Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
I think there are a lot of traders that took or had and then enlarged positions during the 98 cent dip that were hoping for a fast decision in court. Now stuff has bogged down, and with the decline in S/P's from the legal setbacks, those same traders are preserving a tidy margin by selling FnF's and scooping up bargains from the broad market declines elsewhere.
I very much doubt there is any leak on the Perry Appeal decision.
If I was sitting on cash, I'd be buying more FNMAS when it bottoms. Since I took major positions in Apple, Valeant and Twitter in early July, I'm just standing pat.
Very tough day for investors, today.
JMHO.
Flight from safety of preferred share's liquidation preference can only indicate growing concern that the Perry appeal is about to be dismissed.
JMHO.
Anyone else read the Charles Cooper letter filed before the Appeals Court? Looks to me like he is claiming Judge Caldwell's dismissal is preposterous because it endorses the government using the GSEs "as ATM machines."
That is not at all how I read Caldwell's ruling. I believe she said plaintiff had no standing to make such a claim. Anyone view this in a different light? Misrepresenting a lower court ruling could be taken as a serious matter.
Cooper's letter is up on GSELINKS along with Judge Caldwell's ruling in the Kentucky Robinson matter.
JMHO.
Still awaiting a link on rule 58(c) "which states that judgement must be entered once 150 days have run from the entry in the civil docket."
Thanks.
You will make a nearly $4,000 gain on your FNMAS by Friday's close, if my model is still working.
Good luck. I'm there with ya, Bro.
That is a Freddie Mac chart. This is the Fannie Mae message board.
No, not slaughtered, but rebalanced against FnF. The street read is that this is going to receivership. That won't be until early 2018. Liquidation process will take 1 to 1.5 years more before any liquidation preference payout. That's a long time to hold shares before the first payday. Whales own the pfd shares, Ackman and retail investors own common shares. The latter are always the ones left at the altar. As for Ackman... bet he bails before commons go to 50 cents unless Perry Appeal surprises. The other pending cases are now too bogged down to matter before the $$$ runs out.
JMHO.
There are only 48 rules in the Federal Rules of Appellate Procedure that I can find.
https://www.law.cornell.edu/rules/frap
When convenient, please post a link on where the 150 day requirement is codified.
Thanks.
That was probably Glen Bradford selling one Fannie share to pay for a bottle of water.
Rep. Jeb Hensarling introduces a new bill to bring housing reform back to the forefront of the Congressional agenda.
Jeb is better known by many of us as "Mr.Shut-em-Down" who, for the better part of the last decade, has tried to push Fannie and Freddie over the cliff.
Most of the content in this bill relies on repeal of Dodd-Frank tied to a "let them eat cake" bankruptcy provision if ever needing another bailout... just go bankrupt, no more TBTF bailouts. Not much GSE change here, subject to Corker steering a few "additions". LOL.
I think you are confusing the length of time an appellant has to file an appeal. That rule is 150 days from the time the original ruling was docketed. In this case, the Perry attorneys had 150 days after Judge Lamberth's decision was docketed by which their appeal had to be filed with the court to be eligible to be heard.
I know of no rule of procedure requiring a verdict to be reached within 150 days of an appeal being docketed. Please help us out with a link that shows otherwise.
Thanks.
The 150 day limit has to do with how much time the court has to issue paperwork AFTER a decision has been reached and an order docketed. It has nothing to do with how long the court has to issue a ruling.
JMHO.
This article supports my longstanding contention that the Fairholme takings claim matters... perhaps more than any other.It also raises a point I have made repeatedly, mostly on the FNMAS board, that any preferred position must be carefully considered in light of skimpy trading volume and liquidity problems with many thinly traded FnF pfd stock choices. This is why I selected FNMAS over other choices.
Shares will start trading again tomorrow. Anyone want to venture guess at Monday's closing FNMA price. The Caldwell news was just released prior to the Friday close.
My bet: the market will get somewhat of a dead cat bounce and FNMA will be flat on low volume, comparable to Friday's 50% of normal activity.
Anyone else care to venture a guess?
The limited view of the famous (or perhaps infamous) meetings as recounted in "On the Brink" will likely never gain much further clarity, nor does it much matter under prevailing statute of limitations restrictions. The truth is that assent of the boards was given and conservatorship was enacted. Nothing else really much matters at this point.
Much ado has been made about the "heads hitting the floor" comment attributed to Hank Paulson as some indication of coercion. This is another one of those diversionary rabbit holes like I spoke of earlier in the day. The comment could just as easily have been made to express the surprise of a dismissal and replacement via conservatorship to executive teams that were used to getting their own way and netting huge bonus paydays for what others described as "Wild West" behavior, uncontrolled risk taking and an environment of zero restraint in a seemingly consequence free corporate environment.
Not one board member filed legal action to protest the takeover. Not ONE! Nothing else on this topic seems to matter now.
JMHO.
Both Fannie & Freddie boards "consented" to conservatorship. Not one member has come forward since that date to say otherwise. Perhaps they were concerned about losing immunity protection over accounting misrepresentation suspicions that live on, yet today. Why even the Pagliara suits against Price/Waterhouse/Coopers and Deloitte/Touche seem to confirm that suspicion.
If you have evidence that any board member did not consent, ever made statements to this effect to any member of the press, regulator or oversight investigator (such as FCIC personnel) or any evidence that anyone from either board sought legal relief to prevent conservatorship... please bring it forth for all to see.
Pretty amazing that all those directors just quietly went away under a cloud of suspicion and never assumed responsibility as directors to object to the conservatorship. Looks to me like they just skulked off and did nothing to stop the takeover. That would indicate that any shareholder action would have to be taken against the two BOD's in some class action... not suits against the government.
JMHO.
Yes, yes, yes. I agree with you. Somebody besides me "gets it". Fanniegate is a TAKINGS claim under the Fifth Amendment of the U.S. Constitution. All the other mindless/endless conspiracy theories involving TBTF banks, secret government deals with GS, political cabals to divert money to Obamacare or other government agenda items... it's all a bunch of malarkey (as Joe Biden might say).
Bruce Berkowitz had the right idea in mind with his original 28 page complaint. Then the simplicity of his initial filing was diverted for non-aligned forays into largely political rabbit holes. A simple, cut-and-dried takings suit was hijacked into the netherworld of intrigue and discovery in a sordid witch hunt for salacious details that even became sought by the NY Times. Fanniegate has entered The Twilight Zone of gridlock from frozen, mutually exclusive agendas... each with their own legion of supporters, experts, academics and pundits... that now resolving anything but the most basic issues (like a takings claim and nothing else) turns into a quagmire of cross-claims, partisan obstructionism and economic self interest. Look at the opposed players that must coalesce for a mutually agreed settlement:
1. The Grover Norquist balanced budget politicos want no more bailouts.
2. The government wants more money than Congress will give them.
3. Social engineers want more housing for minorities, low income types.
4. Reformers want an end to taxpayer guarantees and future risk.
5. Banks want an end to Dodd-Frank and a 15 year mortgage.
6. Real estate players want a 30 year mortgage and eased underwriting.
7. Republicans want a story to fry Dems with some GSE scandal.
8. Democrats want a story to fry Reps for ending home ownership for all.
All this being said, it becomes clear that the more complex the legal issues are made in case after case, the more toes get stepped on and the more polarity and intractable opposition to competing outcomes gets introduced to the conflicts within and surrounding Fanniegate. The only way a solution will be attained is to get back to where Fairholme's suit initially commenced. Cut the crap. Stop the insanity. Get to an end point.
I find considerable irony in Bradford's financial dilemma where he is running out of time to finish in the game at some eventual point. Yet it is the Bradfords in the pundit world that created a lot of the delays and rabbit holes that all these litigations are now bogged down in, investigating pointless conspiracy theories that make for good story lines but prevent ever getting a decision for shareholders.
Anybody really think that George Will wrote his anti-sweep article out of concern for investors? Spare me. I will give him some benefit of doubt on concern for rule of law. But, in the end, this was an anti-government, anti-big money diatribe to serve a political agenda. All this continuum of rhetoric accomplishes is to further separate the parties contesting each other in courtrooms across America.
JMHO.
This is getting vary lame. The board already approved the appointment of the conservator. Remember... when their heads hit the floor? Once done, it is all over, The section of HERA I cited specifies the mechanism by which the conservatorship becomes a receivership. I'm not trying to demean your views, but I can't stop you from doing it yourself.
HERA empowers a receivership. In fact, it contains specific events of under-capitalization where HERA demands that the administrator declare a receivership. Claiming otherwise is futile. This is the law. Exactly as judge Caldwell properly confirmed.
I have posted the links for both HERA and the Caldwell decision for ALL to see. People can make up their own minds from there. I already have made up mine based on the facts contained therein.
Game over.
I've been here since 2012 and have nearly 2000 messages posted on FNMA, FMCC and FNMAS boards, and close to 5000 total posts since mid-2012. I was a charter YMB poster from kts inception until I added I-Hub (with some occasional regrets for treatment). I moderated the last two boards for an extended period of time. Prior to that, I moderated the boards for Sears Holdings and Walgreens. I also own a large position in FNMA preferred stock.
I am no newbie to investing, I-Hub, distressed plays or stocks beset by legal issues such as Fannie Mae or Freddie Mac. I am an advocate of extreme due diligence in anything I invest in or consider owning. Of course I read HERA. I also read the prior legislation that led up to it. I have read 000's of pages of text on every aspect to Fannie Mae and mortgage financing and all the docketed legal affairs that are available for public consumption that relate to them.
Hope that answers your question.
Read the text in HERA.It says YOU are mistaken.
https://www.govtrack.us/congress/bills/110/hr3221/text
Scroll down about 1/3rd of the way down to: "Authority over critically undercapitalzed regulated entities."
HERA not only authorized but required FHFA to move the GSEs into receivership if their capital was depleted.
These are FACTs. Not conjecture.
JMHO.
HERA provides for exactly such a provision from conservator to receiver. It is clearly covered in 122 STAT 2734 to 122 STAT 2738.
It is found within the Section of HERA entitled: "Authority over critically undercapitalized regulated entities"
Jacobs, Hindes motion hints at further delays ahead.
http://gselinks.com/Court_Filings/Jacobs_Hindes/15-00708-0049.pdf
MoeRon Steal seeking a quick fix with a simple 8-K announcement regarding amended complaint under prior class action. Government resisting, wanting the full process repeated because the complaint is substantively different from the first go 'round.
Up to Judge Sleet, but any such waiver likely would be grounds for appeal.
Add 6 months before any arguments are heard.
JMHO.
Please just see Section #3, pages 14 to 15. It is explicitly clear.
http://gselinks.com/Court_Filings/Robinson/15-00109-0063.pdf
Sorry, but you are mistaken. If you have some remaining problem with this, please take it up with Judge Karen Caldwell. I read HERA, ages ago. I recall this reference being incorporated therein. I believe it was also referenced in the earlier Lamberth ruling.
JMHO.
If you read Judge Caldwell's decision, there is an entire section devoted the portions within HERA that specifically address the conservator becoming a receiver as a required action within the statute. Such a move is well within HERA according to this Federal judge.
http://gselinks.com/Court_Filings/Robinson/15-00109-0063.pdf
This is a very well written opinion.
HERA specifically provides for a liquidation, as does the GSE Act of 2002. You are somehow mistaken on some alternate view.
JMHO.
I think you are close. But I think the government will renounce its warrants for 79.9% commonequity equity so common stockholders then own 100% of the liquidation remainder once secured debt holders and senior and junior preferred shareholders are compensated. This is the fast track to zero $$$ for commons. This voids the argument on ripeness for commons. This is why many of us only own preferred shares. It's like an insurance policy against the seeming majority of Congressional leadership that seems hell bent and determined to push both GSEs over the cliff.
This, of course, is under the assumption that the Appeals panel doesn't dismiss which seems more likely to me after the Judge Caldwell decision.
I have no doubt that litigation will go forward for years on this. But the preferreds see a payday immediately upon completion of the liquidation process so they get paid from the estate, while any other claimants must go through another whole round of filings, discovery, motions, blah, blah, blah. There will be no need to escrow any liquidation proceeds given preferred shareholders (which include the government to a major extent) since the government always has enough money to settle any eventual claims if any court rules to mete anything out in the future.
JMHO.
Judge Karen Caldwell adds a stunning twist to the Perry decision that rocks the anti-Amendment 3 world... she affirms Lamberth's conclusion that HERA empowered the sweep due to extraordinary circumstances, AND, that the motives for doing so were immaterial. This, in effect, neutralizes the volumes of effort going into trying to discover some secret government malevolence to prevent shareholders from recovering their legal equity value. Caldwell says none of this matters.
Just one more bombshell.
And just one more reason why discovery is a waste of time while more fertile claims are going unheard in courtrooms across America. The suits are being picked off, one by one, and either inertia or indifference have apparently frozen the legal efforts into a no win passivity. Unwilling to change = unwilling to win.
JMHO.
Jacobs, Hindes: Federal Rules of Civil Procedure #23 -- relative to class action complaints. Depending on Judge Sleet's ruling, this procedural objection could force a full certification of the class action... with all the trappings of published notices to shareholders (in 8-K's), published notice, solicitation of class plaintiffs and the right to decline. This process will likely add 3 to 4 months before an approval can even be sought to certify a class action.
This is a bigtime setback for plaintiffs if Judge Sleet rules that the Rule 23 requirements should not be waived. I see no reason why he would waive a process that is clearly SOP in virtually every class action suit. Again, I see no purpose to the amended complaint only to insert enrichment claims. There are other, more impactful directions this could have taken that could justify another lengthy procedural delay. Just not this lame gambit.
Delaware is NOT on any fast track. It looks to me more like it is off the rails.
JMHO.
Hey, I know. It is an exact parallel to Fannie Mae. Take all the losses that accumulate and claim them as tax deferred assets, then use that as "income" to justify why no action against you is necessary... just like the argument that has been used against the government for enacting Amendment 3. You pay off your obligations with DTAs and assert that you are financially healthy.
Seriously... good luck to you. I don't enjoy seeing anybody losing $$$.
Yes, I understand that. The law is quite clear that in event of insolvency the conservatorship is dissolved and a liquidation is required.
Sure. Please see claims C.1 through C.3. These are the discovery areas that Fairholme stated as necessary before Judge Sweeney. These are NOT the areas that have bogged down everything, since.
I fail to see why any discovery is necessary to refute government's claim that Sweeney's court has no jurisdiction in the matter. I see no discovery necessary to determine how plaintiffs determined their claim. And I see no discovery necessary to address ripeness of the claim.
There is nothing else requested in this discovery motion. It just started out "dumb"... got "dumber"... and because of pig-headed intransigence to get out of lame discovery that has nothing to do with the Fairholme complaint and try and move this along to a trial phase.
If Fairholme is uncertain of its ability to defend its claim based on the lack of discovery for these 3 simple areas, the suit should have been abandoned 3 years ago. And, no,I am not suggesting that is the case.
What idiot is driving this bus? Time to move this thing off dead center.
JMHO.
That path to victory... a very unlikely event in my assessment... would not serve to invalidate HERA.
As to "completely undoing the NWS"... that is just one remedy, actually the most extreme one, and as such could be considered the least likely. If the court decides that FHFA over-stepped its authority as granted by HERA, it also could simply restore the original 10% SPD which likely would solve the violation and be fully legal under HERA.
JMHO.
That is true for common shareholders. But if you read the Fairholme complaint, it comes from the different angle that the taking included dividends equivalent to those given government, and the restoration of liquidation preference. The dividend yield of these preferred stock serious is generous in this low interest market, and the liquidation preference is important because it is fixed at par and, consequently, does not float with share prices which were very low at the time the sweep was enacted.
The liquidation preference is important if the government winds down the GSEs or declares an insolvency.
JMHO.
Any agreement between attorney groups in separate cases working as a team to attack the government in a coordinated conspiracy would potentially open Pandora's box of mass disbarment. I would never go there as an accusation.
I'll just make my answer as simple as I can. Here is Fairholme's filed complaint:
http://gselinks.com/Court_Filings/Fairholme/13-465-0001.pdf
Please just go down to page 26. This is a simple, ONE COUNT complaint. Read the half page of details and then you tell me if these questions needed any other discovery?
The complaint is that the shareholders rights were taken by government without fair compensation. Were they? No judge needs any smoking gun e-mail or report to rule on this. In this case, the judge is not required to delve into what HERA did or didn't allow, or what rights were given FHFA to do whatever it wanted. It also doesn't raise the issues of sovereign immunity or even self-dealing. It doesn't require a decision on the appropriateness of barring judicial review. It ONLY asks if a taking under the Fifth Amendment of the Constitution took place, and if so, a remedy to address that action.
The discovery campaign is a FARCE that now leaves all shareholders to ponder if there is any real hope, ever, as this grinds into legal oblivion. It all becomes moot if the money runs out or Congress finally acts on a reform measure. And the great hope that Perry will be either favorably resolved for shareholders or remanded back to Judge Lamberth for some huge reversal could prove out... or... prove to be wishful thinking and fatal to stockholders.
JMHO.
Ridiculous. How could the judge know what discovery could turn up? The process requires discovery to be available to plaintiffs. It does NOT require them to demand it. Why did they? They didn't need it to support their original complaint of a taking. Their initial filling laid out the full justification for that claim. And they didn't require any discovery to fend off procedural and jurisdictional reasons why the government was requesting dismissal.
I'm not totally sure where you are confused, but I will try and state things in a different way to see if I can help.
1. Fairholme filed a simple claim for a taking under Amendment 5 of the constitution.
2. Fairholme's attorneys did not need any further documents from discovery in order to take this claim to trial before Judge Sweeney. It was a simple, cut and dried matter.
3. Government filed a motion to dismiss, citing jurisdictional and precedural reasons why the court should refuse to hear the case.
4. Fairholme's attorneys then had a field day filing for document discovery that was never really needed in the first place to support either their original takings claim, or a rebuttal to the motion to dismiss.
5. So here we are, 3 years later, squabbling over documents that are genuinely only useful in other cases, not either aspect to the Fairholme suit OR the government's attempt to have it dismissed.
I just don't see anything confusing about this analysis. It just reminds me of the old nursery rhyme: "All around the mulberry bush, the monkey chased the weasel. That's the way the money goes. Pop goes the weasel." The only thing is that in Fannieland, the "pop" is the dreams and expectations of preferred shareholders that are depleting by the day as all the money goes for billable hours and the share price hovers, 8 years later, at bottom feeding levels reminiscent of September 8, 2008.
JMHO.
Simple? LOL. There isn't even a court agreement to allow Jacobs, Hindes to finalize their amended complaint. This, alone, could take months before even the full extent of the complaint is known, let alone responded to. Then there is the question of status on Steele's letter to Judge Sleet the novel matters be sent to the Delaware Supreme Court. It appears NOTHING has been done on this, even after the stay was lifted in June.
The process would require the next step being a formal request from Judge Sleet to the Senior Judge, Delaware Supreme Court, who then must agree to even take the matter on for a decision.
Steele had a chance to file an amendment on the illegality under Delaware state law to pay preferred dividends to one class of preferred shareholder (government owning senior preferred shares) or whether the law requires a pro-ratedly similar distribution to ALL preferred shareholders, both senior and junior in status. This is near identical in complaint to the Fairholme takings claim, except reduced to the state of Delaware level where Judge Sleet could have immediately acted without dibs to any higher court.
Another legal blunder in Fanniegate. This could have solved the entire Fanniegate mess for Jacobs, Hindes and all other junior preferred shareholders, including me. Instead, we now have a wasted opportunity and years of further delays while the meter runs out and the GSEs go to liquidation in insolvency.
JMHO.
Spot on. I have said this for years and years. Failure to file a challenge to HERA on constitutional grounds from the get go is a classic legal blunder that has led to this long-running quagmire.
JMHO.
I suspect that you never read the original 28 page Fairholme complaint because no discovery was ever needed to take that one to trial. It was a cut and dried takings claim under the Fifth Amendment. And no discovery was needed to address the government's initial motion for dismissal. You missed the entire point of this extended conversation. THERE WAS NO NEED FOR DISCOVERY AT ALL.
This case could have gone to briefs in mid-2014, amended briefs in late 2014, oral arguments in early 2015 and gone to Judge Sweeney for a decision in mid-2015.
Instead, we are still in discovery for the original motion to dismiss in 2013. That is sheer insanity. Fairhome is paying out the wazoo millions of dollars in billable hours for absolutely nothing except to benefit other suits filed against the government? Meanwhile, Bruce's investors are seeing a huge amount of resources tied up in legal expense, no growth in Fannie Mae S/P with resulting increases in their fund's investment value and no glimmer of a positive verdict or any settlement on the horizon.
If that is a "pompous" conclusion, so be it. It just seems like simple, straightforward factual reasoning to me. The Fairholme team is either being pig-headed, at best, or possibly other unsavory observations about insensitive to the racking up of needless costs borne eventually by Fairholme fund investors, in my view. Over 3 years since the initial filing and everything is bogged down in discovery and a ruling on whether to even hear the case?
This is not a case of delays prompted by government stonewalling document release. That all sounds good in blogs condemning the government's alleged misdeeds. But the fact remains that chasing the documents around the mulberry bush for 3 years was the result of plaintiff's pointless pursuit of "smoking guns" unnecessary to pursue its own claims against the government. It is a self-inflicted wound and, in fact, may actually have led to numerous other suits being filed that even further bogged down the legal process and any chance for an actual settlement... because the limited Sweeney document releases emboldened other plaintiffs to jump on the bandwagon and try to also grab some cash out of Uncle Sam's deep pockets.
All JMHO.
I disagree. Had Fairholme simply addressed the initial motion to dismiss, which certainly should have been expected pretty much exactly as filed, the only accomplishment necessary was to gain Sweeney's approval to go to trial. The problem was created when document demands dragged on and the government retaliated with the Amended motion to dismiss which questioned Fairholme's eligibility to claim a taking when it had no shares or property under its ownership at the alleged point of the claimed taking. This one IS problematic, to me, and could eventually lead Sweeney to dismiss. But had Fairholme simply responded to the original dismissal filing, this could have been avoided.
JMHO.
No, you are not wrong. Government filed a motion for dismissal on December 13, 2013 and all this discovery morass has drug on over whether the case will be heard or dismissed. No documents are needed for Cooper & Kirk to rebut the government's reasons for seeking a largely procedural and jurisdictional dismissal.
Fairholme is no farther along, some nearly 3 years later, than it was at the outset. It needs to cut through the gridlock.
JMHO.