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.
That's why I think the Jury Selection process took almost 2 days, the Jurors are the key and the Standard of proof is "more likely than not" (by a preponderance of the evidence) in this case.
Well, Ms. Davis seemed to fire up the Jurors in her Opening. When the Government Attorney spoke to the Jurors they listened to him too but even as of yesterday they still seemed skeptical of the Government. FandF said it best the other day in his outstanding Tweets, the Government's Attack Plan here is to Confuse, Deceive, and limit the flow of information to the Jurors.
Yesterday, the Government Attorneys would get real excited talking about how the super generous federal government actually WAIVED the Periodic Commitment Fee for the EXTRAORDINARY Government Assistance here. The Government Attorneys voice pitch gets higher and he increases his voice level and leans in from the podium towards the Jurors to emphasize the point. Professor Thakor shot this down in flames, but does it create a seed in one or two Jurors heads? Who knows. Probably 99.99% of people don't even know what the hell a Loan Commitment Fee is much less in how they are priced in a situation like this involving tens of billions of dollars.
David Sterns, their lead guy (I think that's his name) and the other Government Attorneys (Ian Hoffman-crossed Professor Thakor) and some other dude that is their hyper focused Objection Guy who will easily Object 50 more times before the trial ends as he is ready to pounce and shout out OBJECTION! at the mere whiff of a remote possibility that it will be granted (this is used to disrupt the flow of the trial and break the concentration of the Plaintiffs Class Attorneys) and their team are planting little seeds of reasons for the Jurors to find for the Government here.
Right now, it's all about the presentation of the Plaintiffs Class Chief case, but the Government is trying to plant doubt. Their seeds of doubt: (1) the circular draws (aka the DEATH SPIRAL) that the Supremes took hook, line, and sinker. (2) Ed Demarco was saving the US Secondary Mortgage Market by signing off on the NWS, the UST holds all the cards and old Eddie (with his back against the wall) had to address the December 31, 2012 deadline, the Expiration of the UST Commitment, (3) the uncertainty by Freddie's CFO who said that they weren't positive that the future was as bright as some predicted in their 2012 10q (4) standard boilerplate language in the 10qs and 10ks (08-12) during the Conservatorships saying that the companies aren't sure when or IF they will be able to pay the draconian 10% quarterly interest payments (5) the massive accounting losses from 08-12 booked by the GSES, (6) the idea that all Shareholders had notice in HERA that the NWS could happen and we have no legal rights in Conservatorship and (7) probably a couple of other items.
We'll see what the Jurors think in the end.
The Castration Clause: "During Conservatorships the FHFA can act in it's own best interests and or the public it serves.". The SCOTUS invoked this in Collins, didn't J. Lamberth basically say in 2014 or 2015, the FHFA's powers are 'yuge' under HERA, the FHFA can basically do what it wants, and Shareholders only recourse is to write a letter to their Congressional Representatives for Justice?
Yesterday, Professor Anjan Thakor sat right next to J. Lamberth on the Witness Stand and answered questions from the Government Attorneys. One of his answers was: the NWS was NOT in the best interests of the FHFA nor in the best interests of the public it serves. The paramount Interest of the US Government (and the public it serves) is the Stability of the US Secondary Mortgage Market.
Professor Thakor said that the NWS or 3rd Amendment, by taking all the GSES profits into perpetuity is not in the Public's Best Interest BECAUSE it makes the GSES never able to build Capitol and all financial intermediaries need Capitol.
It was later in the afternoon when he said it. J. Lamberth looked like he was paying attention but perhaps he was thinking about his weekend plans instead and didn't hear him !
We'll see shortly whether or not the Jurors understand this.
Yesterday, Professor Anjan Thakor on the Witness Stand, pointed out to the Jurors (and anyone else listening) that the NWS was unnecessary because:
1. The GSES were charged 10% or TWICE the going Bailout Interest Rate of 5% for all the other Bailout TBTF financial intermediaries. Hence the 10% return the UST received is more than adequate and the NWS was unnecessary.
2. The PCF on the remaining draw amount after his thorough analysis determined an appropriate PCF between 2.5 bps and 45 bps.
3. The NWS or 3rd Amendment was not in the Public's Best Interest since the Public Interest here is the stability of the US Secondary Mortgage Market. By taking all the profits into perpetuity, the corporations could never build Capitol.
It's just simply a Breach of Implied Shareholders Contract trial, nothing more nothing less.
I believe when the lawsuit was filed on 07 10 13, and after the Gubmint neutered all the other Claims over 10 years of intensively fought pre-trial litigation, this is all that remains with this one lawsuit.
What's fun about this trial is that the Gubmint has to try to justify the biggest theft from Citizens in US History through Deception, Confusion, and other means to win this one.
It's obvious what's going on here to us for sure, but to the man or woman on the street it's not so clear. Especially when the US Government lawyers are claiming that the US Government is just doing its job protecting the public interest and that during Conservatorships the Shareholders have no rights.
Believe it or not, I'm pretty sure Skepi would love to see a win here, but is trying to bring optimistic and overly hopeful disgruntled Shareholders down to Earth, especially since Uncle Suggy holds all the cards here (including paying for the Judges and air conditioning in the Courtroom!).
Well, Judges rarely overturn Jury Verdicts.
However, Appellate Judges can order a new trial on Procedural or other grounds.
Didn't Lamberth originally rule that Shareholders beef is with the US Congress writing HERA and Granted the Gubmint's Motion to Dismiss before this trial?
My Senator, Senator Warner never got back to me on amending HERA, do you think he will?
Sure you can do that, just bring your toothbrush with you, it will come in handy during your up to 10 day visit behind door #1 in the Courtroom !
Great Question! I'm sure they aren't doing this one pro Bono !
https://www.sarrafgentile.com/class-actions/class-action-resources/how-are-class-action-lawyers-paid/#:~:text=Generally%20speaking%2C%20class%20action%20lawyers,a%20class%20and%20its%20members.
Shhhhhh! It's a secret don't tell him! Maybe they'll call him as an 'Expert Witness' based on his $75 Seeking Alpha articles ! He's a paid professional, right?
It looks like no one is expecting much from the trial as far as price movements goes. I went down to the Clerk and this particular trial was originally filed on 07/10/13. Over 10 frickin years ago and the Government is as recalcitrant as ever! It'd be nice to get a win though.
Whatever happens here at this trial will very likely be appealed anyway. The one thing I do enjoy about watching the legal battle unfold is that the bright light of day is shining on the dubious governmental motivations and actions here surrounding the Net Worth Swipe.
But no question about it, Litigation against an adversary with virtually unlimited resources and time is challenging.
The FHFA and the current administration seems like they are punting the "exit from the 15 year Conservatorships" to Congress. Also, I don't see how federal government agency officials will resolve this with the pending Litigation outstanding.
Thoughts?
I think she didn't like the Costco Food Court first date suggestion. Although you're offer to let her pick ANY menu item was quite generous !
There's a good steakhouse next door to the Lamberth trial:
https://www.charliepalmersteak.com/washington-dc-home/
It's pretty much a repeat of the 1st trial but with some tweaks and more sharply focused from both sides. The Jurors seem to be paying attention.
Thanks, Navy, it's, Dr. Anjan Thakor, here's the Link: https://g.co/kgs/gZKaUo
That's one of the big problems here is getting into Evidence the internal discussions from UST in the months leading up to the Net Worth Swipe (Executive Privilege/National Security Exemptions). UST Press Releases at the time said they were "winding down" the twins with the aim of replacing them (is that what HERA commanded the Executive Branch to do?).
Nats: In 2008 they opened up a Visitors Center at the US Capitol and on Tuesday afternoon, Lamberth said Opening Statements would start on Wednesday so I went next door to the US Capitol to check it out. They give a 20 minute tour with a Curator and the Rotunda is very impressive. I had no idea that this was opened up in 2008, have you seen it?
Dr. Mason is LSU, Economics, he did his dissertation on historical government responses to financial crisis and testified in Congress on numerous occasions and was interviewed all over the biz press at the height of the Great Financial Crisis. His work done for the trial was in calculating the Damages resulting in the Breach of the Implied Shareholders Contract with Fannie Mae and Freddie Mac, which involved an events study measuring the 1 day drop in Fannie Mae and Freddie Mac JPS and Common Shares on August 17, 2012, the day of the announcement of the Net Worth Swipe.
Dr. Thacker (I'm misspelling his name I believe) teaches at major educational institutions as well and was tasked with calculating a reasonable Periodic Commitment Fee and spent most of yesterday's trial on Direct Examination, Cross Examination, and Follow up Examination. He's the Gold Standard in Expert Witness Testimony. As I recall, the appropriate PCF was between 2.5 bps to 45 bps on the UST loan Commitment Outstanding. Freddie Mac calculated it at 25 bps but gave no color on how they determined it.
The next Professor to testify will be an Expert in Accounting and he is Excellent as well.
He shredded everything the Government tried to use to discredit him and calm and cool as a cucumber.
The next Plaintiffs Class Expert Witness is excellent as well. I don't know if they got to him today as I had to exit early.
Professor Thacker is just awesome! Fantastic listener, superior knowledge and expertise and perhaps the BEST EXPERT WITNESS EVER!
I think the Jurors are beginning to see that this Periodic Commitment Fee scare tactic by FHFA is just BS stuff designed by the Defendants to Distract and Confuse.
The next Expert Witness is excellent as well. But I gotta go.
Good luck all!
That's right yesterday was: VICTIMS OF THE FEDERAL GOVERNMENT OVERREACH EXPOSED, plus Dr. Mason gave his Expert Witness Testimony about just how ridiculous something called the Net Worth Sweep really is.
Today, 2 more Distinguished Professors, one of Finance and one of Accounting, I believe.
At the close of the courtroom proceedings yesterday, it was disclosed that the Government Attorneys are continuing their "ambush at trial" technique with the filing of a Motion to Exclude Evidence from seeing the light of day here at the very last humanely possible minute.
The Gubmint's got A LOT TO HIDE HERE from the Citizens and so far have kept out tons of Smoking Guns. You know how important Mortgage Banking is to National Security Interests and we don't want to embarrass the higher up Government officials at UST and FHFA from 2012, do we?
I imagine that they will argue about what comes in and then call in the Jury before 11am and restart the trial.
He's got lifetime appointment like all federal Judges, frankly they can rule how they want, everyone can appeal a Judges decision if they are unhappy.
It's true that they are tasked with making close calls but generally they listen to each sides arguments make a decision and move on.
The inherent bias and home court advantage for the Gubmint likely comes from the fact that you've sent people to prison for life or some other term period based on representations from the Government, and that reinforces your beliefs that what the Gubmint says is true.
On the other hand, I've seen Judges rule against the Gubmint all the time and it doesn't bother them a bit.
333 Constitution Ave, NW, Washington DC
6th Floor, last Courtroom on the left. It's nice and cool inside and it gets hot in DC in the Summer.
Other Shareholder Victims of the federal government overreach here come by and I have seen them come in and we you know, do the little fist pump thing for solidarity.
I brought my girlfriend down there on Tuesday, but since the Opening Statement wasn't until the next morning, we went next door to the US Capitol (the birthplace of HERA) and they have a very nice Visitor Center and you can take a quick tour with a knowledgeable Curator and I thought it was great. The US Supreme Court is nearby and Skepi can give them the finger as he walks by !
I take the Metro Subway to the Judiciary Square stop and keep walking straight, the Courthouse is straight ahead.
HeeeeHeeee! I'm actually looking forward to tomorrow, where 3 distinguished Economics, Finance, and Accounting Professors who have all been well published and appeared on CNBC, Wall Street Journal, Bloomberg, et. Al. will testify about their hard work and analysis specifically related to the Theft here.
If anyone even mentions anything related to the 1st trial in front of the Jurors it's OBJECTION! MISTRIAL, and Round 3.
The trier of facts here, the Jurors, should be able to decide this case de Novo or brand new without undue influence from the previous trial.
This afternoon the Expert Witness showed a slide that calculated the one day Loss for Fannie Mae and Freddie Mac shareholders on the day the Net Worth Swipe was announced at $2.12B, the next slide showed Interest that the Jurors could add on top of the $2.12B.
The $2.12B includes the Fannie Mae Common which aren't part of the Plaintiffs Class in this trial and I think Fannie Mae Common one day Loss was something like $70m.
Ohh, there WILL very likely be an appeal here, and that's another reason for all these years of pre-trial Motions and Objections.
Hey, lawyers gotta eat too !
I think the D's didn't like the Plaintiffs Opening Statements yesterday and are seeing the writing on the wall that their client, the Government can't treat Shareholders this way.
We'll see what happens.
That's right, no way anyone in the Courtroom can hear them. Remember that old Philco am/FM radio in the car, back in the day? It's the same noise you get when turning the knobs, Pssssssszszzssssssssssszzzzzzzzzsssssssssssssssssssssssssssssssssssssssssssssssssssssss.......
Not overly annoying but effective at making sure no one can hear them.
Sometimes one of the attorneys pounds their fist on the table or waves their free hand in the air or you know, just looks a little pissed.
I'll ask Lamberth if he could play some beach music songs instead next time !
Last time, Hamish asked Demarco, "Does the Net Worth Sweep conserve and preserve the companies assets?". Astonishingly, Demarco answered, "Yes". Then went on to explain why he signed off on the Net Worth Sweep.
I was amazed to say the least
After Hamish's Cross Exam, Demarco came across as the most incompetent governmental official ever.
Lamberth's been on the Bench for decades, he's seen all the tricks the federal bar may try to pull on him.
During the pandemic, I think they initiated this phone thing. There is a phone on the Judges Desk, and a couple of phones on the Plaintiffs and Defendants desk. Here's how it works:
Plaintiffs Attorneys: "So expert Witness, what is the impact of the Sweep on the current value of the shares?"
Government Attorney: "Objection! Phone Judge?"
Judge picks up phone, White Background Noise fills the Courtroom.
Then the Objecting Attorney starts explaining his Objection to the Judge with the Plaintiffs Attorney listening and then saying something.
Then after the Conversation all parties hang up the phones, White Background Noise disappears and back to the trial.
The duration can be short or as long as necessary.
There's interest too, under Virginia Law (Freddie Mac), it's 6% simple interest per one of the Plaintiffs Class Expert Witnesses today. Fannie Mae is TBD by the Jurors I believe.
Personally, I'd like to see the Government lose and I hope the Jurors are as outraged as the rest of us are. Appeals will eventually be exhausted and the eventual payout will be welcome for many of the Fannie Mae and Freddie Mac shareholders as they haven't received one thin dime since 2Q08 (Freddie Mac shareholders) and 3Q08 (Fannie Mae Shareholders).
It would also replenish some funds for the largest shareholders who have spent over a decade bankrolling the litigation against an adversary with virtually unlimited resources and time.
That's there final slide....
I think that may be right! Another thing the Government lawyers have done repeatedly is the "ambush at trial" technique, were they file last minute objections designed to interrupt the flow of the Plaintiffs Class chief case against them.
Adjourned for the Day. The Government interrupted the Plaintiffs Class chief case over and over again with endless Objections with the aim of hiding information from the Jurors.
Whenever an attorney from either side of the V objects, the Court proceedings halt and both teams of attorneys pickup their phones and so does the Judge and White Background Noise fills the Courtroom so the Jurors can't hear.
This was the presentation part of the case to the Jurors on who exactly the Victims of the Defendants are in the Plaintiffs Class.
They range from Insurance Companies to American Retirees to Individual Investors, etc.
Just before the lunch Berkeley Insurance took the stand and they're just as disillusioned as the rest of us with how the FHFA could tell us that the Conservatorships would be temporary in 08 and 4 years later, on the verge of World Record Breaking Profits, initiate the Net Worth Swipe on August 17, 2012.
Yes, she did some advocating during the 1st trial. She's good and really gets the message across to the Jurors.
Both sides have a team of advocates sitting around 2 large desks plus a small army of support staff.
This case was originally filed on 07/10/2013 and both sides have been giving it there all.
The FHFA harmed 10,000's of thousands of Americans by nationalizing these two great companies, one of which I gave 5 years of my career too. The Jurors may not realize it but if any of them have 401k's with Fannie Mae and Freddie Mac equities in them, they suffered as well.
Not to mention Pension funds, Teachers and Police and Fireman Retirement Annuities, Insurance Companies,.
Worst of all, the Guarantee Fees that hard working American Families pay to access the IMPLICIT federal government MBS Guarantee has TRIPLED since I worked at Fannie Mae (1988-93).