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Yes, that is protected by the Fifth Amendment under the U.S. Constitution. If you go back and read the original 28 page complaint filed by Fairholme, the case is both convincingly and simply stated as a black and white question of law. NO discovery was neccesary to fully brief the court on the takings claim. Nothing in HERA can be ruled as legally trumping the U.S. Constitution.
Sweeney's courtroom needs order restored by Berko's attorneys to go back to the original takings claim and get on with it. Everything else is Kabuki Theater leading only to delays, motion-wrestling and month after month of no decision gridlock.
JMHO.
No. Due process could only apply to cases filed prior to the Fairholme claim being filed. Fairholme was docketed on July 7, 2013. It's claim can go forward and a decision may be rendered by the court while the newer cases spin in other jurisdictions unless those cases get consolidated which seems highly unlikely in the Fairholme takings complaint.
Your conclusion could only render the Fairholme case a worthless dinosaur to be put on a shelf for the next many, many years. Fairholme may as well withdraw it and let the other legal teams scrounge for their own discovery. Right? That outcome would make Perry's Appeal the last gasp, enroute to some eventual SCOTUS ruling? I find this totally farfetched.
JMHO.
Fairholme's Fannie filings are a fabulous failure.
This case began as a simple, 28 page complaint citing a taking of property from preferred stockholders in violation of the Fifth Amendment of the U.S. Constitution. Had Cooper & Kirk stayed this course before the Court of Claims, Judge Sweeney could have and likely would have issued a ruling favorable to plaintiffs regarding the sweep.
Instead, this case became just one cog in a triumvirate of litigation trying to attack the government on several fronts, each from a different angle. The Fairholme suit was not content to remain true to its takings claim. No. It allowed itself to devolve into documentgate and an exhausting discovery process that involves seeking information with little apparent impact on the takings claim on which its original filing was based. All this wrangling over discovery and protected documents may be highly relevant to other suits pending against the government. But I see very little-to-no value to it in the Fairholme matter.
A taking claim, at face, is not much different from a car theft claim. Something was either taken, or it wasn't. Period. The motives for the theft are not material to the question of taking. Fairholme has failed before Judge Sweeney because it has become a stalking horse for other plaintiffs in other suits looking for proof of claims other than the Fifth Amendment taking. All of these experts writing books, blogs, articles, columns, papers and even films about Fannie Mae and devoting endless, mindless commentary on the 11,000 documents simply avoid the simple truth. None of this discovery material debate and motion-wrestling that continues to go round-and-round thee mulberry bush matters in the takings suit.
I have said it before. I am saying it again. The takings claim is the valid case against government's actions. It has been hijacked by lawyers in other related cases who may really benefit from release of those documents. And it has been overwhelmed by verbiage from pundits trying to sell blog content that only obscures the departure from a workable outcome for preferred investors. How about letting the other legal teams fight their own battles? Bruce Berkowitz needs to pull the plug on this charade and get his legal team back on the track to SIMPLIFY the Court of Claims matter and litigate the takings complaint as it originally was spelled out. Enough of this BS.
JMHO.
All the level II stuff would be appropriate if it was the screen for Fannie Mae shares, not Freddie Mac shares. Reporting on Freddie Mac belongs on the Freddie Mac message board. Fannie and Freddie do not often trade in tandem, as in today's trades. Freddie is trading down .015 and Fannie is trading flat as of the 2.45 ticker. There is no correlation between the two, again, today. The gap, however, has narrowed over the past week.
Thanks!
PriceWaterhouseCoopers is the auditor for Freddie Mac, not Fannie Mae. No settlement in this case will affect Fannie Mae shareholders in any direct way.
senior preferred dividend. That is on the preferred shares owned by the government. As I understand it, Delaware corporate law makes it illegal to favor one preferred shareholder while shutting out another. This is what I expected that the amended complaint would contain... an actual, actionable complaint that could cut through the gridlock and trigger a favorable ruling for all preferred stock-owners. Instead what we got from MoeRon Steal is some limp-wristed gambit that will add another six month limbo dance AND a whole new round of briefs needing to be filed, countered, refiled and re-countered. "Fully briefed"claims for this one are nothing but wild fantasy.
Very disappointing. VERY. It is now Perry Appeal or Bust in Fannieland.
JMHO.
Steele finally files something before the court seeking leave to add one additional complaint to the three remaining after the pare back to avoid consolidation. The "new" complaint is an enrichment claim against UST.
Very disappointing. I was hopeful of a claim with some real meat on it. I was expecting a real salvo, like contesting the legality under Delaware state law of paying pfd to one class of shareholders while stiffing other classes of preferred shareholders. Such an initiative had a serious chance of legal favor and a speedy resolution to the Amendment 3 question.
This latest gambit is just another "ho-hummer" that will accomplish little, if it even gains court approval, and will likely only serve to delay everything for another 6 months, just like the hiatus after the stay was pulled.
JMHO.
So!
Now that the Hume "breach of contract" complaint has been totally discredited by Richard Epstein, what else remains an obstacle to dismissal of the Perry Appeal?
Anything?
JMHO.
If discovery documents released were of substantial value, this would go to trial. But, "NO" the plaintiffs need more, more, more because their witch hunt has turned up NOTHING consequential.
The prosecution's case(s) are failing, one by one.
JMHO.
Too bad Hamish Hume didn't read this two year old article before blowing his foot off with a stupid brief filed before the court.
Hamish has 3 basic points he is using to stave off a dismissal. Breach of contract is the ONE that most cite as having a chance for success, while "taking" and "self dealing" appear to be easily dismissed by the empowerment granted by HERA.
Now it appears that Richard Epstein SHOT DOWN his single best opportunity to avoid confirmation of dismissal in a treatise available to everyone back in 2014. Nice job on diligence. LOL.
JMHO.
Did Richard Epstein irreparably derail the Perry Appeal?
Hamish Hume makes huge legal ado about the contract bestowed on junior preferred shareholders because of the verbiage in the stock certificates which he cites as a contract. Did he overlook the fact that even more over-riding verbiage was contained in the senior preferred stock certificates given government in confirmation of the senior preferred stock?
Epstein used this Senior Preferred Certificate as justification for disposal of the accumulated SPD. But it also confirms the government's ownership of succession rights as SENIOR preferred shareholders.
http://www.forbes.com/sites/richardepstein/2014/09/10/what-happens-if-the-government-loses-on-the-third-amendment-the-senior-preferred-stock-certificates-spell-nothing-but-trouble-for-the-government
Yes, lets have an honorarium for Richard Epstein who may have destroyed the contract complaint that was the best possibility for a shareholder victory vs. government in the Perry/Fanniegate Appeal. Thanks, Richard. You are the best!
JMHO.
Seeking Alpha has been pushing for Amendment 3 being overturned with the promise of enormous investor gains since like the days of the horse and buggy. Just awhile ago it was $27 to $37 estimated for common shares. Now it is apparently a preference for preferred shares? The Hooded Falcon said that preferred shares could deliver value quickly to investors, but now Seeking Alpha's Bradford says dividends will only get restored if interest rates go way up? Yet he owns preferred shares?
Very confusing. Misleading, even? What's up with Seeking Alpha's inability to make up its mind on Fannie Mae & Freddie Mac?
Plaintiffs declare war on Delaware's Judge Sleet? First former Judge Steele demands a Delaware supreme court ruling and specifically demands that only a more senior justice rule on novel issues in Jacobs, Hindes. Now Tim Pagliara tells off Judge Sleet and, in essence, tells him to go take a timeout and stand in the corner.
Poor Judge Sleet. Insulted. Demeaned. Put in his "proper" place in the lower regions of the judicial food chain.
JMHO.
Garbage.
No, I think Judge Margaret Sweeney is only concerned with getting the Fairholme claim before her court discharged via a ruling. This has dragged on for over THREE YEARS. The initial complaint was docketed on July 7, 2013.
Trust me, no justice in a case that has taken on a life expectancy like this one cares one flying flip about releasing documents that are helpful to any other case before any other judge. I am sure Sweeney is sick of document and discovery issues. I know I am!
JMHO.
I agree that the volume of documents is the major contributor to delay after delay. But why did plaintiffs request everything but the kitchen sink if all they really needed was 5 or 10 documents? The plaintiffs dug their own graves with a witch-hunt-of-extreme-excess. The burden this imposes on the court will not go unnoticed by Judge Sweeney. She has already expressed some measure of outrage directed against government resisting release of scantily problematic content. But the big payback for plaintiffs is in the on deck circle, all warmed up and ready for a gametime appearance.
JMHO.
Three judges said that the FHFA broke no laws because HERA enabled their actions. No plaintiff ever challenged HERA's constitutional legality. All that remains is the housekeeping question of whether UST acted improperly by accepting "the sweep"... or... if some of it should be returned to FHFA to be used for other purposes that may not benefit shareholders any more than the status quo.
That is the absolute truth.
JMHO.
Garbage. Read the link I posted earlier. Even Congress was unable to review the specifics of the Black Rock inquiry. They tried. They failed. Baucus and others were royally pissed, as I seem to recall.
There's gobs of stuff on the internet regarding the Aladdin system. There's gobs of stuff on the internet on building a nuclear weapon, too. But not the really cool stuff that enables a full understanding of assembling a global nuclear deterrent.
What the government got from Black Rock in analyzing the risk pro-forma on the GSEs will NEVER be made public. NEVER. EVER. Nor should it be. NEVER. EVER. Not if you love the United States of America.
JMHO.
You should read the variety of posts from rekcusdoo on this board. I do not agree 100% with all of them, but largely he "gets" the legal side of things, spot on. Sweeney is NOT in the driver's seat. The Perry Appeal is in the spotlight and is farther along than any other litigation.
Who gives a crap about fully briefed motions that have gone unchanged or un-expanded since February? This is September. That case is hopelessly mired in discovery gridlock. Just like Jacobs, Hindes which also sits in a Springsteen-like "Tenth Avenue Freezeout" hiatus, prolonged by an inability to even file an amended complaint. The surviving Pagliara suit can't even get beyond a procedural impasse on remand to the Delaware Court of Chancery. Vuacola is lost in attorneys-of-record disputes after allegations of bounced checks and unpaid legal expenses. Thapar recused himself and left that mess in a Disney "Fantasyland" rabbit hole. The Edward's "50 men for themselves" Miami circus is on the fast track for a discovery hearing in some South Beach sleaze bar.
The Perry Appeal is IT. Once that ruling comes down, life as many have known it will forever be changed.
JMHO.
Are you confusing Gretchen Morgenson with Rhoda Morganstern?
No judge/judge's panel worth their salt will defer any decision on any pending Fannie Mae suit because of a disconnected election timetable. The judiciary is not a politically driven estate. I believe a decision in the Perry Appeal has already been reached and is only awaiting the final written ruling to be fully texted with annotated legal support, with two judges assenting and one judge dissenting. I expect this will be released LONG before the November election and possibly as early as on or around October 1st.
Some heads are going to explode with this one!
JMHO.
That was in FEBRUARY. No. I am not interested in re-reviewing ancient history.
I can't speak to the content or relevancy of 11,292 documents. What I can say is that any of them that have to do with the Black Rock/ Aladdin's super-computer system will remain subject to secrecy and privilege, and with very good reason. The national security could be seriously compromised by this highly sensitive technology, somewhat analogous to releasing the nuclear launch codes for the destruction of financial markets in the U.S..
Judge Sweeney will NEVER release these documents. Doing so could cause irreparable harm to Black Rock and lead to an enormous lawsuit for exposing corporate secrets by the court. This will NEVER happen. Sweeney is a very experienced judge. She will never risk impeachment for treason by compromising national security. Care to disagree?
See, I actually think that the Black Rock stuff may well be the actual crux of Timothy Geithner's decision to enact Amendment 3. This probably was the justification used to wind down the GSEs. I have been resistant to introducing it as a discussion point and had no urgency to do so since no other pundit ever chose to mention what I viewed as sacrosanct material, unsuitable for public consumption. Now that you elected to inject it into the dialog, it must be understood for the risks public pressure-to-expose may focus on our country's financial system. I am convinced that it explains the seeming euphoria at UST when Amendment 3 went through. Where I disagree is that it was a shield for some unseemly ulterior motive or supported some other preservation of the GSEs being healthy conclusion.
Either way, I see no way where Judge Sweeney is going to release any doc's that support the premise that no risk existed to threaten the GSEs ability to repay its bailouts except via circular borrowing of money to repay money already funded once by taxpayers. Not if ANY of it comes from Aladdin-based super-computer technology that our global adversaries would love to either understand better or potentially acquire.
I actually view it as a disservice to our country that you chose to bring so sensitive a technology to the forefront. Making $$$ is one thing. Compromising our nation is another.
JMHO.
Black Rock managed the risk profile data for Fannie Mae and Freddie Mac... along with Bear-Stearns and AIG and other notable "players" in the financial crisis era using proprietary super-computer technology called Aladdin. They provided substantial data to Geithner and the U.S. government and this is what the ghouls are drooling over... the possibility that some metric may exist that shows Amendment 3 wasn't necessary. I had hesitated to introduce this topic to the conversation, here, but now that Bradford has rubbed the vase and freed the genie from the bottle, here's what I believe.
1. The documents are legally protectable under all manner of reasons and will NEVER be released by Judge Sweeney.
2. The documents contain matters of absolute national security.
3. The content of the documents is likely to corroborate UST's decision to enact Amendment 3, leaving only the question of the legality of such action as a valid complaint.
Here's a few tidbits on your "twisted/misleading/biased mind" attempt at discrediting someone who may just know a hell of a lot about Fannie Mae that could be useful to investors in FnF shares:
http://www.vanityfair.com/news/2010/04/fink-201004
JMHO.
But you JUST said: "wait 'til the BlackRock documents come out." Right? Did I misquote you?
Why would anyone say that about the relevance of documents yet to be released if they had no idea what was in them?
Maybe you misspoke? Lied? Were part of an inside conspiracy to skew public opinion to favor a profitable outcome for certain investors?
Many options, there, and maybe more you would like to offer for consideration. Please clarify.
JMHO.
Is there another Fannie Mae "Documentgate" issue that threatens the possibility of a mistrial in Judge Margaret Sweeney's courtroom?
Have protected documents from the Fannie Mae/BlackRock cache moved from sealed to available to bloggers with inside attorney-or-other connections (though still under seal to "ordinary" citizens)?
Would that be legal? Illegal? Prosecutable?
Beats me.
JMHO.
But you keep bringing the BlackRock documents up.
Why? Why do you say "wait 'til you see the content in these documents"... or words to that equivalent... if you have not seen them or know what their content means for investors hungry for good news? Be real. You may regret being exposed as HAVING SEEN THEM, but that is a problem I cannot help you with. That will be up to Judge Sweeney.
You see, this is the difference between JOURNALISM and chicanery.
At least George Will, Bethany McLean and Gretchen Morgenson deal in the world of facts and interpretations of what they mean. Just like John Carney and Joe Light. I do not agree with everything they say, but I do not disagree with most of what they say.
Then there is YOU!
JMHO.
Ah, yes,the BlackRock Fannie Mae documents to which you refer. Again. For you to be so certain they are all that condemning, you must have already seen them. But they are still under protection, right? How can you have seen them?
Is this yet another Fanniegate a/k/a Documentgate fiasco looming on the horizon for Judge Sweeney to have to wrestle with?
No court is ever likely to buy into the bizarre conspiracy theories authored by agenda'd myopics that bury their heads in the sand and pretend to be oblivious to the HUGE body of credible evidence that has been placed in the public's purview in both credible print sources and lengthy and comprehensive testimony before Congress in both houses.
Barrons released a hugely condemning report on March 10, 2008 which clearly opined that the GSEs were headed to insolvency. Refutations that the GSEs were somehow otherwise profitable were based on voodoo accounting, derivatives and all manner of risk "sheltering" at least according to many experts, both government and otherwise. The timeline of events leading up to conservatorship leaves little wiggle room for any conclusion other than that the government acted out of concern, not some greed-driven conspiracy put forth by Inspector Clouseau. Regulator James Lockhart's comments offer substantial color to the challenges faced in the lead-in period. And, yes, some of the precipice was reached because of affordable housing goals, but that was the mission laid out by Congress and accepted by the GSEs. In fact, Fannie poured gasoline on the fire by expanding market share into subprime and Alt-A dark pools. It's all here:
http://online.wsj.com/public/resources/documents/fannietimeline0506.pdf
JMHO.
Until the new lawsuit Gatling gun started firing out a carpet bombing of filings, a settlement was the best resolution to ALL the original complaints filed by Perry, Berko and Ackman. I think we all came close on that on more than one occasion. But Gary Hindes fired the first complicating volley, followed in rapid succession by a state-by-state initiative towards a class action bonanza, followed by desperation moves against first auditors and then GSE directors... leaving the path to any settlement cluttered by so many plaintiffs with conflicting goals as to make a consensus the new impossible dream. Even the Investors Unite campaign seems to have fractured as Pagliara strikes out on his own.
I actually like Glen Bradford. I disagree with him on a lot of his Seeking Alpha stuff, but he has done more DD on FnF than even I likely have, so I do respect that... and at least most of his views. But even his reports have moved towards an almost dark and defeatist tone this week.
The Cacheris ruling is a major blow to plaintiffs goals. Especially layered on top of the earlier Pratt ruling that only I chose to introduce when no one else EVER mentioned its relevance despite the precedents contained therein.
It is setting the stage for an "each man for himself" legal showdown where the government's defense stands united while the plaintiff's legal complaints are now a disconnected and conflicting mess with so many mutually-exclusive counter-pointed goals as to make any unified offensive campaign impossible.
JMHO.
Any further bailouts doled out to the GSEs will send Congress into toxic catatonic political shock-and-awe retaliation from the Grover Norquist rank and stank army, led by the Speaker of the House. You know, the one that looks like Eddie Munster?
The Federal charters get revoked, the conservatorship ends and Fannie & Freddie find out what life after divorce is really like with no alimony or child support from Uncle. Just a bunch of regulation requirements that must be met. Banks won't loan them any money in that scenario. Too risky. And equity markets aren't likely to play ball, either, especially after floating all that suspended preferred stock in the lead in period to conservatorship.
So that leads to the doomsday default outcome. No choice but to liquidate.
JMHO.
Government will have no choice if the GSEs enter receivership. The conservatorship ends, FHFA disappears and a liquidation trustee will settle all affairs in a wind up, not wind down distribution of proceeds from asset sales and cached reserves. The battleground then moves the legality of senior preferred equity vs. junior preferred equity to the forefront in a true, "fully ripe" scenario that even Lamberth would like rule on in favor of junior stockholder rights.
JMHO.
The dude that wrote that article owns preferred shares, only.
And, surely, any stock can be made worthless via any number of mechanisms and events. But there is NO outcome where common shares finish in the money and preferred shareholders get nothing.
Any investment in any Fannie Mae stock carries a high level of risk. But pfd shares carry a much larger safety net than commons.
JMHO.
Lamberth, Pratt & Cacheris - the Trifecta of Terror. No wonder Bruce Berkowitz dumped Fairholme's common shares and fled to the safety of owning preferreds.
Liquidation preference? Yowsa, yowsa.
If government wins total dismissals, running the table, both GSEs will likely enter receivership in January, 2018. That's when the fun starts. Owning preferred shares with a liquidation preference is your ticket for admittance to the party. That's why all the big players except Mr. Short Harbalife own pfd... it's their HEDGE if the legal adventure peters out.
JMHO.
What really would be "right on" would be an detailed explanation of why a position in both Fannie Mae common and pfd shares somehow magically transformed into a different position in preferred shares, only.
That explanation would be appreciated.
Thanks.
Glen Bradford sold his common shares? What part of this isn't resonating? This is like Ackman selling his shares. Pagliara selling his shares.
This is like a capitulation. A surrender. A RUN FOR COVER!
Bradford is the guy that screamed the loudest and most frequently about how the government cheated shareholders, then goes online with admissions that he only owns preferred shares?
What gives? See his post on FNMAS board here on Investors Hub for further questions about how he really views common shares. Then ask yourself how so many quotes of his Fannie Mae articles are put out there as the rationale for buying FNMA commons while he is dumping them like the proverbial hot potato?
This guy has written far more published articles on Fannie Mae than Mclean, Morgenson, Fiderer, Will, Maloni, Epstein, Howard, fake TimHoward717, Sullivan, ad nauseum...
The HERO sold out? Cut and ran? Omigod! And I must have missed his article where the defection was announced. Oh, snap. Maybe the preferred shares don't look so bad, after all?
Very,very long FNMAS. And glad of it.
JMHO.
Read former judge Steele's letter to Judge Sleet in the Jacobs, Hindes case for any questions or clarification of terms used. If I misquoted a word, there, that will clear it up right away for you. The document deals with "novel and undecided issues of state law" in a January letter from Myron T. Steele (a/k/a Judge MoeRon Steal, to me) to Judge Sleet.
It's all available in gselinks.
JMHO.
I actually agree with you. Part of the delay is, of course, the consolidation request by government. But a larger element remains the resolution of Steele's letter to Judge Sleet on novel and unprecedented matters of law and a request for deferral to state Supreme Court senior justices which seem to strip Judge Sleet out of the matter for which he presently stands charged with resolving.
Not smart, IMHO.
The markets are closed on Monday, Labor Day. People are scared to hold over a 3 day lockout period where than can awake, Tuesday morning, to news that they just got wiped out by a Fannie Mae dismissal verdict.
And, yet, Glen Bradford seems to have sold all his common shares. Why would the biggest mouthpiece for Fannie Mae shareholder rights sell commons and only own preferreds if everything was equal?
Fear is growing, even in the Fannie loyalist camps. The dominoes are falling. Dismissal is in the air.
JMHO.
I bet you and also the good folks at Potter-Anderson would know better than me on Delaware Fannie Mae activities.
Personally, looks to me like nothing is going on. Just waiting for a DC Appeal verdict. No amended complaint filed. No more Investors Unite sessions featuring former Judges recently retired from the Delaware Supreme Court bench.
It's just like you said... (?).
Good day to you, "Potty".