 percent of the purchase of Toys “R” Us, so while the company sold for $6.6 billion, the trio only contributed $1.3 billion. As part of the purchase agreement, the companies also agreed to take responsibility for all of Toys “R” Us’s long-term debt obligations, which at the time totaled $2.3 billion. Once Toys R Us was taken over, however, the debt Vornado Realty, KKR and Bain used to acquire it was pushed back onto the company, skyrocketing its debt obligations to $7.6 billion.
Toys “R” Us has been paying $400 million a year to service these debts. This money could have been used to lower prices or improve the company’s website—not to mention raising pay to its employees—but instead went to paying off creditors. Last year, the company reported a loss of $29 million. If it weren’t for these debt payments, Toys “R” Us would have run a substantial profit.
In both instances, critics say Bain and its private-equity partners left the chains vulnerable by saddling them with heavy debt loads as they took them private, crippling their capacity to compete in brutal price wars that have dogged the industry.
A leveraged buyout (LBO) is a financial transaction in which a company is purchased with a combination of equity and debt, such that the company’s cash flow is the collateral used to secure and repay the borrowed money.
(also – KKR appears in the history of corporate raiding during the 80’s and beyond – plus this, of interest)
The inability to repay debt in an LBO can be caused by initial overpricing of the target firm and/or its assets. Over-optimistic forecasts of the revenues of the target company may also lead to financial distress after acquisition. Some courts have found that in certain situations, LBO debt constitutes a fraudulent transfer under U.S. insolvency law if it is determined to be the cause of the acquired firm’s failure.
The outcome of litigation attacking a leveraged buyout as a fraudulent transfer will generally turn on the financial condition of the target at the time of the transaction – that is, whether the risk of failure was substantial and known at the time of the LBO, or whether subsequent unforeseeable events led to the failure. The analysis historically depended on “dueling” expert witnesses and was notoriously subjective, expensive, and unpredictable. However, courts are increasingly turning toward more objective, market-based measures.
Private equity typically refers to investment funds organized as limited partnerships that are not publicly traded and whose investors are typically large institutional investors, university endowments, or wealthy individuals. Private equity firms are known for their extensive use of debt financing to purchase companies, which they restructure and attempt to resell for a higher value. Debt financing reduces corporate taxation burdens and is one of the principal ways in which private equity firms make business more profitable for investors.
Leveraged buyout, LBO or Buyout refers to a strategy of making equity investments as part of a transaction in which a company, business unit or business assets is acquired from the current shareholders typically with the use of financial leverage. The companies involved in these transactions are typically mature and generate operating cash flows.
Private equity firms view target companies as either Platform companies which have sufficient scale and a successful business model to act as a stand-alone entity, or as add-on or tuck-in acquisitions, which would include companies with insufficient scale or other deficits.
Leveraged buyouts involve a financial sponsor agreeing to an acquisition without itself committing all the capital required for the acquisition. To do this, the financial sponsor will raise acquisition debt which ultimately looks to the cash flows of the acquisition target to make interest and principal payments.Acquisition debt in an LBO is often non-recourse to the financial sponsor and has no claim on other investments managed by the financial sponsor. Therefore, an LBO transaction’s financial structure is particularly attractive to a fund’s limited partners, allowing them the benefits of leverage but greatly limiting the degree of recourse of that leverage. This kind of financing structure leverage benefits an LBO’s financial sponsor in two ways: (1) the investor itself only needs to provide a fraction of the capital for the acquisition, and (2) the returns to the investor will be enhanced (as long as the return on assets exceeds the cost of the debt).
As a percentage of the purchase price for a leverage buyout target, the amount of debt used to finance a transaction varies according to the financial condition and history of the acquisition target, market conditions, the willingness of lenders to extend credit (both to the LBO’s financial sponsors and the company to be acquired) as well as the interest costs and the ability of the company to cover those costs. Historically the debt portion of a LBO will range from 60%–90% of the purchase price, although during certain periods the debt ratio can be higher or lower than the historical averages. Between 2000–2005 debt averaged between 59.4% and 67.9% of total purchase price for LBOs in the United States.
Simple example of leveraged buyout
A private equity fund say for example, ABC Capital II, borrows $9bn from a bank (or other lender). To this it adds $2bn of equity – money from its own partners and from limited partners (pension funds, rich individuals, etc.). With this $11bn it buys all the shares of an underperforming company, XYZ Industrial (after due diligence, i.e. checking the books). It replaces the senior management in XYZ Industrial, and they set out to streamline it. The workforce is reduced, some assets are sold off, etc. The objective is to increase the value of the company for an early sale.
The stock market is experiencing a bull market, and XYZ Industrial is sold two years after the buy-out for $13bn, yielding a profit of $2bn. The original loan can now be paid off with interest of, say, $0.5bn. The remaining profit of $1.5bn is shared among the partners. Taxation of such gains is at capital gains rates.
Note that part of that profit results from turning the company around, and part results from the general increase in share prices in a buoyant stock market, the latter often being the greater component.
Often the loan/equity ($11bn above) is not paid off after sale but left on the books of the company (XYZ Industrial) for it to pay off over time. This can be advantageous since the interest is typically offsettable against the profits of the company, thus reducing, or even eliminating, tax.
Most buyout deals are much smaller; the global average purchase in 2013 was $89m, for example.
The target company (XYZ Industrials here) does not have to be floated on the stockmarket; indeed most buyout exits are not IPOs.
Buy-out operations can go wrong and in such cases the loss is increased by leverage, just as the profit is if all goes well.
The application of the Freedom of Information Act (FOIA) in certain states in the United States has made certain performance data more readily available. Specifically, FOIA has required certain public agencies to disclose private equity performance data directly on their websites.
In the United Kingdom, the second largest market for private equity, more data has become available since the 2007 publication of the David Walker Guidelines for Disclosure and Transparency in Private Equity.
How would it EVER make sense for me as a company to be required to pay the price I’m charging you for buying me?
And, pay the interest on that debt you used to buy me as a company – AND pay you management fees for destroying the company I’ve built that you’re charging me the price of buying – from me – so you can own it?
In what world does any of that make sense as anything but theft and embezzlement whether legal or not?
Can you imagine what it would take to start a company today and garner 15% of the toy market? And yet, here is a company that already has that which is being decimated by a very corrupt business practice of Wall Street investment firms – to the detriment of America.
The question of what damage could a Trump extreme right-wing cabinet and Presidency do to America is on many people’s minds.
I found this entry on a draft post on my CricketDiane blog from the GOP run America of the years before President Obama and the Democrats took over the ship (at least partially since the GOP continued to run most states) – and righted our economy.
The cost to taxpayers and homeowners plus Fannie Mae and Freddie Mac shareholders is known now, eight years later and it obviously hurt our economy in ways that destroyed lives, decimated communities and degraded the opportunities for massive numbers of Americans and their families for several generations yet to come.
The Federal Housing Finance Agency placed Washington-based Fannie and McLean, Virginia-based Freddie in a so-called conservatorship and ousted the chief executive officers. The Treasury agreed to invest as much as $100 billion in each company through preferred stock purchases as needed and put common shareholders on notice that they will rank last in the government’s consideration. 
I couldn’t remember where this quote came from, so I did a google search with it and these entries came up –
Gov’t may soon take over troubled mortgage finance giants Fannie Mae, … and Freddie and topurchase stock in the two companies if needed. … The Treasury plans to put Fannie andFreddie into a so– called conservatorship and pump … Paulson consulted with Bank of America Chief Executive Officer …
Mudd, the son of TV anchor Roger Mudd, was elevated to Fannie Mae’s top post in December 2004 when chief executive Franklin Raines and chief financial officer Timothy Howard were swept out of office in an accounting scandal. Syron was named Freddie Mac’s CEO in 2003, replacing former chief Gregory Parseghian, who was ousted in after being implicated in accounting irregularities.
He formerly was executive chairman of Thermo Electron Corp., a Waltham, Mass.-based maker of scientific equipment, served head of the American Stock Exchange was president of the Federal Reserve Bank of Boston in the early 1990s.
Fannie Mae was created by the government in 1938, and was turned into a shareholder-owned company 30 years later. Freddie Mac was established in 1970 to provide competition for Fannie.
A government takeover could cost taxpayers up to $25 billion, according to the Congressional Budget Office.
[from – AP 2008 – Gov’t may soon take over troubled mortgage finance giants Fannie Mae, Freddie Mac] (included in post above)
The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, is a public government-sponsored enterprise (GSE), headquartered in the Tyson’s Corner CDP in unincorporated Fairfax County, Virginia. … On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III …
The litigation surrounding Fannie and Freddie’s conservatorship raises all … 2 See FEDERAL HOUSING FINANCE AGENCY (FHFA), ENTERPRISE SHARE OF …. Preferred Stock PurchaseAgreements (PSPAs) with the Treasury. … make unlimited equity and debt investments in the two companies‘ securities through.
Oct 4, 2016 – Kenneth C. Griffin, chief executive officer of Citadel Inves … “and gave the government every benefit of the doubt as she did so, and … Judge Sweeney, in the Court ofFederal Claims in Washington, D.C., and a … placed Fannie Mae and Freddie Mac intoconservatorship, with … Sponsored Financial Content.
But, for decades, Fannie Mae had been under siege from powerful enemies, who … with astock-market value of more than $70 billion and more earnings per … an obscure government agency known as the Federal Housing Finance Agency … in Fannie and Freddie (which was also put into conservatorship that same day), …
Sep 7, 2008 – Treasury Senior Preferred Stock Purchase Agreement. 2. …. Fannie Mae andFreddie Mac debt and mortgage backed securities outstanding today … indefinite in duration and have a capacity of $100 billion each, … If the Federal Housing Finance Agency determines that a GSE’s liabilities have exceeded its.
Obviously, there are repercussions from the GOP run years that have even yet to be realized despite all the efforts of the Obama administration to make things right. But, since Donald Trump has been given these shoes to fill as President of the United States and has nominated a host of extreme right wing loyalists in positions of power, it is time to look at the playing fields that will be impacted by their policies and actions.
This quote I found that tops this post, led me to find a few things of help and value as well, which many Americans need to access before everything potentially damaging can be enacted by the GOP backed new administration, GOP run Congress and Senate as well as the predominantly GOP run state legislatures across the country.
As promised by GOP after the 2008 decimation of housing values, as millions of Americans suffered from mortgage values far in excess of market values for their homes, many programs were put in place – nearly all of which performed poorly or not at all to relieve homeowners from these blighted economic difficulties.
However, today I found this program that relieves the principle owed on upside down mortgages and it is a current program. Before it is decimated by the Republicans coming into policy making extremes of the new administration run by Trump, it is worth taking advantage of this program as quickly as possible.
There are areas of the country that are to be mainly served by this program’s opportunities but not necessarily exclusive to those areas of the country and that would be worth finding out if you are a homeowner who is in need of this program’s help and promises.
I found it at the Federal Housing Finance Agency website – and there may be three people in the entire world that actually know it exists and they are probably bankers. Many programs to help homeowners have been issued through other agencies and to get a realistic list of them and their requirements would likely be a Herculean effort. But, start here and find the requirements briefly that I’ve added from their website. The link to the page is below the quoted material.
– cricketdiane, 12-29-2016
PRINCIPAL REDUCTION MODIFICATION
The Federal Housing Finance Agency (FHFA) undertook an extensive evaluation to determine whether to implement a Principal Reduction Modification program for seriously delinquent, underwater borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac (the Enterprises). FHFA’s objective was to develop a program that helped targeted borrowers avoid foreclosure while also adhering to FHFA’s mandate to preserve and conserve the assets of the Enterprises.
Am I Eligible?
Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac and meet basic criteria.
At least 90 days delinquent as of March 1, 2016
Unpaid principal balance of $250,000 or less as of March 1, 2016
I’ve been creating nearly every day since I was a kid and that is over 50 years. I’ve created in numerous ways in a range that moves from art to problem-solving to inventing, creating music, sculpting and painting to writing and doing various computer / online based projects.
“It is better to make the effort to move forward and release the flow of ideas to work with them and do things creatively, create things and invent and write and make – I definitely know that by experience.” – cricketdiane, 2018 ** You can find more of my art and designs here –
Why is there never any real help for anyone who is homeless, when there are millions of dollars and hundreds of thousands of employees being paid by agencies, organizations, churches, faith based organizations, NGOs, nonprofits and government resources to provide an end to homelessness, to help the homeless, to prevent homelessness, to provide housing to families and individuals that are homeless and to help people who are homeless to end their own homelessness?
14,778 results found when the word “homelessness” is used. These organizations and non-profits range from shelters to organizations to end homelessness.
When the search term, “poverty” is used it shows
7,342 results found.
For the category, “General Human Services” – Guidestar shows 131,329 entries of organizations offering social services.
The category, “Housing” shows 35,920 nonprofits engaged in housing efforts to end homelessness, provide homeless and family shelters, to assist with finding housing and / or to fight for affordable housing to be available.
These listings are for US charities and nonprofits. The areas above are beyond the youth services which also has another category and there are more charities and nonprofits, faith based organizations and other NGOs involved that would not necessarily be listed with Guidestar or other databases – but would include foundations and branches of international organizations who are in the US as well.
But why are years upon years of funding, financing and efforts across so many agencies from federal and state to local as well as nonprofits and homelessness prevention organizations, faith-based organizations and NGOs not getting anything much accomplished for individuals and families in America that are homeless except to keep them basically and continually homeless?
In fact, many of these programs have lost funding as a direct result of HUD’s emphasis on chronic homelessness. This loss is compounded by the fact that many private foundations and local and state governments have followed the federally-established priority on chronic homelessness.
HUD’s Point-in-Time counts, which exclude large segments of the homeless population, prop up these misguided federal policies, and encourage redirection of private and local funding.
[ . . . ]
Certainly, some communities have seen significant reductions in the counts of chronically homeless people, although HUD’s creative definitions may well have contributed to the reported successes. In addition to the narrowing of the definition of chronic homelesssness mentioned previously, HUD also invented the term “functional zero.”3 This Orwellian term does not mean that there are no more chronically homeless people in the communities that have reached “functional zero.” Instead, it means that the availability of resources in the community exceeds the size of the population needing the resources. Whether homeless people use those resources or are successful with them is not relevant. Under “functional zero,” people remain chronically homeless on the streets even after their communities have “ended” chronic homelessness.
Having experienced far too much poverty in my life as an adult in the US – it is obvious that homelessness, housing, social services and ending homelessness has become a business that employs people who were never in danger of being impoverished nor homeless while taking the funds for the poor, disabled, impoverished, disadvantaged, vulnerable and homeless to use for salaries, overhead, posters, media campaigns, nice seminars, nice offices, nice bonuses and employees’ perks, incentives and pensions. It stands to reason, that for less money, homelessness would have been solved had that been the real goal and agenda of these nonprofits and government backed entities including homeless shelters and services to the homeless and the poor.
But, ending homelessness nor finding homes and economic resources to support one’s own home is not their goal apparently. The real goal is obviously and pathetically, to continue making their own living at the expense of the homeless population, the poor and the disadvantaged – not to serve them at all, nor to provide any real access to affordable housing nor the means to pay for it not to be economically self-sustaining so that homelessness is no longer an issue.
Fourteen places to make money –
Cricket Diane C Phillips, 2008
1. Take the Area Occupational Wages pamphlet or from the Department of Labor online sources (by state) and use is to target potential customers making over $20 – $25 per hour.
2. Using this target audience, introduce products and services directly to them online through the websites, brochures, magazines, distributors and retailers already in place to reach them.
3. Customize products and services specifically to these niche audiences. Coffee cups having sayings, emblems and ideas suited to them are more likely to interest them, etc.
4. Find a target audience in person / on site by finding announcements of events in the area that are drawing them to participate. Using this venue, introduce the business / product / service using this opportunity. T-shirts can be sold appropriate to the audience, so can books and specialties.
5. Tailor whatever the product or service to the specific target audience or use the basis of common ground to interest them. While discussing meetings, coffee will be served and every one there is missing someone or something else.
6. Facilitate cooperation, analysis and brainstorming among participants involved in a common event, association or vocation / hobby / business. This helps create networks of consumers that provide a database of possible sales.
7. Go where money runs like rivers flowing into an event, mall, highly trafficked sports or entertainment venue, trade show or similar to approach participants with availability of some specific need during the show or that will make their life better after the show.
8. Use a theme of commonality, such as an interest – like, camping, love of animals, pets, hobbies, types of cars or activities to customize products and services. Then, target these audiences through events, publications and websites where they are involved or through stores that already attract them.
9. Provide a service needed by everyone at least once a year or better yet, once a month. This is the basis of sales for more items in the marketplace than anything else. People do want funnel cakes when at a craft festival and they will pay for something their children can do while there.
10. Create a convenience that doesn’t exist currently but is much needed. Anything that can save time for a reasonable cost will make people’s lives more organized and do-able. To target this audience, find stress free topics and stress reduction topics and contribute there.
11. Offices and industries are a captive audience with continuing needs, some of which are being served and some which are useful and not being served. This is a good target through online high readership, interactive forums and office product websites where goods are being sold already.
12. The most creative, personable character that touches the common thread of experience with most people can be the basis for entire lines of products, opportunities and uses. However, until this character has an association with people seeing it, getting to know it and kindling a response to it – the character has little value. Target any common-theme areas for application and audience.
13. Style creates sales, money and opportunities. To target a style to a specific audience, find the places where products are already being introduced to these audiences and either use them or by-pass them using off-shoot branches of these arenas. A tv show or sitcom can introduce a product.
14. How to tell everyone at once about a product, service or business? Use television broadcast / cable opportunities through existing shows and audiences, including news, new product shows, talk shows, sitcoms and reality shows. Then, know it has to be in front of those audiences more than once in order to work and be backed up by web access to it and a strong web presence along other avenues to be credible.
Written by Cricket Diane C “Sparky” Phillips, 08-09-08, USA
Cricket House Studios 2008