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ROP is still alive - Thompson wants to amend the complaint to add an Appropriations Clause violation as a cause of action .
https://www.glenbradford.com/2023/07/rop-v-fhfa-3/
Robert - Thanks for the heads up on the 2023-2024 Calendar!
Eternal Paitence - you think that the FHFA is taking capital level comments as part of the Single Mortgage comments? It seems like Franklin Templeton thinks so. I would encourage everyone to read that comment letter. I could not get a good link for that Letter - it looks really interesting but I just skimmed it at first glance.
Wow! Need to check that out littlefishFMCC! Thanks
You are right Glenn - UST will be required to restructure "their" equity. The SPSA will have to be written down and it is the only fair remedy for the Unconstitutional acts of the UST.
Thanks for sharing Guido! Thanks for all your efforts!
That is a great Tweet - TheYuckyOne came up with a very delectable menu of hypocrisies as a reply to the House Financial Services Tweet.
Good Morning Barron4664
Thank you for your advocacy and for the time and money you have spent for our cause. We all should do what we can.
Thanks again!
Great perspective Ace Trader - Thanks!
I agree with you Ace Trader. SCOTUS boxed itself in with Collins but I am suprised they did not take up Rop. Do you have any opinion on why they did not take up Rop?
Hi DCBill,
If the JB Admin want to take over the GSEs by an Admin action they will need to settle the lawsuits first? Otherwise an Admin action will be stalled by Constitutional challenges - wouldn't you expect a MQD lawsuit now challenging the LLPA fee structure because it favors borrowers with poor credit scores at the expense of borrowers who have worked hard to maintain a high credit score? If the JB Admin proposes some type of Admin action to make up for the failings of the CRA and to promote DEI objectives there will be MQD challenges which will be added to the existing Separation of Powers challenges.
Hi Glenn, This valuation is based on the stock price - is that why you continue to say that the common is worthless and will be crammed down into oblivion? You seem to want to stock prices for the common to go to zero?
Good Morning Rodney5
Thank you for all your research and work on behalf of GSE shareholders.
I apologize for not following up earlier about the shareholder lists but I do not think I would have an easier time getting the information nor do I think it is material to our cause at the current time. Unfortunately, the management company for the Growth Fund of America has sold all of its shares and taken their tax losses so we do not have a known large common shareholder except Ackman at this point.
In the near term the most important shareholder action is the Lamberth court case and it is clear that the class action lawyers have access to all the FMCC common shareholders. Although we probably have 50/50 odds at best it is our best near term catalyst for some shareholder activism. If shareholders win perhaps we may see a large holder appear. I know the potential return for FMCC is small but it is a sizable percentage of the current stock price.
At this point I am just trying to highlight the factual history of the GSEs and add balance to the discussion regarding the future prospects for GSEs shareholders.
Thank you so much for your efforts - I believe they will be rewarded but like many things in life - " timing is everything". Keep the faith and thank you again!
New Report About the GSEs:
https://www.glenbradford.com/category/uncategorized/
This excerpt below is obviously not true - the GWB Admin had planned to Nationalize the GSEs as early as March 2008. :
"However, the legislation authorizing its creation, the
Housing and Economic Recovery Act, would not pass until
July 2008, in the middle of the world’s most devastating
financial crisis in decades. While in Beijing for the 2008
Summer Olympic Games, Paulson learned that “Russian
officials had made a top-level approach to the Chinese suggesting that together they might sell big chunks of their GSE
holdings to force the U.S. to use its emergency authorities
to prop up those companies. The Chinese had declined to go
along with the disruptive scheme, but the report was deeply
troubling — heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets.”3
The emails and Memos show that there was a clear plan to Nationalize in March - not some fear that the Chinese were going to sell MBS
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Delusional? It was clearly delusional to expect the GWB Admin to disclose their plan to Nationalize the GSEs in March 2008 to Merrill Lynch and the underwriters of FNMAT and the other JPS series sold in the late Spring of 2008. Merrill Lynch was the lead Underwriter of FNMAT in May 2008.
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Judge for Mike Kelly COFC Case switched from DJT Appointee to JB Appointee
https://www.glenbradford.com/2023/07/kelly-v-u-s/
Try CFR 31 902.2 This will be the justification to write down the SPSA after the 5th Circuit rules it void as a Constitutional Remedy.
Heads up - if the SPSA is deemed void - common shareholders are entitled to 20% of the market value of the GSEs
Right on tutt1126
If the USG can take over the US Housing Credit system they can take over the Farm Credit System and impose the political philosophy of the governing party. Farmer Mac is part of the Farm Credit System:
Here is the last paragraph of the CBO GSE restructuring Paper:
In addition, changing the federal government’s relationship with Fannie Mae and Freddie Mac might prompt an assessment of the government’s relationship with other government-sponsored enterprises that support mortgage lending. Those other GSEs include the Federal Home Loan Banks, which make low-cost loans to their member institutions (such as commercial banks, credit unions, and insurance companies), and the Farm Credit System, which provides financial assistance for rural mortgages and other loans guaranteed by the Department of Agriculture.
https://www.cbo.gov/publication/56511
Do you the JB Admin would like to make the Farm Credit System promote woke farm policy?
Happy Independence Day Amelia! Has your Mom thought about running for President? She seems like she is the right age and probably as smart or more smart that the current office holder? Bet she is totally surprised about how shareholders have been treated? She is definitely smarter than me because I bought FNMAT at $ 25 on the New Issue ! Please wish you Mom the best! She is probably very proud to have such a smart daughter like you.
Happy 4th Skeptic!
Give this timeline some full transparency from some good old sunlight that many have fought for!
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Correction - the Franklin Templeton Letter say it has an "extensive history" of ownership of Common and JPS. I dont believe it says it owns the common or JPS as of 6/29/23. My apologies.
Ironic quote from a skeptic. "plain as day" and "clear as day" imply that their is the sunlight that the day brings which in this case implies full transparency for all to see. Rodney5 is right and Kthomp is wrong. As Susan Wacter noted - the NYT Times documented that Mozillo who was the CEO from Countrywide threated the GSEs with loss market share if they did not take invest in the sub prime mortgages and Susan Wactner also noted the US Regulator Pressure that she went off the record on in her FCIC Interview.
Check out the emails and docs in the FCIC Timeline and compare the Timeline to the Stock Price Chart. Good Job Patswil!
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Franklin Templeton owns both Common and JPS as of 6/29/23. -Nice work JSmith5!!
How about if he keeps on posting this FCIC doc along with the divs information. Kind of shows that the UST has no fair and moral justification for the cramdown you are promoting. I just dont know why you are diminishing yourself so - believe or not I used to think you were the Fanniegate Hero - I was definitely wrong - my second biggest mistake - the first was buying FNMAT at $ 25 in May of 2008 believing in the good faith of the UST and NEC.
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Susan Wachter from Wharton actually talked about how some USG officials pushed the GSES to buy subprime mortgages in a FCIC Interview. It is at the end of the tape and she specifically said that that this was thought to have happened. She said she would elaborate on this but said she would do it off the record at the end of the interview.
She is a quite good real estate market economist and predicted the subprime crisis based on what previously had happened with a Asian financial crisis. Her prediction was that the next real estate crisis would be due to rising interest rates.
Check out the tape from 55 min mark on. The discussion regarding sub prime starts with a discussion of the CRA program and ends with a suggestion to talk to a couple people from the GSEs and then said it is interesting to ask what regulators were pushing the GSEs to buy Alt A and Subprime Loans. She referred to a NYT article where Mozillo who was the CEO of Countrywide threatening market share with the GSEs and then the interviewers ask - who do you think the regulators were- and then she paused. The final words were by the interviewers " what if we turn off the tape" It sounded that the interview continued after the tape was turned off.
https://elischolar.library.yale.edu/ypfs-audio/304/
Great discussion in any event
Collins tentatively schedule for oral arguments for week of Sept 4:
https://www.glenbradford.com/2023/06/collins-v-fhfa/
Not on En Banc Calendar yet - assuming it will be En Banc?
Yes and forced to get Bear sold for $ 2 per share one week after the leak of the For your eyes only memo - who made money of the failure of Bear? Also forced to bail out Wachovia - who became CEO of Wachovia in July 2008 - four months after the For Your Eyes Only Memo leaked to Barrons?
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
How did that all work out for the Bear and Wachovia shareholders?
Dont think the Conservatorship was forced to protect the GSEs officers - what happened to Daniel Mudd and Dick Syron? Do you think they were treated fairly based on what is now known?
The goose was cooked 6 months before Conservatorship and the passage of HERA. See the emails released from the Financial Crisis Investigation Commission:
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Do Tim P and Tim Howard know or need to be reminded about the emails and sequencing of the set up of Shelby and the Senate Banking Committee in the FCIC GSE Timeline?
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Thanks - I wondered since the National Archives did not release these documents until 2016
https://www.archives.gov/press/press-releases/2016/nr16-45.html
This means the Perry Suit lawyers and all the early law suits did not have access to these emails which are now part of the public domain. Also - all the officers and employees who lost their job at the GSEs did not have access to these emails to defend themselves and their reputations.
Here is the FCIC GSE Timeline again:
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Now is the time. It is a contemporaneous set of emails and documents fully vetted by an independent bipartisan commission appointed by Congress to investigate the GFC. The republican Chair of the Commission was the Head of the NEC at the time of the For Your Eyes Only Memo from one of his staff members.
FCIC Commission Wikipedia:
https://en.wikipedia.org/wiki/Financial_Crisis_Inquiry_Commission
Republican Chair of FCIC:
https://fcic.law.stanford.edu/about/biographies/keith-hennessey
NEC Working on the GSE Nationalization for the GWB West Wing:
https://www.keithhennessey.com/2009/05/29/senior-staff/
Definitely a Travesty - since at least as early as March 2008. See the emails and timeline and docs released from the Financial Crisis Inquiry Commission 5 years after the hearings:
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
What is bizarre is the "no problemo" comment from the Undersecretary to Dan Mudd while he thought the UST was acting in good faith to raise capital in March 2008.
Hi DCBill
I assume you have seen these emails released from the FCIC before?
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Disagree Kthomp - the right answer is because they already did in March of 2008 and you think they will do it again
Admin action on the table in March 2008 - Dan Mudd trying to raise Money in HK. "No Problemo" email from UST UnderSecretary to Mudd and For Your Eyes Only Memo from GWB NEC to GWB Undersecretary.
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
You really are saying they did it once and they will do it again.
Hi Glenn,
I think you have a great precedent to justify your position that the "commons have no value". It is no different than the UST and NEC position in March of 2008. There was an Admin action being discussed with Senator Shelby and the Senate Banking Committee and Daniel Mudd was in HK trying to raise capital.
Check out the email trail to see how disingenuous the UnderSecretary of the UST was - I especially like the "no problemo" quote from the UnderSecretary. You can see how the whole thing was manipulated to be set up to fail by the For Your Eyes Only Memo. Lockhart and Shelby were set up and they tried to put Mudd in jail. Does this Admin have the same ethics as the GWB Admin? Does Bernstein have an ethical standard? It would seem you expect the same from the JB Admin as was from the GWB Admin where shareholders are "wiped"
Hope you are wrong - but based on precedent you are probably right - commons have no value.
https://fcic-static.law.stanford.edu/cdn_media/fcic-testimony/2007-2008_Fannie_Mae_Timeline_and_Supporting_Documents.pdf
Our only hope seems to be a new Admin or a series of judicial wins that are not overturned by SCOTUS
Hi Robert,
Thats how I read it Robert - private holding company owned by Mike Kelly - he was given incentive to invest the Tier 1 capital of his holding company subsidiary banks in GSE JPS. The Conservatorship stopped dividends and therefore the FDIC would not consider the face value of the JPS as Tier 1 Capital.
Thanks Robert - it seems like the SCOTUS Ruling in Tyler may save Kelly from being dismissed. Great case that FBOPs Tier 1 capital was taken by the nationalization. FBOP was given favorable tax treatment and capital treatment to invest up 100% of its Tier 1 capital in GSE JPS which was taken away by USG action. Seems like a well thought out brief with strong arguments to go to trial.
Judge Davis is a Trump appointee on the COFC.
Barron and Rodney
Here is a quote from the end of the arguments in the Kelly Amended Complaint
Therefore, the Government’s actions put it in privity with the GSEs vis-à-vis the
obligations under the GSE charters, bylaws, and the stock certificates issued to Plaintiff Banks.
As the Supreme Court has recognized:
[E]ven when [the FHFA] acts as conservator or receiver, its
authority stems from a special statute, not the laws that generally
govern conservators and receivers. In deciding what it must do, what
it cannot do, and the standards that govern its work, the FHFA must
interpret [HERA], and “interpreting a law enacted by Congress to
implement the legislative mandate is the very essence of ‘execution
of the laws.’”
Collins, 141 S.Ct. 1785-86 (internal citations omitted). The “FHFA clearly exercises executive
power” when acting as a conservator. Id. at 1786.
There are several references to the Charter.
https://www.glenbradford.com/2023/06/kelly-v-us/
Ralph Nader Letter to Jacob Lew
https://nader.org/wp-content/uploads/2013/05/lew-5-18-13-11.pdf
Many prudent investors, including the undersigned, purchased Fannie Mae and Freddie Mac common
stock because these stocks were considered safe investments. Shareholders who might otherwise have
been apprehensive about keeping their Fannie Mae and Freddie Mac stock, even as the financial crisis
was mushrooming, were led to believe these two prominent GSEs were financially sound. Even the
most risk-adverse, prudent investor was comfortable relying on statements from knowledgeable highranking government officials who publically claimed Fannie Mae and Freddie Mac were rock-solid
companies.
The undersigned was Ralph Nader
The Memo from Jason Thomas ( National Economic Council Special Advisor to GWB) to Robert Steel UnderSecretary of the UST on March 8, 2008:
As shareholder capital gets wiped, the government will have no choice but to seize the company and
place it in conservatorship or receivership. Importantly, mortgage-backed security holders guaranteed
by Fannie Mae will see no losses. The government will likely allow debt holders to fare okay, with either
no or token losses, perhaps 1%.
Shareholders, both common and preferred, are likely to be left with nothing.
https://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2008-03-08_Treasury_Email_from_Hason_Thomas_to_Robert_Steel_Re_Source_document_for_Barrons_article_on_FNM.pdf