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I never said the information in any protected documents would not be helpful to other claimants in other cases. It is just not necessary in the Fairholme suit. And, sorry, but your "intent" necessity requiring thousands of new documents is pointless and diversionary. Hank Paulson was quoted in 2008 as intending to wind down the GSEs. I have posted a link to that report on this board, previously. What more do you need?
And, yes, just to cutoff some of the usual rebuttal, I am aware that Paulson also made conflicting statements. But the intent evidence is already fully present.
I am also somewhat confused by all your effort and energy seemingly devoted to discrediting my views on Fairholme since YOU repeatedly have stated on this board that only the Perry Appeal matters. If Fairholme suddenly has some new value to you, could it be as the document clearing house? Hmmm.
JMHO.
Let's go back to the original conversation which started when I observed that a major investment bank was entering the same business as Fannie Mae... buying real estate loans from banks, packaging the loans as MBS. guaranteeing the payment of guarantees on MBS sold and, lastly selling the MBS to fixed income investors. I said this was a new class of competition for the GSEs and would not be helpful to revenue which has been on a steady decline throughout 2015 and so far in 2016. That was the basis for the discussion.
You then launched into some rant about how none of this mattered because it was immaterial to revenue.
First of all, it is NOT positive for either GSE to observe new competition entering the MBS business, especially when the market entry is being based on GSE guarantee fees having been raised so high under FHFA that others, now, find an opportunity to wrest some of their market from them by lowering the bar on fees. I linked the article on this in an earlier message.
We have earnings coming up next week for both Fannie & Freddie. Maybe we will get an up close and focused opinion on the revenue line and whether revenue rises or falls. That matters. Whose accounting skills are superior is irrelevant. Accountancy to me is boring and, as I have said for years, many accountants must have been beaten up as children throughout their formative years for acting like bratty dweebs.
JMHO.
Actually, the truth may be borne out next week when Q3 results are released and we likely will see revenues CONINUED their downhill march as has been the trend throughout all of 2016 and part of the PY.
Freddie may actually report a LOSS and require another bailout from UST.
You want to pontificate about accounting? You could start by learning to read a trendline in quarterlies like those in investment banking do in their sleep.
At least Rick Nagra deals in the world of whales. You live in the confines of a guppy's tiny cranium.
If that is some crass reference to Edwards vs. PWC... who knows, really... I seem to recall FMCC paying their auditor something like $300 M over time to perform the auditing function. PWC was challenged and SUED for not performing their work legally and properly.
As the party that paid for PWC's work, FMCC not only has a contractual right but, ore important, fiduciary responsibility to ascertain what happened in case future action is required to prevent another problem from taking place.
How anyone could determine this as "the wheels are coming off" is very perplexing.
JMHO.
Oh,boy. The fake Tim Howard. I can hardly wait.
After so many dismissals, already, yeah you could be right. Could definitely be a trend! LOL.
Please refer me to the statute or code that allows a plaintiff in one case to request discovery documents that relate to an entirely different case where such documents have nothing to do with the petitioner's claim.
It's the equivalent of a divorce case where the petitioner requests documents helpful to some next door neighbor's divorce case.
Maybe it's in the section adjacent to the 150 day verdict requirement you claimed and then ran away from.
What in God's name does Anthony Weiner have to do with FNMA?
Is there some bizarro-world conspiracy theory you are promoting that claims otherwise?
No, it is not proper procedure for another plaintiff in another case to provide content for an appeal that is pending.
JMHO.
Bullshit, I clearly stated the exact opposite.
It is Fairholme's attorneys that are leaving Judge Sweeney exposed to being discredited because she believed their crap.
JMHO.
Just like the first cache of 43 "crucial" documents that were released and proved NOTHING. The delay is the endless pursuit of 000's of documents in hopes that if you throw enough up in the air, something might stick to the ceiling.
JMHO.
That's because Lamberth correctly ruled to dismiss because HERA did not permit judicial review. It made no difference what discovery turned up. It was all "moot".
LOL.
JMHO.
So plaintiffs admit that the discovery documents crucial to the Perry Appeal must be provided from the unrelated Fairholme suit or the Perry decision may be prejudiced? Why didn't the Perry attorneys pursue discovery for those documents?
Doesn't this plaintiff admission absolutely PROVE why the government's appeal of the Motion to Compel is 100% slam-dunk valid?
Why of course it does. Thanks, Glen.
JMHO.
It's okay, Glen. I understand things very well. You are under a lot of pressure. And the DOJ entering the Fairholme matter must be very concerning to you, too, now. There is added stress when the hunter suddenly may become the hunted in "The Most Dangerous Game."
Your gaffe regarding Florida's Sunshine Law and your gaffe regarding auditor accountability is no worse than and largely consistent with your earlier S/A headline gaffe, yesterday, asserting a Perry Appeal verdict was "imminent" despite their being no public evidence of that. Did I miss something, today, perhaps? NAH! But, hey...
Good luck. I never cheer for the misery of another human being. I think preferred shares will still finish in the money in the eventual liquidation sweepstakes @ somethingonthedollar, sometime in early 2019. I'm fine with that. It was always in my investment thesis.
JMHO.
Is that why YOU libeled or demeaned and insulted Judge Royce Lamberth for over a year on this board after his dismissal ruling?
"Oh... that's different..."
No it isn't. I don't see anyone here insulting Judge Sweeney. Certainly not me. I have profound respect for her ability to calmly navigate a theatre of the absurd, three year process that now may have her career at some considerable risk, possibly even having to soon turn in her judicial robes for a metermaid's uniform in the District of Columbia. She was fed a "Bill of Goods" by Fairholme attorneys and ate too much at their buffet station. Now she may pay an extreme price for trying to be "fair" in a pointlessly complicated quagmire of interlocking directorates and head faints where tagteam litigation co-ops are trying to "game the judiciary" with discovery objectives pursued in one court to benefit proceedings in another court.
Can I prove that? Nope. Do I think it happened? Well, let's just see how the Department of Justice plays its hand in the Motion to Compel appeal. I will have a better, more informed opinion after that adventure concludes. Soon.
JMHO.
No such documentation is needed or relevant. It is an indisputable FACT that the government took over both GSEs and there is no credible information to allege this was unintended or accidental. And the only information in any of the documents being sought by plaintiffs could only prove the takeover was intentional.
Why can't you just make a rare admission that the document discovery has nothing to do with the claims in Fairholme? I don't see that as asking so very much.
JMHO.
Sure. Except the government is not denying that it took over the GSEs; it clearly did what it intended to do. So we can toss that part out.
As for the other issues like contract claims, fraud, fiduciary breach... not one of those is claimed in the Fairholme case. So why would documents be required under discovery that have no bearing on a takings claim?
I think this is a VERY important issue because it could render Judge Sweeney's Motion to Compel "moot" as you might be prone to saying. Part of the mandamus seems to be the contention that Sweeney is controlling documents that are going to to other cases which, if they were needed by Fairholme, too, might be acceptable practice. But if the documents occupy no pertinence to the Fairholme case before her court, it would seem to make any intervention on her part improper. Sweeney only has jurisdiction over discovery that supports claims before her court.
This actually could be approaching the boundaries of moving for a mistrial.
I am awaiting a STAY order to be filed later today or Monday. It will be interesting to see if Mr. Sammons files a motion, as well.
JMHO.
Why would "intent" matter in a takings claim? Property was either taken improperly, or it wasn't. Right?
Thanks for the reply, by the way. I am really just looking for insight, here, not an argument.
I expect the appeal will rule in favor of government because the documents in question have no relevancy to the takings claims that underpin the Fairholme complaint. Establishing "why" a taking took place is not a requirement to rule on whether a taking either did or did not occur.
I further believe that an in camera/in chamber review of the document cache will conclusively establish this in very short order, explaining government's willingness to immediately provide them without reservation to the Court of Appeals.
JMHO.
Ridiculous, Glen. Really.
"Florida is a sunshine state." Yes, I know this. I live in Florida. The Sunshine Law has to do with state and local government agencies conducting meetings and open sessions viewable by ordinary citizens. It has no relevance to Federal agencies or private business including FHFA, FNMA, FMCC, Deloitte or PWC.
Freddie Mac is the customer that paid PWC for the auditing. The Edwards litigation solely concerns the auditing done for Freddie Mac, and they are entitled to know what was divulged. This maybe an issue to be raised in a different court under contract or other law. Time will tell. "The Mounties always get their man."
All auditors have a responsibility for the accuracy of the information they sign off on as meeting generally accepted accounting standards. They have similar contractual responsibility for similar standards in informing clients of any discrepancies or deficiencies uncovered during the auditing process, and must issue a qualified opinion in the 10-K if problems are uncorrected after being reported.
Your comments go beyond the norm of misleading or ambiguous and have moved over into the patently false category.
JMHO.
"it doesn't matter what the governments motives are"...
Then why does so much of the discovery material deal with issues of motives the government had?
Please help me out, here.
There is actually very little in your post that I disagree with. But some of it I see from an alternative vantage point. I'll try to break it down succinctly.
1. There are valid concerns raised in many camps about the manipulation of numbers and concealment of risks that led to conservatorship. Some blame the government, now some blame the auditors. But the truth is that the blame lies within the GSEs, themselves. Period. The issuance of $ billions in preferred shares in the prior 2 year period is an absolute disgrace.
2. There is ZERO secrecy about many in government wanting to reform housing finance, even including winding down the GSEs.
3. HERA establishes no imperative to wipe out shareholders. In fact, its blatant intent is exactly the opposite. HERA specifies clear conditions for receivership.
4. I have said FOREVER that Amendment 3 was an illegal overreach and should be modified or voided. Do I think budgetary pressure played a role in seizing money to keep the government afloat? Well, I was the only poster on this board that kept bringing up Paul Ryan's published statements indicating this was exactly what was up in 2012. Of course I got reviled and shouted down because my view cast aspersions on the ever-popular Trump campaign element that has dominated board discussions for the last year.
5. Amendment 3 is a TAKINGS claim. It is the key element in the Fairholme suit and a simple black and white question of law that requires no document discovery to be heard by the Court of Claims. Three years of delays have resulted because their attorneys have initiated a wild goose chase for documents that bear little-to-no relevance to their case.
Contrary to often-expressed sentiment to the opposite, I am no blind devotee of everything the government has done in Fanniegate. But I do feel compelled to speak up when the profiteering motive of some leads to a hysteria of condemnation for everything and anything our government does or stands for because, warts and all, this is still the best country in the world to live in. I, for one, stand up during the National Anthem.
I bought FNMAS shares to make a modest profit. My investment thesis had a lot to do with the proliferation of lawsuits beginning with Jacobs, Hindes and the conclusion that the injection of additional layer upon layer of claims, counterclaims and crushing amounts of documents demanded as "discovery" would push FNMA beyond the brink of receivership in late 2017. My bet is that the legal empire has doomed the GSE empire.
I am no hypocrite. I am not cheering for Fannie to fail. If the suits actually prevail, I will see much larger returns than I initially expected. And if all the pfd shares get cancelled and given to support some minority housing initiative, then I'll move on and await the arrival of the next Cabrini Green project. Cheers.
JMHO.
I find your message very hard to respond to. First off, I don't personally think the government gives a hoot about who profits on Fanniegate, be that a hedge fund, a private investor or even themselves. And the "rewarding the banks" inference is equally strange and possibly even naive.
As unpopular as that view is, here, especially among an audience that is largely optimistic investors, I have always maintained that the government's motives arose from two unrelenting objectives. Never again expose the taxpayer to another bailout. And prop up the economy and housing market to save the U.S. financial system. I do not honestly believe that there was any other ulterior motive, most especially including favoring big banks that have been almost relentlessly targeted by Dodd-Frank in the post-crisis era and by government-imposed fines and sanctions.
Let's be honest about investor motives, here. I see many of the same posters here that populated boards of other distressed stocks where the eventual outcome was supposed to be the next American Airlines. The roster could easily compared to the Las Vegas/Wynn list that has been published here, from time to time. Except, sadly, FnF is NOT the next AAL.
The people that chose Fannie/Freddie stock made a bet that has not paid off. That includes both common shares and preferred shares like I own. This may well yet be a six-bagger, as you say, or a ten-bagger, or even something more. Or it may be worthless. That is what investing is all about. The difference is that I recognize my decision was my own. I don't blame government or anyone else for a bad choice I made. I own it.
I see nothing pathetic here, nor do I see any rat holes except those that "investors" chose to pursue themselves. With no encouragement from government.
Maybe it's just time for some to just man up and admit they made bad choices buying this crap.
By the way, I continue to hold my crap with no excuses or blame lobbed at others. No whining wussies, here. I take responsibility for my decisions.
And you?
JMHO.
PWC is possibly in a rock vs. hard place situation because it could easily find itself having an Arthur Andersen moment of demise like the Enron auditor debacle. One teensy whiff of impropriety will set off a scramble among their other clients like ImBev, Toyota, Volkswagen to take an immediate hike to a new auditing firm. And could drive FMCC to pursue an enormous legal remedy against PriceWaterhouseCoopers. These are potentially life-ending developments for the Big 4 firm.
The auditor only has responsibility for the correctness of information presented in the 10-K Annual Report. They have no responsibility for the information presented in stock certificates or sales prospectuses.
Glad you find such hilarity in such a screwed up mess. But one thing you can rest assured on... NOTHING of value will fall out of the Edwards case that will ever benefit you unless you are one of the named plaintiffs.
JMHO.
You conclude incorrectly, as usual. FHFA is not a defendant in Edwards. And YOU are the one that claims they are furious, despite their issuing no such statement that so states. Almost every auditing agreement contains covenants of confidentiality that are not dissimilar to attorney/client privilege in legal matters. FMCC paid a lot of $$$ for its auditing to be performed by PWC. If Edwards clients who sought inside information pertaining to FMCC were, in fact, given protected information, their conservator has every right to know if a breach of confidentiality occurred and seek appropriate remedy in response.
FMCC is one of PWC's 20 largest clients. As the paying client of PWC, they have every legal right to know what arrangement is being made involving THEIR private information. Unless, of course, the info is so useful as to warrant all auditing fees for the period 2008 to 2016 being refunded by PWC. Maybe the Edwards plaintiffs would like to chip in and fund that approximately $300 M tab?
JMHO.
Hate to disappoint you, but so far NO JUDGE has agreed to hear a single case in Fanniegate. Not one. Every decision has been to dismiss.
As for the rules, maybe you should read FINRA before making such a statement regarding regulated behavior by investment managers and fiduciary responsibility for their client's assets.
LOL.
JMHO.
You speak the truth, here. Well recapped.
Someday the litigation wrath may turn on these investment jokers that helped cheat a lot of little guys out of a lot of $$$.
JMHO.
First of all, much of the current spate of litigation stems from investment professionals like Tim Pagliara, Gator Capital, Pension fund administrators and Insurance company investment managers that chose to gamble their client's retirement, pension and savings resources on highly risky investments at a time where reputable sources like Fortune Magazine and Barrons were sounding clear warning alarms. Then, when trouble began to emerge amidst fraud allegations and misstated earnings against both GSEs, followed by the emergence of "foreclosure sale" signs in yards-next-door all across America, we had the new entrant round of "investors" like Arnetia Joyce Robinson who thought they new better than the experts and bought, anyway. Goddam penny flippers!
If you make a bad investment choice, you take the write-off and move on to the next venture. But, NO, we have the "new normal" of recouping by hiring an attorney to SUE to conceal the "investors" role in the decision to buy the crap in the first place.
That's what has been going on, in a nutshell, for YEARS during the Fanniegate saga. There is a CRIME going on and it has nothing to do with any government wrongdoing. This is just Gordon Gecko-vintage Greed 101 wrapped in fancy legalese with a bunch of big legal eagles flapping their wings and trying to scapegoat the taxpayer for a huge settlement that they can skim for retained entry in the One Percenter Club.
JMHO.
Thumbs up on that! If we had Joe Madden instead of Margaret Sweeney deciding Fanniegate, this would have ended several seasons ago. And everyone would have been happy. Gotta love those t-shirts he had done up: "Try Not to Suck Today" which he started when he was still with the Rays where I'm still a season ticket holder and still missing Zobrist).
You miss the obvious. Congress is messed up, politics are messed up, the court system is messed up and Fannie/Freddiegate is FUBAR due to one fact and one fact alone... all of these messes are exclusively in the domain of LAWYERS.
This may be headed directly into the abyss of the Supreme Court with a huge vacancy and an already clogged judicial calendar for SCOTUS. The Court of Appeals for the DC Circuit has a huge pending problem. It has spent months contemplating the Perry Appeal and allegedly was informed by Fairholme that Judge Sweeney's release of documents in her Motion to Compel could bear substantial impact on their decision, pending. That communication does not appear to have been docketed. Now the government has filed intent to appeal to the same court the matter of that same Motion to Compel. Did the Fairholme communication prejudice any decision that court might render. Will they even consider hearing that new appeal or elevate it to SCOTUS level to avoid any concern of conflict or prejudice?
You are correct about "a long time" if the SCOTUS nuclear option becomes the deal-maker/deal-breaker. You would be lucky to have the government's appeal on Sweeney's Motion to Compel make onto the Fall/2017 docket. Then add 3 t0 4 months to hear the appeal, a month or so to write an opinion and then deal with the decision: to remand and consider without the documents... or... remand and consider with the government compelled to produce some or all the documents. All so that Judge Sweeney can decide whether to dismiss or eventually hear the Fairholme suit.
Meanwhile, the Perry Appeal would be stayed pending the SCOTUS ruling as it could pertain to their decision. Then they can rule or wait for new documents to be released that could influence their decision.
What a total trainwreck!
JMHO.
Looks to me like Mr. Sammons maybe is getting handed an early Christmas gifting in all this apparent confusion and never-ending resolution to anything.
JMHO.
You and I are at opposite ends of the spectrum. There is nothing wrong with that, by the way, just expressing that I disagree with your post in its entirety.
1. There is no "huge looming spectacle". There is now a civil matter pending that will attempt to navigate the great divide between an obstinate government not wanting to budge on ANYTHING and plaintiffs that are unwilling to budge on demanding over 100,000 pages of documents that "could" be relevant only in a vastly overblown witch hunt.
2. Neither plaintiffs or the government are pursuing Docugate in some political contest using Fannie/Freddie as the fulcrum to invalidate or re-validate Executive Privilege under the Constitution. The ONLY new element in any of this is the huge quantity of material in play in these wranglings which has absolutely NOTHING to do with the Obama administration being less transparent than its predecessors. The fact is that in earlier times there was no voluminous cache of e-mails, Tweets and e-driven content to either be sought or delivered.
3. The only real impasse in any of this would have been simple to resolve in mediation, years ago. Then pig-headed greed got in the way. Government clearly overreached with Amendment 3 and should have returned to the earlier 10% arrangement with some defined endpoint for conservatorship... not a stupid adamancy for taking "everything forever". The Plaintiff Empire morphed from correcting inequities in Amendment 3 into a grab bag for enormous amounts of compensation for "losses" that for the most part were little more than an illusion. Very few of the "investors" now suing the government ever lost any money on their stock; they just didn't make as much as they think they should have made. And those that did actually sustain losses chose to ignore HUGE warning signs of weakness in the housing market. Sorry, but each side has its skeletons in the closet.
I am not enjoying the show. I see nothing to celebrate here. It's getting to be the equivalent of watching Roman gladiators in the Colosseum playing bean bag toss.
JMHO.
LOL. For how many months, now, have I been saying that Fairholme had a solid case to support its takings claim that required no discovery documents to go to trial? Their pursuit in Docugate has made no sense at all, at least to me.
JMHO.
Government files a 114 page Writ of Mandamus over the document release that will now enter the formal appeals process. Interestingly, it appears that Judge Sweeney actually invited them to do so. She knew; why didn't Fairholme's legal team? Or did they know and just not care?
Now deal with it! Could have been avoided. Too late now. Sorry common shareholders.
JMHO.
Hey, it's now going into TRIPLE OVERTIME! Let's not just have the continuing Fairholme contest in Judge Sweeney's court that has dragged on for over 3 years. Let's add new meddling in the Edwards/PWC case. And avid participation in the Sammons appeal. And, now, the DOJ appeal over the motion to compel that was set off by "action" demands from "the dream team". All brought to you by the esteemed and well paid crew that are now and forever more to be known as "Berko's Jerko's". Who hired these cretins anyway, Glen Badtard? Any idiot with a Google Law degree could see this outcome queued up in the on deck circle.
LOL. What an absolute, total waste of time. Shine up your pfd shares for liquidation, baby. What a cryin' shame this couldn't pay off for all shareholders.
JMHO.
Maybe you are correct that the government's action in PWC is desperate. But maybe it also just lends credibility to NOT responding to documents requested in court proceedings as it could also apply to Fairholme.
JMHO.
I am not sure that "freaked out" is appropriate as a choice of words, but I suspect another issue may be at play in all of these histrionics. PWC is also the auditor of record for Bank of America. Could it be that some conflict of interest issue could be revealed in all this between the GSEs and TBTF banks that somehow got "smoothed out" with convenient accounting mechanisms tied to TARP and QE?
JMHO.
Fairholme attorneys filed a veritable host of motions to appear in the Sammons matter (4 docketed today) in addition to the Roberts matter where another flurry was in play. SOMEBODY is taking this stuff very seriously.
Berkowitz has pending REAL trouble with his huge investment in Sears Holdings and broadly expressed concerns for their ability to survive this holiday season. Can he afford a second meltdown with FnF in the FAIRX portfolio?
I am reminded of the Glen Frey/Don Henly Eagle's classic "Desperado"... much of the lyrical content is highly relevant. "You better come to your senses... (read the rest, if you don't know it from memory).
JMHO.