Instead of a Government Bailout, more like kicking someone when they are down and telling them on August 17, 2012, we don't want you to exist anymore!

Ms. Davis is a VERY EFFECTIVE ADVOCATE and it sounds like she hit it out of the ballpark with a packed Courtroom. She's also a pleasant and great communicator and had a killer look in her red dress yesterday, touching all the points and previewing the events in the trial that will unfold shortly.

Thanks FandF!

No you can't interrupt the court proceedings. There's a door adjacent to the Courtroom that the Judge can order his Bailiffs to send you through and charge you with contempt of Court if you act up in the Courtroom.

The most extreme cases of Courtroom disruptions I have ever witnessed is these people that claim that the Court has no authority over them (aka 'Sovereign Citizens'), here's some examples:

Luckily, the Judge called a break during the government Opening Statement when the BS was running deeper and deeper!

Britney Spears got a mention this afternoon, I image it was originally brought up by Hamish in the AM session and must have gotten everyone's attention.

Regrettably, I missed the Plaintiffs Opening Statements this morning, but I would imagine that they did a great job.

Hamish is on the job and is likable and pleasant to the Jurors and a great communicator. Both sides are well represented by a capable team of attorneys and massive support staff.

From what I've seen it's been a great legal battle from both sides.

But this is a government town and home field advantage is the federal government.

I'll try to get back there again tomorrow as the courtroom thins out quickly once the painstaking minutia of the evidence is introduced into the case.

They are trying hard the Government here to spin themselves as innocent.

The FHFA is trying real hard to feed the 'circular draw' garbage to the Jurors.

A lot of people in the Courtroom today, it appears that many Plaintiffs are still interested in Justice for the Shareholders.

Judge called a break, good thing too, I need to get boots on for all the bullsh*t being spewed by the FHFA attorney from his Opening Statements!

No, 6 to Win, ONLY IF 6 Jurors are left to render a Verdict.

It must be unanimous, if there's a Split amongst the 8 Jurors (even 1) then the Judge will tell them to keep deliberating until they reach a unanimous Verdict, like he did last time (aka a Dynamite Charge to the Jury from the Judge).

After 4 or 5 'Dynamite Charges', to the Jury from the Judge and still no unanimous Verdict, then Mistrial and Round 3.

Net Worth Sweep sounds better for the Government than Net Worth Theft !

Today the pews/benches in the Courtroom are pretty full.

Lunch time! Court will commence again at 115pm

Mortgage Banking is a dry, dry, dry subject and Americans are easily bored. I'm sure there will be massive disappointment when the Jurors realize that this will go on daily for weeks.

On the other hand, the Jurors seem to understand the very important role their civic duty plays here, especially after they were picked as the ones to decide the issues in the case.

The Jurors will see a couple of visual charts showing JUST HOW MASSIVE THE THEFT IS.

No question about it. The question is what exactly is the limited evidence from internal UST memos will the Jury see.

Most of the likely juicy stuff has been hidden for public consumption by the Government hiding behind Executive Privilege and National Security Exemptions to Discovery.

Let's hope the Jurors see this:

"Is there any proof that Mr. Bowler, while he was the lead Treasury official responsible for managing the aftermath of the financial crisis, played any role in attempting to weaken or terminate Fannie Mae and Freddie Mac?

Well, yes, Mr. Bowler’s fingerprints appear to be all over the Sweep Agreement (the one that serves to wind down Fan and Fred so that Wall Street REITs can take their place).

In Fairholme’s Annual Report released last week, it cites documents that the US Government classifies as “confidential and privileged.” Each of these documents have Timothy Bowler’s name associated with them and they all relate to the 3rd Addendum or Sweep Agreement (which occurred on August 17, 2012).

Here are the communiqués that Mr. Bowler received (which the US Government does not want to become public):

04/23/2012: Confidential report prepared for Treasury by consultant Moody’s relating to Treasury policy and the GSE’s capital positions.

07/13/2012: E-mail communications among Treasury staff containing predecisional information and analysis related to the PSPA.

07/19/2012: E-mail communication among Treasury staff containing draft predecisional policy information and analysis related to relationship between Treasury and FHFA.

08/01/2012: E-mail communications among Treasury staff containing predecisional information and analysis, including discussion with White House staff, related to future GSE draws.

08/07/2012: Predecisional internal forecast of the GSE profitability and PSPA capacity over time, prepared by Treasury staff for purposes of proposed changes to the PSPAs.

08/17/2012: Treasury initiates the 3rd Amendment to the PSPA – Government seizure of private companies’ (Fannie and Freddie) current and future profits.

08/18/2012: Bulletin News President; Senior White House Staff; Geithner, Timothy. White House News Summary prepared for the President and senior White House staff on a variety of issues, including changes to the PSPAs.

09/16/2012: E-mail communication among Treasury staff containing predecisional information related to the methodology for valuing Treasury’s senior preferred stock in the GSEs.

Fairholme’s conclusion is best and worth repeating here:

“More than just patience, this investment requires persistence. Every major financial institution relied upon federal government assistance during the 2008 crisis. Each institution repaid the Treasury in full, plus interest. The same is true of Fannie and Freddie, yet only they remain under the day-to-day control of a federal agency. Government cannot pick private market winners and losers. We forge ahead with the facts squarely on our side, and the assurance that no one is above the law.”

Nice job, Katie! Anyone have access to this Memo by Timothy Bowler? "ALLOWED: An email from ex-Treasury official Timothy Bowler containing talking points related to the "net worth sweep" decision, including that the companies "will report very strong earnings ... in-excess of the 10% dividend to be paid to Treasury."

Judge Louis Brandeis: "If the broad light of day could be let in upon men’s actions, it would purify them as the sun disinfects."

I'm pretty sure that J. Lamberth was just reading Rule 48 to the Jurors today verbatim as posted by JSmith and that's what I heard today.

Got all giddy, but it was misplaced!

Just like hundreds of BILLIONS of the GSES Earnings were misplaced by the FHFA and UST by the August 17, 2012, Net Worth Swipe!

Thanks JSmith! So just one hold out by the 8 Jurors and assuming they all make it to the final Verdict, then Round 3!

Okay, so if 2 of the 8 Jurors gets sick, is AWOL etc, then the alternate Juror steps in. What happens if its 7-1, Round 3?

Is the "Salt the Earth with the Shareholders Carcasses" Jim Parrot memo coming into evidence?

Okay, thanks for the clarification. Any idea what federal code section Jury Verdicts in Civil trials are in? If you can find the exact federal code citation, that would be great!

According to what Lamberth just said, 6 to WIN! I'm pretty sure that's what he said. That would explain the lengthy Jury Selection process.

3 guys 5 women. Opening Statements tomorrow morning. They are going to tackle some pretrial Evidentiary motions now, outside the ears of the Jurors.

The pews/benches were almost full behind the Plaintiffs attorneys with Shareholders.

8 Jurors selected, 6 to WIN!

COURTHOUSE UPDATE! The Cafeteria CLOSES AT 2PM!

So, do you think that the Judicial Branch should adhere to the Chevron Doctrine, were the Judicial Branch has allowed the Unelected Bureaucrats in DC to interpret vaguely written Congressional Statutes?

Isn't many of these federal agency heads under the direct control of the Executive Branch, where the POTUS can fire them "at will", whenever they don't interpret a Statute the way the POTUS would prefer?

Isn't that what happened in Collins?

From the NFIB Amicus Brief: "Further,
Chevron raises due process and judicial independence
concerns because it “turns over to one party” in the
case, that is, the executive branch and agency being
sued, “the authority to say what the law means.” Id.
at ¶ 35; see also The Federalist No. 10, at 57 (James
Madison) (Easton Press ed., 1979) (“No man is allowed
to be a judge in his own cause.”); Philip Hamburger,
Chevron Bias, 84 Geo. Wash. L. Rev. 1187, 1211 (2016)
(“One of the costs of deference . . . is that it
systematizes biased judgment in violation of the Fifth
Amendment’s guarantee of due process.”)."

V. Chevron has led to agency self-
aggrandizement, legislative indifference,
and judicial passivity.
1. Under Chevron agencies almost always
win—but not necessarily because they
are right.

"The Chevron framework makes it easier for unelected bureaucrats to weaponize federal regulations against the American people."

"In the upcoming high court term, the justices will weigh a case known as Loper Bright Enterprises v. Gina Raimondo, which asks the justices to pare back the 1984 high court Chevron deference, which tells courts to defer to agency's interpretations of statutes when the language written in them is ambiguous or vague."

"The case, slated to be argued in the high court by veteran attorney Paul Clement, asks the justices "Whether the Court should overrule Chevron or at least clarify that statutory silence concerning powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency."

https://www.supremecourt.gov/DocketPDF/22/22-451/272670/20230724095815281_22-451%20tsac%20Buckeye%20Inst%20and%20NFIB%20Final.pdf

From the NFIB Amicus Brief: "More and more often, that
government overreach comes in the form of agency
rules and regulations imposed by unelected
bureaucrats. The result is not just government
overreach but the insulation of important public policy
decisions from political or judicial accountability. This rule by regulatory agencies—particularly when those
agencies’ statutory interpretations are granted
judicial deference on questions of legal
interpretation—is incompatible with representative
democracy and the Constitution’s system of checks
and balances. Forty years of experience with Chevron
has revealed its flaws, and Buckeye will show how
jettisoning that doctrine will return the judiciary to its
proper role in our governmental scheme."

So, do you know for sure if the Parrot and Wallison memo will be seen by the Jurors?

If the JPS and Commons are able to get the Jury to return a verdict in their favor close to or at the Shareholder ask, I think that it would be a positive development, especially since the last dividend paid to Shareholders goes back to the 2Q 08 or 3Q 08.

Predicting the outcome of a Jury trial is not an easy thing to do.

I guess a big question I have is whether or not the Jim Parrot, "Salt the Earth with the Shareholders Carcasses" memo comes into the trial as well as other 'Smoking guns'?

We the Shareholders know what happened here, but the FHFA lawyers (primarily Arnold & Porter?) after years and years of pre-trial litigation have gotten a lot of the most damning evidence excluded from entry into trial deliberations. Not to mention Executive Privilege and National Security Exemptions.

Being a mortgage banking shareholder near the epicenter of the devastating to millions of people, Great Financial Crisis, that allegedly needed a 'bailout' is not my definition a 'sympathetic client'. But as I recall last time, the named Plaintiffs are put on the stand briefly and if you are a Juror, you realize right away, that these hard working Americans are worthy Plaintiffs.

This time we will need to convince a few more Jurors than last time.

You and I combined probably have over a Century of experience living in the DC area, the probability that a majority of the Jurors are (or know someone) employed by the government either directly or indirectly seems high and I would imagine that creates a positive subconscious bias towards the integrity of actions by governmental officials.

Still, at least as Americans we DO have a right to challenge our government officials in Court and to have those challenges decided by our peers and not a federal Judge.

If in fact today was Voir Dire, then I would just guess that either this afternoon J.Lamberth will rule on any pretrial issues that may be outstanding and then bring in the selected Jurors to begin the proceedings, probably tomorrow morning.

Have you ever done Jury Duty?

I'm not sure exactly when these fine folks will find out they are going to spend the next 2+ weeks deciding a contract case involving the Mortgage Banking Industry, but I would imagine a little disappointment from some of the Jurors when they find out.

Last time, BOTH sides did a good job, thanking them throughout the trial for their time and attention to this case.

Don't know how long the trial will last, I thought both parties gave a 3-4 week trial estimate last time, but maybe it was 2 weeks, not sure.

HeeeeHeeee! So, would I have better odds of hitting the Billion Dollar Power Ball Lottery? !

I think today is Voir Dire day (aka pick a Jury Day) and is closed to the public.

Tomorrow morning will probably be the Opening Statements and then the 3-4 week trial begins.

I've got an appointment in the AM tomorrow, but hopefully I will arrive to the courthouse metro station before the lunch break.

This time the number of Jurors will likely be more than 8 and remember what JR Smith said last time is still true - this is a company town and Uncle Suggy signs virtually everyone's paycheck either directly or indirectly (including the presiding Judge).

Question: Aren't all the the Shareholders just a bunch of 'evil mortgage banksters'/'evil hedge fund guys'? HeeeeHeeee !

Pg. 20: "Because of the CFPB’s structure,
accountability and transparency have fallen by the
wayside. “[S]elf-funding … effectively makes the agency
accountable to nobody.” Thomas Arning, The Consumer
Financial Protection Bureau: A Novel Agency Design
with Familiar Issues, 24 FORDHAM J. CORP. & FIN. L.
153, 169 (2018).
So those outside the cloistered community of the
Bureau are kept effectively powerless. “[T]here is
minimal leverage that Congress,” and by extension the

States, “can bring to bear to influence the agency.”

Roberta Romano, Does Agency Structure Affect Agency

Decisionmaking? Implications of the CFPB’s Design for

Administrative Governance, 36 YALE J. ON REG. 273, 299
(2019) (explaining that the CFPB is the most insulated
agency among those with similar regulatory objectives).
The States and the public must depend on voluntary
disclosures and a couple semi-annual reports to learn what
the agency is up to."

"But depending on a self-interested CFPB to do the right thing is a “curious

assumption,” especially when the Bureau has “lack[ed]

transparency in much of its decision-making.” (More on

that below.) Adam C. Smith & Todd Zywicki, Behavior,

Paternalism, and Policy: Evaluating Consumer

Financial Protection, 9 N.Y.U. J.L. & LIBERTY 201, 236-

37 (2015). It’s hardly a surprise, then, that the Court has

already observed how the Bureau’s “financial freedom”
“makes it even more likely that the agency will slip …
from [the control] of the people.” Seila Law LLC v.
CFPB, 140 S. Ct. 2183, 2204 (2020) (cleaned up). It already
has."

"Remember how the Bureau is
led by a single Director who the President may remove
and replace at any time. So unlike a multi-member
commission, the Bureau’s “priorities may fluctuate with
the party of the appointing President,” and Congress has
no means to pull it back. Kruly, supra, at 1742. At the
same time, the only ostensible check on the Bureau’s
budget—other than the soaring cap—is the Director’s finding that the money is “reasonably necessary to carry
out the authorities of the Bureau.” 12 U.S.C. § 5497(a)(1).

That provision provides the Bureau a financial incentive to
expand faster and farther, no matter whether those
efforts aid market improvement or stability. James V.
DeLong, New Wine for A New Bottle: Judicial Review in
the Regulatory State, 72 VA. L. REV. 399, 421 (1986) (“[A]n
agency is subject to strong internal incentives to attempt
to expand its budget.”). Aggressive, inconsistent, and
unaccountable are not words we usually associate with the
quiet prudence of a financial regulator."

http://www.supremecourt.gov/DocketPDF/22/22-448/270624/20230707162906708_FINAL%20CFPB%20Amicus%20Brief.pdf

CFPB case oral arguments October 3rd, 2023...

https://www.scotusblog.com/2023/07/justices-schedule-first-cases-of-the-2023-24-term/

"The CFPB asked the justices to take up the case, warning that the 5th Circuit’s ruling “calls into question virtually every action the CFPB has taken in the 12 years since it was created,” and the justices agreed to do so in February."

Thanks for the response. If you're a big fan of the Nondelegation Doctrine, you may find this very recent scholarly work from Michael S. Greve over at the Scalia Law School interesting. It talks about the current CFPB case and mentions Seila Law and Collins.

https://administrativestate.gmu.edu/paper/delegation-in-context/

That's right. The DOJ claimed that Collins was an example of not applying the MQD and they used it in their briefs recently in the Biden v Nebraska case.

As I recall the MQD was never litigated in the Collins case.

In regards to the CFPB case to be heard this Fall term, did you read the Amicus Brief written by the Scalia School of Law on behalf of the 122 members of Congress filed within the last week?

She differentiated CFPB from FHFA and other federal agencies by making the point that CFPB is not funded by 'user fee's' like FHFA and other agencies and is therefore unique.

Do you think that differentiation on funding mechanism is enough to overcome a Seperation of Powers violation challenge with HERA in the case of the FHFA?

Great article Clarence, thanks for the link!

Lost on the federal government decision makers in the GSE'S case seems to be the realization that by 'bailing out' the GSE'S and providing a ready and willing buyer of the toxic PLS MBS, the federal government was saving hard working middle class families from a further aggravated downturn on the American Families BIGGEST Asset on their balance sheet, their home.

Pg. 466 "...the government, as a matter
of administrative law, has been exploring the outer limits of its permissible
authority in what it views as a time of crisis and, in so doing, conducted the
management of the crisis through the two institutions least constrained by
the law—the Treasury Department and the Federal Reserve."

Clarence (or anyone), as you may be aware, I'm a big fan of the MQD, as articulated recently in Biden v Nebraska and last term in WV v EPA.

I'm just curious about what you're initial, shooting from the hip thoughts were, if the following were in fact true:

1. There's a 6 year Statute of Limitations on Constitutional Challenges to federal agency action.

2. The NWS is determined or alleged to have been ongoing from August 17, 2012 to SM and MC's amendments beginning in 2019 that allowed the corporations to retain capital.

3. The NWS was Unconstitutional agency(s) actions in violation of the MQD and therefore void.