Fannie Mae-No Politics (FNMA)

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Anything is possible. Cancellation would ripen 5th Amendment Takings Claim in Judge Lamberth's Court. However, the likelihood of cancellation is much less today in light of recent statements from the 5th Circuit En Banc,

FHFA exceeded their statutory authority with NWS under HERA
FHFA unconstitutionally structured

...and the following collection of Judge Sweeney's statements in her Court,

Treasury actions "like the mob"

Treasury's "death grip" hold on the GSE's

"Oh, am I mistaken that members of the board were not told that you either agree to the conservatorship or you’ll be fired? Am I mistaken?"

" the way it was configured by Treasury is that it’s an impossible task for the conservatorships ever to become solvent because all their profits are being taken away."

"But how do you justify -- how does the Government justify never allowing Freddie and Fannie to pay off money it received and eventually being able to stand on its own feet, which it could have done, and then let its board decide whether or not to pay a dividend to the shareholders.
It seems from the beginning when you have FHFA coming -- and Treasury coming to the board of directors of the enterprises and saying you either agree to the conservatorship or you’re out, it seems as though there a death grip placed on the enterprises by Treasury and FHFA and they -- and when I say they, Treasury and FHFA, never allowed Freddie and Fannie to be restored to happier days when the financial crises passed and they could have not needed any infusion of capital and they could have paid their dividends."

"They did draw on it, but it wasn’t every dime that was put at their disposal and they were never allowed to repay -- the enterprises were never able to repay that which they borrowed. And so they were never allowed to stand on their own two feet again as much as an entity can stand on two feet."

"But how to do it wasn’t necessarily for the benefit of Freddie
and Fannie ultimately because they were never allowed to repay that which they borrowed. There was this siphoning of every dollar of profit."

"And again -- and the other point, I’m very concerned that Treasury approaches the board of directors of the enterprises and says, you either agree to the conservatorship or you’re out. That’s -- that sounds like undue influence, if not a death grip."

"That’s -- isn’t that part of the litigation that’s ongoing now with -- to decide whether or not that provision of HERA is constitutional? I mean, wasn’t the 30-day window problematic? If someone puts a death grip on you, yes, I’m sure you open the phone book or you know someone -- some lawyers in Washington or elsewhere, but it doesn’t give you a whole lot of time to get into court."

"And I’m really not so much concerned -- I’m really not concerned about what’s going on today, I’m just saying at that time. At the critical time period, you have directors of the enterprises or the board of directors of the enterprises being told you either play ball with Treasury or you’re out."

"And that is a Hobson’s choice. I can’t speak for those directors, but one could imagine that they -- they cared about the institution that they served and they would rather stay on board to see that they could help direct it and protect it from these outsiders that were going to come in, even though those outsiders are Treasury and FHFA, and they’re concerned that their organization is going to be raided. And that’s -- financially. And it seems to me that that’s what happened.
I appreciate your lottery ticket analogy, but the Plaintiffs owned stock, which is far more certain than a lottery ticket. A lottery ticket, you may have one in a billion or 100 billion chance of winning. Stock is something that -- it’s a certificate of ownership, you’re invested in that company and, God willing, you get a return. For preferred stock, they certainly were enjoying a return year after year after year. I think there was always a dividend paid except for maybe one of enterprises in 1985, something like that. So there was a fairly consistent return which is much better than a lottery ticket, at least any of the lotteries that I know of.
And if you can tell me where I’m going to get 10 percent back, let me know because, I mean, we’re going to adjourn and I’m going to go out and buy a ticket right now."

"But that’s why I’m saying that the conservatorship was not great favor to the enterprises."

"But what concerns me is that the borrower or borrowers, Freddie and Fannie, were never able to repay that which they borrowed. And so it always kept them several steps behind in the financial page. The enterprises were never able to repay the debt to the United States taxpayer, which I’m sure many of the shareholders are, probably the vast majority, and so the -- Freddie -- the enterprises were never able to right their financial ships of state and then make their profits while not borrowing anything from the U.S. taxpayer and then pay what dividend they can to their shareholders. And that doesn’t seem cricket. That doesn’t seem cricket to the way our government operates."

"It’s as though it was somebody -- they were used as like a piggy bank that they could -- or it was this funding stream. And I’m a taxpayer so, I mean, it’s great that the Government can generate tax revenues, that’s fine. But it should be fair and equitable if taxes are --"

"No, I understand that. It was just the decision not to allow Freddie and Fannie to repay loans and to be profitable again concerned me."

"But in all fairness -- a certain population of people -- having come out of more than two decades of the Justice Department, a decade and a half in the Environment Division handling Fifth Amendment takings, I was the apostate of the section, and handling a lot of breach of fiduciary duty cases involving tribes, those cases with the fiduciary duty universally when they have been upheld by the Court of Federal Claims have been Native American claims, whether it’s individual Native Americans or tribes, based upon longstanding treaties or statutes, the Bad Man Act, the treaties that we -- the United States Government executed with individual tribes.
And I just don’t think that can be overlooked, that those duties -- I mean, when the average American is dealing with the Mineral Management Service, there’s not a fiduciary duty that the Mineral Management Service and the BIA has towards the sale of those minerals or the acquisition of those minerals. And it’s because of that sacred trust that we have, the -- you know, again, based on both statute and treaties."

"Mr. Thompson, you may be able to change my mind, but as I sit here today and since the lawsuits were filed, it’s always been my view, and I guess perhaps you’ll change it, but that in order to assert a taking claim, the stockholder would have had to own the stock on the date of the taking. If a stockholder invested in the enterprises after the date of taking, they were speculators. Whether they knew it or not, they were speculators, or perhaps someone was trying to buy a lawsuit. I don’t know. That’s never a good idea. But in any event, that’s -- that is my world view."

"I don’t know. The day after the -- day after the date of take -- when anyone acquired stock, whether they knew or not, they were speculators.
And I’m not -- I’m not knocking speculators."

"A lot of South Florida who own property in South Florida who did very well, and there are other people who lost their shirt."

"I just don’t see the situation as analogous."

"Or for, you know, whatever they’re reading in the newspaper or they think a change in administration, whatever it may be, but after the date of taking, anyone who invested in the stock -- or invested in the enterprise, purchased stock, they did not have the same confidence before the PSPAs were -- before the Third Amendment was struck that there would be a return on investment."

"But if they’re -- if they’re on the losing end of the proposition, it doesn’t mean that the Government should reimburse them."

"But, okay, let’s say that I do think there are Fifth Amendment and illegal exaction claims. There’s accord and satisfaction that the Government can raise. I mean, if there’s -- if there’s recovery in District Court. On some other grounds."

"And the recovery in Judge Lamberth’s case would not come out of the Judgment Fund; it would come out -- I assume that’s correct."

"No, they can do that all the time. I just -- I have a particular world view in takings analysis with respect to standing."

"And what people do after the date of taking is on them, but I won’t necessarily find that they have standing in a Fifth Amendment taking lawsuit."

"And I’ll get you one -- I just -- I think in my ruling what I may do is include standing. I’ll just have to -- I’m still mulling. I have a solid draft of a decision, but what I may -- I think logical next steps would very well be for -- because clearly one or all parties will be dissatisfied or disagree with my ruling, and certification of questions to the Federal Circuit, I think, would make good sense because perhaps by that time we will have rulings in other cases, and the Federal Circuit can give guidance in this case, and then I’m not guessing.
The Federal Circuit can take a look at what its sister circuits have done in similar cases, and it may say -- the panel may decide we don’t care what other circuits have done because this is a Court of Federal Claims Fifth Amendment takings case or an illegal exaction case. You know, I think it was in the Winstar cases, every Circuit Court ruled against the Plaintiffs, but in this Court, Judge Loren A. Smith, who was then the Chief Judge, ruled in favor of the plaintiffs, and he was the one who was ultimately affirmed by the Supreme Court.
So, you know, numbers can give a lowly trial judge comfort, but it doesn’t tell the story. It depends upon the claims and what the jurisdiction is of the Court. So I think perhaps after I rule, and I promise to give you a lot to chew on and mull over and meditate on, I think next step should be certifications of questions to the Circuit. I just throw that out."

"And I don’t mean they’re evil or -- I mean this whole -- -- this country has been built on people with moxie and grit who speculate and they have foresight and they can find a way to legitimately find a place in the market where they can take an advantage, as you will, and be highly successful. And godspeed to all those people. So I wasn’t -- "

"I want the parties to have their day -- well, we’ll have many
days in court, but I mean, for this initial oral argument."

"Isn’t there a big difference, though, between a breach of employment and the ownership of stock and the Government’s taking stock?"

"Would it be different if, you know, the Government seized someone forest or seized their oil, or -- I should go with something intangible, but in any even -- "

"And I don’t think -- did I hear you mention patent rights?"

"Oh, I was going to say because patent can’t be the subject of a Fifth Amendment taking."

"Even under Penn Central, if you have a substantial, significant diminution in value, let’s say you bought stock for $300 a share and you can sell it for a penny, that’s -- that can be evidence of a taking."

"But -- a reasonable plaintiff or investor, knowing that an infusion of capital was required and the Government was going to provide that infusion of capital and that the company -- in this case the enterprises -- would have the opportunity to repay the loan and then regain its footing and then eventually to be able to pay dividend, that’s what one would expect.
One would not expect in the United States of America that the Government would step in with an infusion of capital and not then not allow -- and the dividends were going to flow to the taxpayers to repay the taxpayers, one would not expect that all profits would be directly flowing into the U.S. Treasury and that the company would never be able to repay that which it borrowed, get back on its feet, and resume normal operations and pay dividends again. That’s an aberration."

"But there was no wipeout of the companies. There was -- they were continued -- they continued on. Yes, there were infusions of capital, and, again, instead of being able to pay the loans back, every dime was sent to the U.S. Treasury."

"So it’s -- that’s not -- that’s not reasonable for an invest
or in holdings -- you know, who acquired stock before the market became shaky to anticipate, oh, well, there may be a bailout like Chrysler or some other companies, and -- but what the Government will probably ultimately do is continue to take dividends in perpetuity, that they will allow these -- Fannie and Freddie or the enterprises to be -- remain -- to become solvent and make a profit, but the shareholders with ownership in the enterprises will not see a dividend. It will all go to the U.S. Treasury."

"Has this happened often? Has this --"

"I hate to say it, I’m not -- this is going to sound so flip, and I don’t mean for it to, but this is like the mob. And it’s not, of course, but, I mean, you have all the money is being turned over to the Treasury."

"But, you know, what kind of -- how are they saving -- it’s almost as though the companies or the enterprises have become shells, and they’re able -- and they’re supposed to continue on in their work, but they will never make a profit because everything’s being diverted to Treasury."

"Well, one and two were fine. It was number three that whisked all the money away."

"But they’ve really been steady. I mean, they’ve been making a profit, and it’s been going to Treasury and the conservators have not allowed the two enterprises to return to what would be business as usual."

"Well, no, I -- I completely agree with you, but money -- the loans were not drawn down, and they could have been drawn down, so it seems -- the kid that went off to college, I mean, maybe looked at with a jaundiced eye by at least one or both parents or by the aunts and uncles, but -- the kid has repaid -- yeah, exactly. Well, no, but the money has been -- has been given to the parents one way or the other. You know, maybe the kid -- this is -- I shouldn’t continue with the analogy, but maybe they bought -- the parents paid for their home and gave them all the resources they need as opposed to writing a specific tuition check. Nevertheless, the money has returned to the parents."

https://www.acg-analytics.com/wp-content/uploads/2019/11/Fairholme-Condensed-Transcript.pdf

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What is particularly disturbing and absent from this entire case and every other case is the deliberate nature in which the 2008 crisis was allowed to develop BY DESIGN. DEMS & REPS alike set out to STEAL the GSE's way back in 1992 with the advent of the GSE Act. Every action since then has been to carry out that CRIMINAL HEIST. Our own attorney's have even ignored it. The evidence is all there. Connect the dots.

Is like 9/11. It was permitted to happen at the expense of 3K+ lives in order to justify passage of the 'Patriot Act' which legalized public surveillance on a massive scale. The subsequent development and integration of surveillance technology into everyday electronic devices by big tech giants followed soon after and continues to this very day at an accelerated pace. Think IoT. Trump himself just recently renewed the 'Patriot Act' last month.

Back in the day the fear was of commons getting cancelled. Is that still possible? I have lots of catching up to do here. Thx