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So what? Plaintiffs can depose anyone they want if the case goes to trial. I am sure they would call parties involved in the process to do precisely that. They can call the Potus, for all I care. The fact remains that comments on the internet that threaten or try government officials in the public court of opinion before their documents are even released do not encourage further testimony to be forthcoming and unrestrained; more likely to make witnesses defensive and reluctant to say anything and just take the fifth.
JMHO.
Newlead Holdings. The judge had to order forensic analysis of multiple computers to unravel rumors and pumps. I lost a LOT of $$$ on this stock and know the deal very well. Took years to figure even some of it out, and some of it remains unresolved.
JMHO.
No, I don't think Judge Sweeney cares, per se, about what Rosner or Begala say. I think she cares very much if the tweets trigger a breach of protective order claim as was launched by government over the reports that Parrott took the fifth. And I think she will care very much if the government uses the tweets as justification to file an appeal on her motion to compel ruling in a higher court.
JMHO.
Here is yet more proof that Judge Sweeney needs to see that the claims of privilege were made for a reason. Here a key protagonist is claiming a key government official will never work again in the public sector?
This kind of blogosphere punditry only undermines the prospects for shareholders ever seeing a dime back on their shares by backing the judge into a corner where clearly she erred in ruling to release and unprotect documents. Sometimes victory is attained by keeping your mouth shut and allowing the process to go forward without risky,self-serving back-channel comments.
JMHO.
I actually believe the Sammons follow-up letter is bigger than Sweeney's ruling, in some ways, but only if the appeal gets docketed. This should only take a few days to determine. Interesting that his latest salvo was not marked "pro se" like his earlier complaint to the court.
If he gets a docketed appeal, I believe the action before Sweeney would have to be stayed, pending resolution.
JMHO.
I don't disrespect that opinion because neither of us really know the outcome for certain. What I am glad of is that very soon we WILL know how valuable these 56 documents really were, or not, based on whether Fairholme goes to trial or the motion to dismiss is affirmed by Judge Sweeney. I think we will have an answer to this before the Court recesses for the December holidays.
I sensed no anger in the Sweeney ruling directed against either side. The fact that she made a positive ruling on plaintiff's motion to compel must be measured against a release of only 56 documents among the 11,000 sought by the same team. That statistically would not seem to represent a rationale for any sort of victory dance, just yet.
My guess is that unless some huge discovery is netted from this latest release, Sweeney will go ahead and rule with no further doc's released.
JMHO.
I wonder if anyone sent timhoward717's spin on her ruling to Judge Margaret Sweeney so she can see a manifestation of why assertion of privilege for the President matters. A draft speech on housing is being represented as linking the President to illegal activities, even though he is not named in any suit, and the actual delivered text of any Presidential speech is already on the public record.
th717 just handed government grounds for a mandamus appeal, if they so choose. Or a later SCOTUS appeal if plaintiffs prevail in Sweeney's court. My slightly revised opinion is that government will simply yield on 56 redacted documents and give them up under court protection. The fact that they participated in the redaction process indicates to me a reasonableness to compromise, perhaps because there is not all that much in that cache to begin with, and the further fact that the election on November 8th will neutralize some of the political consequences of the content being twisted and turned in the media for partisan advantage.
Sweeney's ruling was very well presented and, frankly, impressive as to lack of bias or favoritism.
JMHO.
Are many plaintiffs marching to a new tune?
"Remand Me" - with apologies to Barry Manilow:
With Fannie Mae I have no life
Mean old judges aren't nice
A shadow of a win
A cell with no window
Nothing's going right
Each case just goes into..
Morning and ANOTHER day
More dismissals and delay
Caught up my lies
I now see no victory
No money realized
Just one way to save me
Remand me
Please rule that there's illegal taking
Lower court's more likely to pay
Remand me
All the waiting, no money I'm making
Redemptions are starting to weigh.
Remand me
We're standing on the edge of time
Wanting all that cash that's mine
Caught up in a world of uphill climbing
The fear is in my eyes
Of nickel and diming
Remand me
Have a good day, everyone!
Michael Sammons files a formal notice of appeal in the Sweeney court rejection of his intervention complaint. Mr. Sammons also announces his intent to file a complaint with the Supreme Court.
Lots underway.
JMHO.
Most all the paper is tied up in secured borrowings from Sears primary sugar daddy, Eddie Lampert. FAIRX does own a small chunk, as well, only subordinated, and then a boatload of equity.
http://portfolios.morningstar.com/fund/holdings?t=FAIRX
When you consider equity, please remember that spin-off's Sears/Canada, Seritage, Lands End and Sears Holdings are all basically the same thing. If SHLD fails, the other entities are so inter-linked that they are likely to fall like dominoes, alongside their original Sears parent.
To compare FAIRX holdings in Sears vs. the GSEs, the FHLGC shares are Freddie Mac preferreds so combine them with the Fannie Mae shares shown in the chart from Morningstar. When you speak if being "all in"... Berko is nearly 50% invested in Sears and the GSEs. Very gutsy, for sure. Some might call that crazy.
JMHO.
Interesting perspective on Fannie Mae & Freddie Mac. So you are like several of the many Fannie Mae advocacy groups that would like any settlement money from all these suits to go to supporting minority home ownership and not to the shareholders that filed all these lawsuits?
I don't favor that outcome, but I think it might be preferable to engorging the wealth of a few Wall Street magnates. So... I'll pledge to forego any gains on my FNMAS shares if all other shareholders make a similar concession for racial fairness, equal opportunity and affordable housing entitlements for the disadvantaged. Sound good to you, too?
JMHO.
The clergy letter blames banks and mortgage lending for wealth disparity between whites and blacks, but chooses to ignore that income disparity and the concentration of minorities in inner cities where many available jobs repose is the real culprit. You cannot blame banks for this.
The goal of the letter is worthwhile. I suspect its real motive is some form of housing subsidy for low income borrowers and is unrelated to GSE reform at Fannie & Freddie. But that may be worthwhile, on its own merits.
The truth is that the parishes represented by the clergy signing the letter are not neighborhoods where affordable homes are available for sale to anyone. The lone exception may be Astoria, Queens, but even that would be a stretch. Harlem, the Bronx, etc. are not places where single family homes are available at a price any low income family could afford. Those neighborhoods are mostly dominated by tenements, apartment buildings and multiple tenant dwellings, not single family homes, and even dilapidated single family properties carry enormous price tags because they are within the city and in demand by property flippers.
The political gravitas for Schumer will inevitably become congressional resistance to replacing bail out of banks with bail out of blacks. The banks are better campaign donors.
JMHO.
No trial granted after Sweeney's Docu-release #1. So the court is still waiting to rule on the motion to dismiss. There, obviously, was nothing in that batch that advanced the litigation for either side.
Did the content released, so far, push Judge Sweeney to want to see 11,000 more documents? I suppose that is possible. But I doubt it. My sincere guess is that after 3 years of discovery, the judge just wants to get to some point of decision. In some ways, I could see the judge actually empathizing with certain aspects to Sammons intervention letter (though surely not the nasty observations lobbed her way). I believe that the motion to compel reflects judicial exasperation over impasse after impasse. Could be more against the government side on this, but maybe not, too.
I still expect some government reaction regarding the ordered document release. They will have to respond to the show cause demand regarding paying plaintiff's attorneys for the compel motion cost reimbursement.
JMHO.
Berkowitz is in a PR-frenzy out of FEAR! FAIRX has taken deep hits on redemptions, Sears is rumored by Fitch to be on the brink of bankruptcy and cash outflow hints at a scary liquidity crisis at Fairholme if the market takes any kind of dip.
http://news.morningstar.com/articlenet/article.aspx?id=772817
I can see why Berkowitz might need a speed-up in court action to stem the hemorrhaging. District Court, maybe?
JMHO.
Try calling him, if you really think it matters, but after Sweeney's order I don't see it having any further impact on anything.
210-858-6199
The # was in the court filing posted by BAGR yesterday, so it is part of the public record and not a violation of privacy under TOS.
By the way, the District Court that heard the request for consolidation filed by FHFA is the only court making a decision favorable to plaintiffs since day one. They also ruled on a very immediate basis. I can't see why the government would want Sammons request to go through, only reasons why an investor would want the process speeded up in a different venue.
JMHO.
All anybody outside the inner legal circle has to go on are clues in the original motion to compel, as initially filed, including the four appendices... and the one batch of doc's that Sweeney already released. Pretty much everything else, including the criteria used to determine what doc's were being sought under discovery, remains under seal. There is substantial legal precedent for huge amounts of content remaining under seal and not being released for public view for sustained periods of time. One such case that comes to mind was the Kodak bankruptcy where scads of discovery materials were produced for intellectual property valuation analysis of the estate, but all specifics regarding technology and patents were redacted and remain under seal, in many cases until the patents expire. So the answer is that we may NEVER really know what is in whatever gets released to the court, and the part of Sweeney's order that deals with that subject could, itself, be redacted.
I think that Docugate is blown way out of proportion to its likely impact on either the Perry Appeal or the Fairholme case before Sweeney. I do think it could provide evidence support for some of the peripheral cases pending because many of them are focused in part on 2008 as much as on the sweep in 2012, but I'll skip that digression for now. Let's just consider one key aspect to the two, main cases.
The first document release ordered by Sweeney lit up the blogosphere and Twitterverse for months which bombshell conclusions of all manner of illegal skullduggery. Every literary or financial pundit living jumped on that one, big time. Why, we even had a few more mainstream types like George Will piling on the excoriation of the government. It was like watching sharks in a textual feeding frenzy. Just one problem, though. Nothing in the first release moved the needle any closer to any verdict supporting any plaintiff action. In fact, after that release, several dismissals were ruled. So, yes, can the government be made to look bad in the remaining cache of paper? You betcha. But will it really move the needle in any aspect of Fanniegate? I seriously doubt it.
I, for one, would like all the documents released for controlled use in the pending legal matters. You can honor the protection concerns of government attorneys by redacting the contents while permitting any discovered evidence to be fully considered by the court. This may, in fact, be in Judge Sweeney's recent ruling. I can't say, not having seen it.
The fact remains that most of the claims against government are straightforward issues of empowerment under the law (HERA), alleged contract violations and a takings claim for property taken without just compensation. I don't see the other claims as ever gaining much traction after the slew of dismissals already issued by the lower courts. There is nothing lurking in the closet of secrecy that is likely to impact the outcome in any of the claims put forth in Perry or Fairholme. Motive is not important.
I still expect some sort of government recoil from the motion to compel, but nobody can say for certain.
JMHO.
My later guess is that Cede came from a very small footnoted item in Sammons letter. I am increasingly of the opinion that he is just a disgruntled, frustrated investor. I also think he implies he owns $1 M, not one million shares, for whatever relevance that implies.
As Sweeney notes, neither plaintiffs or defense ever raised objections to her court's jurisdiction, so I find the "government mole" opinions hard to fathom. And the government would not intercede with a "pro se" claim in any circumstance.
JMHO.
Good find. The address matches that listed on the letter to Sweeney's court. That address is a private home, apparently shared with his wife who is an anesthesiologist in San Antonio.
Sammons does not appear to be an attorney, but rather is representing himself, at least based on my interpretation of "pro se" which he indicates in his letter to the court. Sammons does make one odd inference to Cede in a footnote in his text.
It is all very strange. I am wondering if maybe he is a fund holder in FAIRX or Perry and expressing his interests in shares of FNMA owned by them in his fund investment? This is not an action of the government as I contemplate the remaining options.
Maybe just another frustrated investor like many of us.
JMHO.
I'm generally not much of a conspiracy theorist. But this one really piques my interest. I have a serious reservation regarding the mysterious injection of "Cede & Co." into the Sammons letter's appearance in Judge Sweeney's court. First of all, how did Sweeney gain insight into where Sammons shares were nominally held since it is not so stated in his letter of complaint? Where did Judge Sweeney come up with this statement?
Did this Sammons incident somehow trigger an immediate decision regarding the motion to compel? The timing is nothing but stunningly suspicious.
Many questions, no answers. I will say that the DTCC thing is troubling since a clearing house is often involved in short sales from my limited knowledge on this somewhat murky part of the market.
JMHO.
More intrigue from the Sweeney Court to consider. Nowhere in Michael Sammons letter to the court does he reference Cede & Co. It is only referenced in Judge Sweeney's reply to his 5 page letter. How did the "Cede" reference get introduced to the judge's order?
Something seems very fishy about this whole development?
Someone clearly wants Judge Margaret Sweeney removed from the Fairholme case. But who, and why? Could this be related to the Perry urgency and its settlement with its investors? I have no clue. But the text of Sammons letter certainly expresses a lack or urgency in the Sweeney court.
Thoughts, anyone?
JMHO.
If you are into conspiracy stuff, here's an "item" for your weekend adventures into Fanniegate. There's a lot of mystery around the Michael Sammons/Sweeney exchanges that struck me. First of all, I do not see where Sammons is seeking intervention because of a district court preference. It reads more, to me, like a request for a different judicial arbiter. To me, that could be the SCOTUS. Can't say for sure.
But the most interesting question can be found on page 6 of Sweeney's order #338 and her statement that "Cede & Co." is the "nominal holder of record" for Sammons shares. Therein lies a very interesting and possibly intriguing confluence of connect-the-dots possibilities. Could be nothing more than a broker-to-broker transfer of FNMA preferred shares (as in an inheritance) to Mr. Sammons. But it could have other, more sinister significance in who might be behind an attempt to unseat Judge Sweeney from the Fairholme suit. There is a hierarchy of ownership that approximates as follows: Cede is owned by the Depository Trust Clearing Company. The DTCC is owned by The Federal Reserve. The Federal Reserve is owned by 12 huge Global Banks. Is Sammons a front for some higher agenda than a $1 million investment stake?
I can't say so, but there is a LOT of suspicion surrounding Cede/DTCC that reads like an Agatha Christie mystery. Here's just one eye opener. It is lengthy, but worth the time.
Kudos. That is exactly what I believed. Hereabouts, such action is referred to as BLACKMAIL.
JMHO.
You clearly fail to recognize the difference between "inability to properly retort my comments" and "unwillingness to waste time debating lame arguments in some sophomoric high school debate club contest" for who gets in the last word.
The single most important document in all this surely IS HERA. And despite insulting remarks about my not having read it, I have more hours invested in studying its content than probably is justified by the discussion of FnF as manifested on this board.
I am not underwhelmed by any violations of the law. All those are serious, relevant and important. I admit, however, to being totally underwhelmed by ridiculous, pedantic sophistry claiming violations of HERA that are bogus, half-baked and legally meritless examples of posturing and bragadocio by some pretend Perry Mason or Judge Wapner wannabe.
JMHO.
Stop. Please. I can't take any more Fannie Mae belly laughs. Your rants on HERA and Fannie Mae remind me of a great song from recording artist Joe Jackson of "Steppin' Out" fame with his classic song "Everything Gives You Cancer" except your updated version would be that everything FHFA does violates HERA. At least according to you.
LOL.
Stupefician?
"Very stupefician, writing on the wall.
Many years of bad luck, Fannie starts to fall.
Thirteen hedge fund babies, redemptions start to call.
If you believe in things that you don't understand,
Stupefician's in the mall."
Nice weekend to all! And thanks to Stevie Wonder for so great a memory and song.
Fannie Mae has been party to numerous lawsuits in virtually every year in its history. Look at how many were discussed just on this message board, today.
If defending Fannie Mae from litigation is not a duty of conservatorship then what is? Yeah, sure, any suit that filed against Fannie Mae gets uncontested and awarded to plaintiffs because FHFA using to DOJ to defend them violates HERA? That would be pure, unadulterated dereliction of duty to fail to defend the GSE from claims. Now THAT would violate HERA!!!!! Right?
"Hey, Mel. Better research legal help quickly because defending your enterprise apparently violates HERA unless you hire some outside legal source that is not a government agency. Nevermind that this is just extra expense for no ourpose. Just DO IT because HERA prevails at any cost and without any benefit of either logic or sanity."
ROTFLMAO!
So... FHFA's mission to "conserve and preserve" gets a free pass on failing that test because it was handed an impossible mission to execute by HERA by preventing any help or advice from other governmental sources? NO DAMAGES COMING IN THAT SCENARIO. You just voided most of the pending claims in the Perry Appeal. FHFA was doomed to fail by draconian restrictions in HERA. Very helpful, though. Thanks a bunch for that gem! That's one even I would not have dreamed up. Appreciate the excellent tip.
Interesting but juvenile legal strategy to claim that any action from FHFA that involved any other governmental entity breaks the law under HERA. Then FHFA accepting legal help from DOJ violates HERA, too? Hey, Mel, YOU handle your own legal defense with no help from government attorneys. Nice!
What a total hoot. I have laughed more today than anytime recently. This is precious, unbelievable, ridiculous interpretation of the law and how government works. This rationale is like the same genius stratagems that awarded plaintiffs millions because spilling hot McDonald's coffee in their lap ruined their sex life and "mean old Ronald" FAILED to warn them that the coffee was hot. Hey, that one worked, so maybe this one will, too.
ROTFLMAO.
JMHO.
So, in your analysis, FHFA is bound under HERA to act without any consultation from any other governmental agency, any input from the President, Treasury Secretary, Federal Reserve Chairman, blah, blah, blah and must make all its decisions in a vacuum and, thus, take total responsibility for the largest part of the American economy as some super agency? No utilization of Commerce Department resources, the Congressional Budget Office, the Fed macro data that government uses with which to make economic projections, no guidance on interest rate projections that would be crucial to huge GSE issues like derivative hedging arrangements? Do you actually believe that?
I am rarely speechless, but maybe the better word would be "stupefied" by your comment.
JMHO.
Your conclusions are unsupported by any facts. It is more likely that the government neither wanted any piggy bank in the first place nor saw Amendment 3 as any ongoing source of revenue and budgetary relief.
Political gravitas inside the beltway is that much of governmental leadership wanted either reduced or no government involvement or further taxpayer risk in the mortgage finance business. Even Berkowitz's Fairholme Proposal to takeover the GSE's insurance business devotes a major section to the political reality of the impetus to "wind down" Fannie Mae and Freddie Mac and replace them with private enterprise chartered enterprises.
JMHO. And, no, my opinions are not fact based, either, so save your usual prosaic objection.
Total garbage. That only means FHFA gets the ultimate decision making authority to do what it thinks best. If they agree with suggestions, they are free to implement them. You can't twist this into some convoluted idea that if Treasury or someone else suggests something, FHFA is barred from implementing what it thinks is best.
No court in a million years would support your claim. Thanks for a good laugh,though.
JMHO.
We came close to a settlement awhile back, but too much was revealed in the Twiiterverse and blogosphere and it all fell apart, or so I believe, anyway.
Now we have Documentgate adamancy building a wall of resentment that will likely only result in a scorched earth impasse that will preclude any handshake resolution.
The only settlement opportunity, now, is when the $$$ runs out and a receivership is set in motion. Too many plaintiffs with too many complaints and too many demands to satisfy without busting the UST.
JMHO.
HERA imposes no mandate for FHFA to only act by itself with no advice or suggested leadership from other agencies. The Potus routinely influences issues in many private concerns, including the BP oil spill as just one recent example. That is what a President does. There is no illegality in that.
Unless you dispute the existence of the Black Rock report containing concerns about the health of the GSEs, you don't need to see the documents. There was PLENTY of other expert opinion circulating, including Professor Anthony Sanders analysis, Secretary Geithner's presentation to Brookings Institute, Josh Rosner/Gretchen Morgenson's treatise "Reckless Endangerment", etc., etc.
The numbers from FNMA's Q2/2012 10-Qwhich THEY prepared were scary, in and of their own right.
No documents are necessary to confirm any of this. Sorry. History is not on your side.
JMHO.
There are ZERO documents needed to rule on a violation of HERA. The law either empowers the actions taken by FHFA and Treasury, or it does not. Motive is irrelevant.
As for questionable accounting, unless there was no report suggesting a death spiral decline possible for the GSEs, it is pointless to argue that any one report or deposition from McFarland have 100% certainty assuring success of the GSEs future economics and ability to repay bailout funds outstanding. That clearly is not the case. The Treasury Secretary actually wrote a book about it. Coming from Hank Paulson, that content is not hearsay. So no documents are needed for any such suit.
JMHO.
History says you are wrong. Government impropriety and secrecy are a sad legacy of much hidden stuff that went on through history. Oppression of minorities and women, McCarthyism, secret CIA wars, Johnson funding the VietNam war by taking funds including from Fannie Mae, the IRS being used for political persecution under Hoover, impeachment proceedings against Clinton for purely political purposes, Watergate, Iran/Contra. Then there are banking and Wall Street fiascos including shareholder suits against both GSEs long before 2008, Bernie Kornfeld, Michael Millken, Bernard Ebbers, Enron... ad nauseum... and notorious bank fiascos like Barings and so, so many others.
So let's just be factual. There are SYSTEMIC issues such as those being cited in Fanniegate that have been around forever. The sweep is no more unusual or startling a claim as Teapot Dome, JFK's ties to the mafia or the CIA funded Bay of Pigs invasion of Cuba.
There is no historical precedent for gazillions of documents being demanded in a civil jury case that drags copious amounts of the government's archives through a media campaign being waged by a seemingly orchestrated legal campaign whose primary goal is not to secure evidence for a claim pending, but rather an attempt to embarrass and shame the government with threats to release sensitive and condemning behaviors that have no relevance to any case. They are a de facto form of blackmail to acquire huge amounts of money and concessions to enhance share value. How many documents were released in any of the foregoing scandals I referenced as precedent? Not many. Lots were requested, especially under FOIA, but only a very few like the Daniel Ellsburg saga ever gained any real content traction. Do you think releasing all those dirty details would enhance the U.S. reputation and status as a world leader? I don't. There is a reason for privilege. I respect it. So should everybody using discovery in an ambulance-chasing witch hunt for enhanced wealth at the expense of the government. Selective discovery is legal, proper and not under dispute from government attorneys, as I sense it. But someone has to draw a line on excess driven by ulterior motives.
JMHO.
I actually agree with your post 100%. It would be disingenuous for me to claim some moral superiority when I bought depressed shares in Fannie preferred at heavily devalued costs and, likewise to others, expect a nice eventual payoff, over time. When the tech bubble burst I bought tons of Amazon.com shares at $10.15 and held until they breached $250, so sure those big wins like AAL are worth a celebration. Nothing wrong with buy-low/sell-high.
What I have a huge issue with is the mob mentality that has gripped speculative investors and emboldened ludicrous conspiracy theories, charges of criminal behavior against public officials that, for the most part, were just trying to do their jobs and a veritable circus of litigation. Much of that litigation was 95% fluff and 5% fact, largely seeking some huge damage award because their bet on an investment didn't work out for them. They made the choice to buy or hold the stock. They own that decision. But they choose to sue the government for $ billions.
When I make a bad investment, and I have made plenty of them, I write it off as a bad choice and move on to the next investment. If my FNMAS shares become worthless, I will only blame myself. Foaming at the mouth and ranting about or threatening Federal officials, bad banks, lousy regulators, sloppy accounting, ineffective audits, ad nauseum only blame shifts the bad decisions off the backs of investors. The TRUTH is that all that bad stuff has been around forever, and small investors have always run the risk of victimization and losses or unattained profits at the hands of government, banks and so forth.
Read the Berkowitz article Navy just posted. He says he just wants the dividends restored. Read Ackman's analysis that commons should be worth around $20. These are reasonable expectations. These do not require $ billions upon $ billions in judgements to attain. When Berko says he wants to be treated like AIG, compare that case to the GSEs. The only consequential litigation in AIG was the Starr suit, not two dozen GSE suits, many of them seeking class action status. After Benmosche paid back their bailout and a healthy surplus, the government rescinded their warrants. That might have happened here, too, without the uncertainties from all that litigation. Then AIG did a 1/10 reverse split to regain NYSE listing eligibility. Shares trade, today, at healthier share prices and even a small, restored dividend. That's what Berko says he wants here, too. But that is NOT some enormous gainer like the eponymous $179.00 Fannie Mae S/P expectation that keeps getting stickied, hereabouts.
That's my epistle for today. Thanks for the conversation. This kind of discussion on Fannie Mae is actually helpful, especially to new players in the game.
JMHO.
Hate to disillusion you, but I am way underwater on my FNMAS preferred shares, so I'm not doing any victory dance at common's expense. I haven't sold any, either, but I'm not buying anymore without some real developments or news from the courtside.
I have more time and DD invested in Fannie Mae than any other stock I ever owned or traded. I am frustrated no end at the delays, lack of progress and legal blockades that are keeping a normal resolution from being achieved. A LOT of the blame for lack of any payoff is the INSANE actions arising from the plaintiff cabal. Look at the # of motions filed regarding documents/discovery. The vast majority of them do not come from government, other than those objecting to more and more plaintiff groups stepping up to demand more and more documents. The lawsuit cavalcade has deluged the Sweeney court with document-related requests, each one of which bogs down the entire process. Then many of those same cases get dismissed, anyway. STUPID!
The government shares much of the blame for the Fanniegate saga. But so do the ghouls that insist this must head towards some mega-bonanza gain for them on shares bought at dirtbag prices."Oh, I was robbed. Woe is me, somebody stole my Fannie. I was victimized by a TAKING that only inflated my 25 cent shares to around $1.50 (6X return)." So much of the impasse is the result of self-inflicted stupidity and greed instead of any realistic investment objective.
Fannie and Freddie are now being held hostage by the penny flipper mentality that thinks every distressed stock will soon become the next American Airlines. Those are the hopes of broken dreamers that get buried, penniless, in Potter's Field.
JMHO.
A final point on document release. Every new document offered as evidence is another document to be discredited by defense. Add layer upon layer of documents, add more time to the judicial process. Most of these documents appear to have merit in a constitutional suit against HERA (which has never been filed) but are a far reach for pending claims for contract law violations, taking claims, fiduciary breach, self-dealing and a myriad of procedural breaches that need no new evidence introduced.
JMHO.
I have no doubt you are 100% correct on suits dragging on for many, many years. The appeals process, alone, can drag on for endless periods before any final judgement is rendered.
The documents are a double-edged sword. In all that paper there are sure to be some lethal admissions about how government behaved behind the scenes. Where there is government, there are indiscretions in almost any area. That is, sadly, the nature of bureaucracy. But "bad press" or "embarassment" to the Feds is not the same thing as legally condemning when measured against any of the claims pending against the government in courts across America at present.
It is possible that discovery could uncover some new claim that could lead to a new suit being filed, but I doubt it. The legal teams already at work on Fanniegate are well credentialed and very experienced in such matters. Then, too, you have issues of new, duplicative filings being rejected by the courts and additional statute of limitations constraints. So I sense your last point represents unlikely outcomes.
JMHO.
Replace the GSEs with chartered, state-regulated insurance companies. This has nothing to do with big banks. Fannie and Freddie preferred shareholders get 2/3rds of the equity in the new companies, and a rights offer to purchase another 1/3. All up, that provides $52 billion with which to assume ALL future MBS guarantees with sufficient capital to guarantee $1 trillion in new, privately insured paper. No dividends will be paid new company equity holders (old preferred shareholders) for five years, providing a window to recapitalize and sustain the new enterprises. Affordable housing initiatives remain in other parts of the government portfolio via FHA, Ginnie Mae, etc.
All old loan income and old MBS responsibilites remain in place in Fannie and Freddie's enterprises as their platforms get wound down and eventually cease operation. Government would own 79.9% of income generated by the aging GSEs and common shareholders would retain 20.1% equity position. There would be no need for further recapitalization because all new MBS guarantees would be at the risk of private investors in the new companies.
This IS the Fairholme Proposal. It has NOTHING to do with any $50 per share offer of any kind. My source for this presentation, which I have periodically posted on this board for around two years, was the Wall Street Journal. Claims otherwise are just garbage.
http://online.wsj.com/public/resources/documents/FairholmeOffer.pdf
This proposal was never advanced or squashed by government, to the best of my knowledge. Barring some Congressional intervention, this proposal or any variation there-of would most likely only be practical in a receivership environment in early 2018. This eliminates the common equity holder objections to doing such a deal because a court-ordered reorganization inevitably cancels common shares.
JMHO.