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Was JB inspired by Collins and Seila Law and specifically Justice Thomas opinion in Collins were he said that the POTUS was able to fire Single Directors at will always?
https://www.foxnews.com/politics/biden-fires-social-security-commissioner-andrew-saul.amp
"President Biden fired Social Security Commissioner Andrew Saul on Friday amid an ongoing dispute over his leadership of the independent agency responsible for administering retirement and disability benefits"
"Sen. Ron Wyden, D-Ore., chair of the Senate Finance Committee, expressed support for Biden’s decision.
"Every president should choose the personnel that will best carry out their vision for the country. To fulfill President Biden’s bold vision for improving and expanding Social Security, he needs his people in charge," Wyden said. "I will work closely with the president to confirm a new commissioner as swiftly as possible to lead this critical agency."
"I consider myself the term-protected Commissioner of Social Security," Saul said.
The White House recited a list of grievances against him.
"Since taking office, Commissioner Saul has undermined and politicized Social Security disability benefits, terminated the agency’s telework policy that was utilized by up to 25 percent of the agency’s workforce, not repaired SSA’s relationships with relevant Federal employee unions including in the context of COVID-19 workplace safety planning, reduced due process protections for benefits appeals hearings, and taken other actions that run contrary to the mission of the agency and the President’s policy agenda," a White House official said in a statement.
The White House said he was fired after refusing a request for his resignation. Deputy Social Security Commissioner David Black was also asked to resign and he complied.
The Washington Post was first to report Saul's dismissal. He questioned the legality of Biden's decision in an interview with the newspaper and said he plans to be at work on Monday."
I THINK WE ALL KNOW WHO IS GOING TO WIN THIS BATTLE, THE UNITARY EXECUTIVE!
That's right! I just read an article that said the real reason Charlie Munger and Warren Buffett invested was to have more time to do the things in life that they wanted to do! Enjoy your golden years!
“We made a lot of money but what we really wanted was independence,” Buffett, the 90-year-old investing icon, told CNBC’s Becky Quick in an interview that aired on Tuesday as part of the special, “Buffett & Munger: A Wealth of Wisdom.”
https://www.cnbc.com/2021/06/30/buffett-and-munger-this-is-what-we-really-wanted-more-than-money.html
Smart, very smart! Another problem is the phenomenon that cash is trash! There is ONLY two things that you can do with the sales proceeds, save it or spend it! If you plan on spending it, problem solved! If you plan on saving it, can you really get the same cap rate on a risk adjusted basis?
Guido, you find great stuff!
That's the dilemma for many is where will they go if they sell as the market currently has only a 2 months supply...
Austin, Tx is THE HOTTEST MARKET RIGHT NOW! I think YOY price appreciation was 43%! They are seeing alot of Californians move there especially from SF, as Apple, Tesla, et.al. realize that low governmental regulatory interference with business, no personal state income tax, and readily available hi tech workers in a very liberal city, checks off a lot on their lists! More and more people will start listing their homes for sale as time goes by, especially if mortgage rates stay low. Are you able to get any listings? Did you read this in the WSJ today?
Warning to the Real-Estate Cartel
"The Justice Department backed out last week of a proposed settlement with the National Association of Realtors to take a fresh look at the notoriously high commissions consumers pay real-estate agents. The move sent shock waves through the housing industry. The government occasionally brings an antitrust case and later decides to dismiss it. But never have federal antitrust authorities agreed to a proposed settlement only to back out after receiving public comment.
The real-estate lobby called the move "an unprecedented breach." But there's a much larger concern for legacy brokers than the novelty of the about-face. The signal from Washington is that antitrust enforcers are prepared to dismantle the collusive practices that burden U.S. homeowners with brokerage costs two to three times as high as in the rest of the developed world.
As authorities prepare a fresh inquiry, they should give close scrutiny to the bizarre way Americans pay real-estate agents. Unlike any other business, when a homeowner decides to sell, he must agree to pay two agents -- his and the buyer's. It's a one-of-a-kind arrangement. The buyer agent is supposedly representing the buyer, yet is compensated by the seller. In other agency businesses, each client pays his own agent. If you want a white-shoe law firm to represent you, you can pay for one. But a local practitioner may do just as well, and clients have that option as well. The result is real price competition.
Real estate, by contrast, has a third-party payment system, which produces predictably inflated prices. Many home buyers would pay a lot less than 2.5% to 3% of the price of the home, the standard rate for buyer agents. Last year, 97% of buyers started their home search online, without the assistance of an agent.
Increasingly, home buyers are finding their next home first, and then contacting an agent second. But buyer agent fees can still be as high as $15,000 on the purchase of a $500,000 home because the buyer doesn't set the price of his agent. The seller does, and he's pressured to pay to the hilt.
A training manual from one of the nation's largest brokers lays it all out. It advises agents representing sellers to tell their clients to offer 2.5% to 3% to buyer agents. After all, "if an agent has 10 different houses, nine of which come with a 3% commission, one of which comes with a 2.5% commission, which one do you think they're going to show?" YouTube contains dozens more videos of similar training from other brokers and real-estate coaches. It's the way the industry operates and the principal reason real-estate commissions remain at pre-internet levels while transaction costs have hit the floor across the rest of the service economy.
The industry lobby has two defenses for the mandatory commission rules it established decades ago and continues to enforce. The first is that the arrangement has been around so long. But there's no easement under federal antitrust law for long-running violations. And unlike other current targets of antitrust scrutiny, holding the real-estate industry accountable requires no departure from the well-established consumer-welfare standard. Industry rules have created the most obvious consumer welfare harm -- nosebleed prices.
Fans of the outmoded commission structure also claim there's solace in the fact that it's the seller who pays the agent fees because at least the buyer doesn't have to pay. That defies logic. When a home is sold, it's the buyer who pays. What industry defenders are really saying is that buyers have the privilege of borrowing more money to pay for homes because the inflated cost of agent services are baked into the sale price.
The pandemic real-estate economy has been tough on aspiring home buyers. But help may be on the way.
---
Mr. Toth is general counsel of REX, a digital real estate startup based in Austin, Texas, which submitted a public comment recommending that the Justice Department back out of the settlement.
Credit: By Michael Toth"
The FHA already dominates this space and they have an EXPLICIT GUARANTEE. It seems that our JPS friends are always advocating the instant recap, I know why .
Thanks, Guido, I just hope that the Shareholders have the opportunity for a trial to expose the governments true motivations behind the nws and the September 06, 2008 takeover of these two private corporations!
Found this today in a 2016 Law Review Journal: "What is reasonable
for investors in a world of significant market failures with serious
macroeconomic consequences must surely reflect regulatory responses that
are otherwise valid. Of course, that dynamism cannot be unbounded and
the federal government’s authority to intervene must reflect conditions that
justify that intervention.". Pg. 741 Maryland Law Review
Volume 75 | Issue 3 Article 4
Resetting the Baseline of Ownership: Takings and
Investor Expectations After the Bailouts
Nestor M. Davidson
Follow this and additional works at: http://digitalcommons.law.umaryland.edu/mlr
Part of the Banking and Finance Law Commons, and the Constitutional Law Commons
This Symposium is brought to you for free and open access by the Academic Journals at DigitalCommons@UM Carey Law. It has been accepted for
inclusion in Maryland Law Review by an authorized administrator of DigitalCommons@UM Carey Law. For more information, please contact
smccarty@law.umaryland.edu.https://digitalcommons.law.umaryland.edu/mlr/vol75/iss3/4/?utm_source=digitalcommons.law.umaryland.edu%2Fmlr%2Fvol75%2Fiss3%2F4&utm_medium=PDF&utm_campaign=PDFCoverPages
This I believe may be relevant in the COFC, the governments claim and the SCOTUS wording in Collins that the nws was justified because of the "death spiral", is contrary to the facts in this case already obtained through discovery.
Since the nws was approximately 4 years subsequent to the emergency financial crisis, I think this horse may have legs to run, but like everyone it's hard to believe that the government is capable of believing that the "King or Sovereign can do no wrong!", and no court to date has declared relief to be granted.
The Plaintiffs can show economic harm via the nws, unlike the AIG case where the court found for Hank Greenberg (i.e., there WAS A TAKING involving AIG shareholders, but the court ruled, HaHa you would have gone bankrupt anyway without the bailout and therefore no compensation for the Taking Claim!).
"Ultimately, although Starr proved its
exaction claim, Starr could not show that it suffered any economic loss, and
thus could not recover any damages.77
The proposition that resolved the Starr case—that failure to show
economic harm from a governmental action yields no compensation—is a
well-recognized aspect of regulatory takings jurisprudence. It certainly
informs one prong of the Penn Central regulatory takings test, which is the
“economic impact of the regulation on the claimant.”78 The fact that a
governmental action causes no economic harm does not immunize the
government from all potential takings claims, but factors heavily into the
threshold calculus. More fundamentally, the Supreme Court has made clear
that, even if a taking might have occurred as an abstract matter, a party is
not entitled to just compensation absent actual economic harm.79 In short,
the theory on which the challenge to the AIG takeover was resolved
strongly suggests that federal intervention in the face of imminent
bankruptcy and a significant, or even entire, loss of investor equity
ultimately yields no compensable takings for those investors.80"
MCLEAN, Va., July 08, 2021 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.90 percent.
“Mortgage rates decreased this week following the dip in U.S. Treasury yields. While mortgage rates tend to follow Treasury yields closely, other factors can be impactful such as the labor markets, which are continuing to improve per last week’s jobs report,” said Sam Khater, Freddie Mac’s Chief Economist. “We expect economic growth to gradually drive interest rates higher, but homebuyers and refinance borrowers still have an opportunity to take advantage of 30-year rates that are expected to continue to hover around three percent.”
News Facts
30-year fixed-rate mortgage averaged 2.90 percent with an average 0.6 point for the week ending July 8, 2021, down from last week when it averaged 2.98 percent. A year ago at this time, the 30-year FRM averaged 3.03 percent.
15-year fixed-rate mortgage averaged 2.20 percent with an average 0.7 point, down from last week when it averaged 2.26 percent. A year ago at this time, the 15-year FRM averaged 2.51 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.52 percent with an average 0.2 point, down from last week when it averaged 2.54 percent. A year ago at this time, the 5-year ARM averaged 3.02 percent.
The PMMS® is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.
“the theory of Communists may be summed up in the single sentence: Abolition of private property.” Karl Marx, The Communist Manifesto
This is what happens when the federal government decides to stick it to the property owners in an Unconstitutional CDC Eviction moratorium:
"The median national rent climbed 9.2% in the first half of 2021, according to Apartment List.
Surveys by the New York Fed and Fannie Mae suggest renters are braced for further hikes of 7% to 10% in the coming year.
Another effect of rental inflation is to widen inequalities in the housing market that play into wider gaps in income and wealth. The pandemic recovery has been labeled “K-shaped” by some analysts because its benefits skewed toward the rich."
https://www.bloomberg.com/news/articles/2021-07-06/soaring-u-s-rents-are-the-sticky-inflation-with-staying-power?srnd=premium
Gee Wally, I wonder if GFees doubling since the 12.75 year "temporary conservatorship" began has ANYTHING to do with housing affordability?
That's right, expropriation by governments leads to scarcity!
Nice find, the person advising JB about affordable housing said this, "In conclusion, I want to reiterate three points research shows will create a winning combination to increase
the affordable housing supply in our country: addressing exclusionary zoning practices, supporting public
investment to support affordable housing, and continuing efforts to protect health and well-being of all
communities."
https://www.urban.org/research/publication/winning-combination-increase-multifamily-housing-supply-local-regulatory-reforms-federal-rental-subsidy-and-affh
I think more direct federal government cash subsidies via HUD and LIHTC'S should be used to address the affordable housing market NOT raping the twins of their already anemic capital. We'll see, should be interesting who JB picks, he may just leave Sandra L Thompson in but I'm sure Sherrod Brown and others will press him for someone else.
I hear you! Do you think that the current litigation effected the 4th Amendment in anyway or was it simply a desire of the previous adminstration to strip free money from the current administration?
If there is a trial in the COFC that zeros in on the motivations of Uncle Suggy to Nationalize the gses and the Judge fires off some statements from the bench that he'd rather see the parties settle than issue a massive judgment, that could be a motivation for the administration in power to do the right thing.
At some point their may be enough capital on the gses books for the government to realize it's time for them to cash out and that could also motivate them to do the right thing.
But holding the owners of these two private corporations hostage for all these years after their Corporations neatly vacuumed up all the garbage and toxic PLS from the GFC and provided a desperately needed vibrant Secondary Mortgage Market last March and provides the Federal Reserve another tool in their tool belt to influence long term interest rates IS WRONG!
Eventually the government will realize that having a 1st loss capital position is a good idea.
Hopefully not, but a government agency that has THIS MUCH POWER CAN IMPLEMENT THE DEATH BY A THOUSAND CUTS STRATEGY! I think the current Acting Director has no intention of acting recklessly like Congressman Watt did! As a 20 year veteran of the GFC at FDIC, she understands that the road to good intentions (if you have a pulse you have a mortgage) can lead to the GFC and capital in a 1st Loss Position is beneficial.
Of course I think Jim Parrot would be a fine fine confirmed FHFA Director
We will see, but with a deadly virus floating around the world and the economy in flux, they have plenty of other more important national matters to deal with...
When if ever to end the 12.75 year Conservatorship is at the sole discretion of the Conservator, since the Congress grants so much latitude in decision making by these 4th branch of government decision makers, I don't know if we could get a Judge to end it given the even broader power the SCOTUS gave it the other day!
From what I understand there are only two ways to provide infusions of cash into corporations either debt or equity. Preferred shares are considered equity aren't they?
According to the SCOTUS ruling, under HERA, the FHFA could LEGALLY sell ALL THE ASSETS OF THE GSES TO THE UST FOR $1. Why? Simply because it is in the interests of the FHFA or the public it serves. The shareholders could file a Takings Claim if that happens, same thing with the bogus nws.
The gses are still in conservatorship because their conservator agreed to give away in CASH ALL OF THEIR NET INCOMING INTO PERPETUITY WITH THE 3RD Amendment. The 4th isn't much better.
Clearly the government never intended to act as a Conservator but focused purely instead on the Incidental powers in HERA that allowed it to do WHATEVER IS IN THE FHFA'S OR THE PUBLIC IT SERVES BEST INTERESTS.
I think the shareholders have a great case for the Takings Claim and if we get a Judge in the 5th Circuit that has figured this out, then we could see a recovery in the Billions on the SOP claim!
It will be interesting going forward to see if this administration continues to demand the shakedown of the gses or if they do the right thing and work towards the goal of building capital in a 1st Loss Position.
MC in his exit interview on Kudlow thinks the new administration will continue the shakedown.
That the SCOTUS could possibly believe that the Congress agreed to Nationalize is disturbing! I'm going to start brushing up on my Marxism and run for office! This will be mighty popular, "“You are horrified at our intending to do away with private property. But in your existing society private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths. You reproach us, therefore, with intending to do away with a form of property, the necessary condition for whose existence is the non-existence of any property for the immense majority of society.
In one word, you reproach us with intending to do away with your property. Precisely so: that is just what we intend.”
? Karl Marx, The Communist Manifesto
But according to the black robbed 9, the US CONGRESS gave a federal agency the greenlight to Nationalize two private corporations via the INCIDENTAL POWERS PROVISION UNDER HERA! I'm sure that was EXACTLY what the US Congress wanted!
Notice how the Alito opinion fails to address ANY OF THE WELL REASONED OPINION OF THE 5TH CIRCUIT EN BANC RULING ON THIS!
The Collins case was sitting in the SCOTUS inbox for almost 2 years!
The federal government, with the Net Worth Swipe gets the best of both worlds, TOTAL CONTROL and not a dime of federal government liability! The credit ratings agencies may at some point realize that even though the federal government SAYS it wants to have them exit Conservatorship, their ACTIONS for the previous 12 years and 10 months show that is NOT the case and then put the entire federal government debt under a CREDIT WATCH.
The current lawsuits and the possibility of having a federal government debt downgrade may be the ONLY reasons the federal government does not go back to a quarterly cash sweep.
The Warrants theoretically could be sold to a 3rd party.
But I think you bring up a good point, what is the Preferred Stock Purchase Agreements for Fannie Mae and Freddie Mac?
It is technically an EQUITY INVESTMENT FOR THE US FEDERAL GOVERNMENT AND NOT A DEBT INVESTMENT. The PSPA dominates the Capital Stack as no one gets a dime until the PSPA holder is satisfied.
I think the credit watch agencies at some point may wake up and realize this THAT GIVEN THE FEDERAL GOVERNMENTS EQUITY INVESTMENT AND THEIR COMMITMENT TO ADD OVER $100B MORE AND THEIR RELUCTANCE TO END THE CONSERVATORSHIP THAT THIS IS A DEFACTO NATIONALIZATION AND THE US GOVERNMENT OWNS THE TWINS!
I think that's right, I am not sure the exact time periods covered by the Discovery Orders in the various litigation but we have already seen quite a bit of governmental actors engaged in the extraction and taking of our property.
I'm pretty sure in the Collins case, no Discovery has taken place in the implementation of the nws as opposed to its creation. This could mean access to intra governmental communications involving DJT and BO, when the FHFA Director was Senate Confirmed.
They may get (or already have gotten) intra governmental communications and documents regarding Lockhart and Geithner but if they haven't and can convince the Judge in the 5th Circuit that the Nationalization was the plan from Day 1 that would be useful as well.
I think the only confirmed FHFA Directors were Lockhart, Watt, and Calabria.
Intra governmental communications like emails discussing the situation or public statements by Administration officials. Ben Carson on Fox Biz told Maria B or someone, what has happened to the shareholders is just terrible!
Remember SM early on said, "We need to get them out of government control!"? But they couldn't put MC in on Day 1, could they?
Trump would probably volunteer to testify about what he thought about a leftover federal agency director left over from his predecessor, that he wasn't able to fire because of the SOP VIOLATION!
We know shortly after MC came in the cash sweep was ended! I wouldn't say that the SCOTUS decision was a total loss, especially if we can get some more Discovery and ultimately shine a huge spotlight in an open trial on the harm we have incurred by these bad actors in the government and ultimately some restitution!
The sad part is they would have taken MORE BUT FOR THE ACCOUNTING RULE! And in essence they have controlled EVERY DAILY ASPECT OF THE GSES INCLUDING TAKING EVERY DIME OF THEIR PROFIT THROUGH CASH SWEEPS AND THE LP FOR NINE YEARS!
Meanwhile, the WSJ, Fox Biz news, Bloomberg, et. al., can't invest the money in quality reporting to see WTF is happening here!
My biggest fear is that the new administration decides to reimplement the cash sweep again for their latest transfer of wealth program (why would we need ANY CAPITAL TO INSURE $7.2T in mortgages anyway?) and by the time the courts get around to it the current administration will be gone AND SO WILL THE SWEPT FUNDS THAT SHOULD HAVE BEEN USED TO BUILD CAPITAL FOR A 1ST LOSS POSITION!
You ain't kidding! DID THE SCOTUS EVEN READ THE MUCH BETTER REASONING BY THE 5TH CIRCUIT EN BANC RULING? Obviously, the SCOTUS is clueless, their strained ruling seems like the outcome came 1st and the legal "reasoning" behind it in a far distant last!
The SCOTUS has given their blessings to all future government Conservators and the FHFA to NATIONALIZE PRIVATE CORPORATIONS IF DA GUBMINT THINKS ITS IN THEIR BEST INTERESTS OR FOR THE GOOD OF THE PUBLIC IT SERVES!
Good luck Uncle Suggy during the next financial calamity as BUSINESSES FACED WITH THE CHOICE OF ALLOWING THE GOVERNMENT TO APPOINT A CONSERVATOR WOULD RATHER LAY OFF EMPLOYEES AND CUT EXPENSES TO THE BONE!
I thought Judge Sweeney segregated the various hats that FHFA wore, right? Those hats, as I recall were FHFA-A, FHFA-B, or FHFA-C. So which one are you talking about?
"In support of that interpretation, the shareholders first
contend that the Recovery Act should be read to restrict the
removal of an Acting Director because the Act refers to the
FHFA as an “independent agency of the Federal Govern-
ment.” 12 U. S. C. §4511(a) (emphasis added). The refer-
ence to the FHFA’s independence, they claim, means that
any person heading the Agency was intended to enjoy a de-
gree of independence from Presidential control.
That interpretation reads far too much into the term “in-
dependent.” The term does not necessarily mean that the
Agency is “independent” of the President. It may mean in-
stead that the Agency is not part of and is therefore inde-
pendent of any other unit of the Federal Government."
It looks like they formed an opinion before oral arguments that they never thought that the Acting Director was unconstitionally insulated, "In the Re-
covery Act, Congress expressly restricted the President’s
power to remove a confirmed Director but said nothing of
the kind with respect to an Acting Director. And Congress
might well have wanted to provide greater protection for a
Director who had been confirmed by the Senate than for an
Acting Director in whose appointment Congress had played
no role."
They ignored the fact that the POTUS had to pick 1 of 3 Acting Directors who was in turn selected by the FHFA Director. Doesn't seem like the POTUS could put someone in who necessarily sees eye to eye with him which is the Separation of Powers problem to begin with.
They took a pure textualist approach in reading HERA and relied on precedent to say that if HERA doesn't say they can't remove the Acting Director, then the POTUS can.
"That omission is telling. When a statute does not limit
the President’s power to remove an agency head, we gener-
ally presume that the officer serves at the President’s pleas-
ure. See Shurtleff v. United States, 189 U. S. 311, 316
(1903). Moreover, “when Congress includes particular lan-
guage in one section of a statute but omits it in another sec-
tion of the same Act, it is generally presumed that Congress
acts intentionally and purposely in the disparate inclusion
or exclusion.” Barnhart v. Sigmon Coal Co., 534 U. S. 438,
452 (2002) (internal quotation marks omitted). In the Re-
covery Act, Congress expressly restricted the President’s
power to remove a confirmed Director but said nothing of
the kind with respect to an Acting Director. And Congress
might well have wanted to provide greater protection for a
Director who had been confirmed by the Senate than for an
Acting Director in whose appointment Congress had played
no role."
Sandra L Thompson is more than qualified and has FDIC experience and was with the FDIC during the GFC and FHFA since 2009. The only problem with her or any replacement is that they will start, "giving the gses money away", according to MC in his exit interview with Kudlow the other day....
A potential Takings Clause Claim if Sandra gets a little too aggressive in anti-shareholders actions by the FHFA?
The SCOTUS ruled that the nws was a valid act of the FHFA Director under HERA's incidental powers provision that they may do whatever is in the FHFA'S INTEREST OR THE PUBLIC IT SERVES. Excluding the shareholders from the capital structure should have some unconstitutional Takings Claim implications.
Unconstitutional Takings Claims can ONLY BE HEARD in the Court of Federal Claims (COFC). As I recall this is what J. Sweeney's court is still working on with a new younger Judge.
The Collins case is still alive and the only issue to be decided on remand is whether or not the Collins Plaintiffs can obtain a remedy for the harm caused by the POTUS not being able to have control over any confirmed directors.
"...it is still possible
for an unconstitutional provision to inflict compensable
harm. And the possibility that the unconstitutional re-
striction on the President’s power to remove a Director of
the FHFA could have such an effect cannot be ruled out."
The answer to that question may involve the court allowing the shareholders expanded Discovery to include all periods covering confirmed FHFA Directors.
"Were it not for that pro-
vision, they suggest, the President might have replaced one
of the confirmed Directors who supervised the implementa-
tion of the third amendment, or a confirmed Director might have altered his behavior in a way that would have bene-
fited the shareholders.
The federal parties dispute the possibility that the uncon-
stitutional removal restriction caused any such harm. They
argue that, irrespective of the President’s power to remove
the FHFA Director, he “retained the power to supervise the
[Third] Amendment’s adoption . . . because FHFA’s coun-
terparty to the Amendment was Treasury—an executive
department led by a Secretary subject to removal at will by
the President.” Reply Brief for Federal Parties 43. The par-
ties’ arguments should be resolved in the first instance by
the lower courts.26"
The government will likely file a Motion to Dismiss saying that the POTUS had plenty of control over the nws because he controlled the UST.
Since the nws is legal it means all shareholders suing on the LEGALITY of the nws are banned by the anti-injunction clause of HERA.
BUT THE US CONGRESS CAN NEVER PREVENT ANY US CITIZEN FROM SUING AND OBTAINING A COURT ORDER BASED ON A CONSTITUTIONAL VIOLATION OF THEIR RIGHTS.
Da gubmint doesn't want an extra $7.2T added to the federal debt! The current status quo continues the defacto NATIONALIZATION of the twins and after 12.75 years with no end in sight and mushrooming additions to the federal debt from deficit spending, could prompt the credit ratings agency to put Uncle Suggy on a credit watch...
Tim Howard's Amicus Brief in Collins lays it all out, let's hope Justice prevails in the end, given what we know I think it will in the end!
"A maximum of 79.9% of all shares was chosen in consideration of an accounting rule that
would require the federal government to take the GSEs onto its balance sheet if it
acquired a stake in them of 80% or more. Jester et al. (2018) have insisted that, absent
this rule, the authors, who served as financial regulators and designed the SPSPAs during
the crisis, would have sought to give taxpayers full ownership of the GSEs. The authors
opted for warrants to purchase only 79.9% of all shares, however, because they believed
that the risk of “adding trillions of GSE debt and guarantees to the federal balance sheet”
far outweighed any potential benefit of owning an additional 20% of shares (Jester et al.
2018)."
Source: Bottom of pg. 339, The Journal of Financial Crises
Volume 3 Issue 1
2021
The Rescue of Fannie Mae and Freddie Mac-Module B: Senior
Preferred Stock Purchase Agreements
Daniel Thompson
Yale University
Louie, it looks like this was da gubmints game plan, Nationalization of the gses, which the SCOTUS said was within their authority as a Conservator under HERA. But it doesn't prevent the shareholders from suing for a Takings of their property under the 5th Amendment!
Right! I should technically have said given the recent SCOTUS Collins decision. David Thompson was never able to get Discovery Documents, including intra governmental communications relating to time periods involving the confirmed FHFA Director and damages flowing from it. I am pretty sure that he will ask for them. Was Watt and MC the only Senate confirmed FHFA Directors?
No question that the LP CONTINUES THE UNCONSTITUTIONAL TAKING OF THE SHAREHOLDERS PROPERTY!
Post Collins, CAN THE COLLINS PLAINTIFFS ASK THE JUDGE TO AMEND THEIR COMPLAINT TO INCLUDE RELIEF FROM THE UNCONSTITIONALLY INSULATED DIRECTOR AND THE CREATION OF AND IMPLEMENTATION OF THE 4TH AMENDMENT? This is above my pay grade and I'd rather you not ask David Thompson, unless you are a litigant as I am pretty sure he is super busy designing and strategizing a new attack on this Unconstitutional infringement of our property rights!
Here's what the FINANCIALLY CLUELESS SCOTUS SAID: "And because that amendment eliminated the
variable dividend formula that had caused the sharehold-
ers’ injury, it is necessary to consider whether the fourth
amendment moots the shareholders’ constitutional claim.
It does so only with respect to some of the relief re-
quested. In their complaint, the shareholders sought vari-
ous forms of prospective relief, but because that amend-
ment is no longer in place, the shareholders no longer have
any ground for such relief."
This is typically the way it is in multi billion dollar Litigation especially involving major blue chip corporations and da gubmint with their virtually unlimited resources. But the trials would expose some of the governments bad acts we already know about, but as we have seen BOTH SIDES litigate and exhaust all the issues they think are subject to preliminary motions prior to the trier of fact deciding on the merits of the case. Once opening statements begin, look out because that's when the fireworks can occur.
Typically on the eve of trial after years of exhaustive discovery Documents, depositions, and fact finding and with all the preliminary motions out of the way, BOTH parties generally have a good idea of how the Judge will rule, but you never know until the hammer falls...
I think in the AIG case, Timothy Geithner and Ben Bernanke testified.
The great thing about being shareholders in ANY PUBLICLY TRADED CORPORATION is we have ZERO liability for the liabilities of the corporations we choose invest in.
Corporations and governments that own 80% or more of other corporations are viewed for accounting purposes as owning those corporations and their liabilities go on the balance sheet of the parent corporation. That includes for the guarantee to the $7.2T in MBS OUTSTANDING. Uncle Sugar has ALWAYS HAD AN UNENFORCEABLE IMPLICIT GUARANTEE ON the MBS the gses issues. In 2008, the Chinese and Russians held $100's of Billions of MBS and called up old Hank Paulson and said, "We've read the Prospectus that comes with each MBS and it says NOT GUARANTEED BY UNCLE SUGAR, we are thinking about unloading these now, but before we do, can you tell us if this is really implicit or would the UST be interested in making sure we don't lose any money?".
By passing HERA and taking over the twins ever since, Uncle Sugar has shown that the government guarantee is still implicit but works in an explicit manner. Why? BECAUSE EVERYONE KNOWS THAT UNCLE SUGAR IS NOT GOING TO STAND BY AND WATCH THE $11T MBS MARKET FALL INTO DEFAULT CITY, IT WOULD BE HORRIBLE FOR THE SECONDARY MORTGAGE MARKET AND AMERICANS WOULD NOT HAVE ACCESS TO THE LOWEST COST OF FUNDS AVAILABLE FROM INVESTORS AROUND THE WORLD.
MC and SM continued to try to sell the EXPLICIT GOVERNMENT GUARANTEE until the very end of their administration as the solution for the "flaws in the structure of housing finance."
But the US CONGRESS is reluctant to give the EXPLICIT GOVERNMENT GUARANTEE because throwing another $7.2T of federal government liabilities on the federal government balance sheet could result in debt downgrades on all the future borrowing costs of the UST.
SO, generally when the federal government owns 80% of a private corporation, they become liable for the corporate liabilities of that corporation. Here, the gses guarantee the credit risk on $7.2T in the mortgages underlying the mbs. But not if they own 79.9%!
I think the warrants expire in 2028, but given the current situation with unknown billions in potential government litigation liability by shareholders couple with the onerous terms of the SPSA, I don't think that the warrants are even an issue.
I don't think the FHFA is always a government actor, for instance I think the Sisti case doctrine still sands, otherwise it could be difficult to impossible for the gses to do a court foreclosure on mortgages...
I'm guessing that David Thompson will say something like this, "Judge given that the Discovery to date was focused on the IMPLEMENTATION of the nws, we are asking for expanded Discovery Documents to include intra governmental communications for all time periods that include confirmed directors, in light of the SCOTUS ruling."
Of course, da gubmint may or may not take another crack at a Motion to Dismiss, based on some new legal analysis they've come up with given the SCOTUS ruling.
So yeah mega corporate and gubmint litigation involving hundreds of billions of dollars takes time.
IN THE MEANTIME WE RETAIN EARNINGS ON THE BALANCE SHEET.