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Full pot of coffee. Tx D1
This could shock US housing market: Bove
http://www.cnbc.com/id/102449798
This could shock US housing market: Bove
http://www.cnbc.com/id/102449798
D.Sims: common stock valuation.
"FederalReserve Act, as the "lender of last resort" in times of distress, the Federal Reserve Bank of New York cannot discriminate and pick "winners and losers".
That seems to be exactly the opposite of what happened when using your example of interest rates on forced lines of credit I might add.
So apparently AIG and FNMA had some enemies in Washington, which we do know is true for FNMA w excessive/strong arm lobbying that took place and keeps getting brought up in oversight hearings.
On the bright side, some damning administrative emails have already been outed that fly in face of that FRA that would show discrimination in practices. Who knows what else bubbles up w sealed discovery but I would assume some pretty great stuff.
Tx for the post Od86. GL
Those are mob deal terms lol
The entire thing sounds like a fictional story but it isn't. It's nice to have a comparison also to help get to the gov mindset when making these hostile takeovers.
Thanks for the light reading :/). Better left to the professionals.
Great article in Forbes comparing the two. http://www.forbes.com/sites/richardepstein/2014/11/26/a-tale-of-two-bailouts-aig-fannie-and-freddie-and-beyond/
AIG paid up so they started our sweep: "The AIG bailout ballooned to $182 billion. The New York- based insurer eventually returned to profitability and repaid the assistance in 2012, leaving the government with a $22.7 billion profit."
Our future. Good insight.
AIG Bailout Judge Not Intimidated by Government, Wall Street Names
By Andrew Zajac and Christie Smythe |
Click For Link
Hank Greenberg’s legal assault on the U.S. government and the terms imposed in its 2008 bailout of American International Group Inc. brought a parade of financial crisis superstars to a Washington courthouse, providing an insider’s account of the struggle to save the U.S. economy.
Ben Bernanke, Henry Paulson and Timothy Geithner each took the witness stand, attesting to the calamity they faced, and how the way they saved what was once the world’s biggest insurer was the best course for the nation.
The former Fed chairman and ex-Treasury secretaries told their stories not to a jury, but to one man: U.S. Court of Federal Claims Judge Thomas Wheeler. During the two-month trial, the 66-year-old, white-haired ex-government contract lawyer often decided against the U.S., while ruling for Greenberg and his Starr International Co., once AIG’s biggest shareholder.
In consideration for an $85 billion loan from the Federal Reserve Bank of New York, the insurer had to agree to a 14 percent interest rate and a demand for an 80 percent government equity stake, arrangements that cost shareholders as much as $40 billion, Greenberg claimed. Led by attorney David Boies, Starr’s lawyers argued AIG investors deserve that money back.
The presentation of testimony in the case ended last week. Once considered a long-shot, Wheeler’s rulings in favor of Boies, the lawyer’s success in eliciting damaging testimony and the judge’s impatience with the tactics of government lawyers have made a victory for Greenberg and Starr seem plausible.
Wheeler, who sang in his church choir and coached softball, is seen by those who know him as unfazed by the heavyweights who were called as witnesses during the AIG trial.
“Those are big names. That’s not going to intimidate Tom,” said Carl Vacketta, a former law firm colleague who said he taught Wheeler when he was a student at Georgetown University Law Center. “He’s smart and adept,” Vacketta said. “He’s not going to be bothered by anybody from Wall Street.”
Credit-Default Swaps
The government in 2008 sought to save AIG before it was brought down by billions of dollars of credit-default swaps, fearing its collapse from bad mortgage bets would ripple outward from a firm that insured thousands of municipalities, retirement plans and companies, and was a counterparty to some of the biggest banks.
“AIG exploited a huge gap in the regulatory system” and its Financial Products unit operated without oversight as it made derivative bets on subprime loans, Bernanke told lawmakers in 2009. “This was a hedge fund basically that was attached to a large and stable insurance company.”
$182 Billion
The AIG bailout ballooned to $182 billion. The New York- based insurer eventually returned to profitability and repaid the assistance in 2012, leaving the government with a $22.7 billion profit.
In the trial, the U.S. argued that it had authority to demand equity, and that the bailout was voluntarily agreed to by AIG’s board as a preferable alternative to bankruptcy.
Boies, 73, has used government correspondence to argue that, instead of being a hedge against risk as U.S. lawyers argued, the stiff costs of the loan were an attempt to make money.
Much of the case has focused on Starr’s allegations that the government coerced AIG’s board into accepting the bailout, and exercised control of the company at key moments afterward.
Those elements are crucial to Starr’s claim the government took shareholders’ property without just compensation, in violation of the U.S. Constitution.
Defining Feature
Wheeler, who declined to be interviewed for this article, repeatedly expanded the range of government documents available to Starr. The judge’s insistence on compiling an expansive record was one of the trial’s defining feature.
He was disinclined to allow the government to use redacted documents, and frequently overruled objections to the introduction of evidence, promising to apply “my reliability yardstick” when evaluating the merits of disputed material.
The judge made at least three rulings that worked to Starr’s advantage, including a pair that increased access to government documents and another that barred the U.S. from calling three lawyers for AIG as witnesses.
Perhaps the most significant decision by Wheeler came Nov. 5, when he ruled that because of the way the government questioned an outside attorney for the New York Fed, it waived attorney-client privilege, opening the door for Starr to access 30,000 additional documents.
“I don’t want there to be any loopholes here,” Wheeler said.
Government Rebuked
Wheeler rebuked government attorneys for attempting to rely on hearsay, introducing exhibits in violation of rules about redactions and dragging out proceedings by reading lengthy passages from documents into the record.
At times, Wheeler gave Boies, who represented the government in the 1999 Microsoft Corp. antitrust trial and former U.S. Vice President Al Gore in the 2000 presidential recount, a wide berth.
He kept silent as Boies chastised government witness Marshall Huebner of Davis Polk & Wardwell LLP, who served as outside counsel to the New York Fed, for what he deemed insufficiently responsive answers.
“One of the differences between being a lawyer and being a witness is as a witness you’re supposed to answer my questions” while as a lawyer, “you get to make arguments,” Boies told Huebner Nov. 5. “But I would ask you to listen to my questions, as opposed to make the points that you want to make.”
Spring Verdict
Wheeler gave both sides until next week to finish submitting evidence, including material from the trove he forced the government and others to produce. He set a Feb. 9 deadline for both sides to file conclusions of law, with closing arguments to follow as soon as March.
He set no page limit on the post-trial filing, in keeping with his preference for a broad record.
“He really wants to understand the facts and the circumstances and anything that’s germane to make sure it’s on the record and can be taken into account,” said Fernand Lavallee, a lawyer at Jones Day who worked with Wheeler at DLA Piper LLP. “That was how he practiced as a government contracts litigator.”
Daughter-in-Law
In the early stages of the litigation, Wheeler told lawyers for both sides that his daughter-in-law worked for AIG as a paralegal and asked for their views on his participation.
The judge said that, after checking with the court’s ethics adviser, “I don’t think this circumstance creates any cause for recusal whatever, so I’m anxious to remain on the case and be of service to you all.”
Starr and the government didn’t object.
The disclosure followed the best practice of “putting your cards face-up on the table,” said Charles Geyh, a professor at the Indiana University Maurer School of Law. “It tells the lawyers, ‘speak now or forever hold your peace.’”
Wheeler didn’t explain his acquaintance with an expert witness who appeared on behalf of Starr, telling economist Michael Cragg, “I believe I remember you from a prior case.”
Cragg, the judge wrote in a previous opinion, “was the single most helpful expert” in a tax case in which Wheeler rejected BB&T Corp.’s bid to recover more than $688 million in taxes and penalties for a disallowed tax shelter.
In the Starr trial, Cragg testified the government lacked a strong economic rationale for the stringent terms of the AIG bailout, abused its power and treated the insurer “as a political scapegoat” for the financial crisis.
No Obligation
Wheeler had no obligation to disclose anything about Cragg’s earlier appearance, since it was already in the public record, Geyh said.
“In this small legal universe, there is a recycling of these experts,” he said.
Nicole Navas, a spokeswoman for the Justice Department, declined to comment on Cragg’s testimony. Robert Dwyer, one of Starr’s attorneys, said the decision to have Cragg appear as an expert witness was made before the BB&T ruling, but agreed that his standing with Wheeler was an unexpected bonus.
Contract Claims
Wheeler was appointed in 2005 to a 15-year-term on the U.S. Court of Federal Claims by Republican President George W. Bush. The court primarily hears financial or contract claims against the federal government. For more than 30 years before his appointment, Wheeler worked in private practice, specializing in government contract issues.
After receiving his undergraduate degree from Gettysburg College in Pennsylvania and a law degree from Georgetown, he worked at law firm Pettit & Martin and then Piper & Marbury, which through mergers eventually became DLA Piper.
Lavallee recalled hearing Wheeler’s wife, Janet, talking about taking him to choir practice.
Wheeler “kind of had that sheepish, humble look on his face, and he says, ‘Yeah, I really enjoy the church choir,’” Lavallee said.
A friend of the couple, Sheila Stark-Bailey, a senior counsel at AECOM Technology Corp., said Wheeler was “an absolutely fantastic mentor” at DLA Piper.
The Wheelers like to tailgate at Penn State University football games, and the judge is sometimes called “Judge Coach” by former law firm colleagues who remember his stint on the office softball team, said Stark-Bailey.
Wheeler used their shared interest in the game to lend a humorous, personal touch when he presided at her wedding in 2007, Stark-Bailey said.
“He was always criticizing how I handled the fielder’s choice,” she said.
TRUTH
Conservatorship - turn trillion dollar companies making billions in profit into economic collapse liabilities. Well done U.S govt. Well done. While your at it...... you should let them trade on a corrupt OTC market. Hey, why not.
Very proud.
I think another group took a position today. Jmo
Thank you B.Ack
Awesome D1, Thank you. I'm hoping these become a regular occurrence now. Inquiring minds want to know
CNBC is starting to do a pretty good job getting this stuff out there. I haven't seen much from above lately at all, tx SP, good find.
New Maloni blog today- http://malonigse.blogspot.com
NEW Maloni Blog today- http://malonigse.blogspot.com
No confusing that position.... Basically saying "I support failed legislation and will continue to support future failed legislation"
Good luck w that Stivers
There you have it. Lol
No problem. GL today
Barons-KBRA: Recent Fannie, Freddie Court Decisions Good For Bondholders. http://blogs.barrons.com/incomeinvesting/2015/02/19/recent-fannie-freddie-court-decisions-good-for-bondholders-kbra/
2/22/15 TH717: Christopher Whalen Triumphantly Declares “Rule Of Law Is Dead”. http://timhoward717.com/2015/02/22/closet-socialist-christopher-whalen-triumphantly-declares-rule-of-law-is-dead/
Fannie Mae: The Third Amendment Sweep Is Endangering The Taxpayer http://www.valuewalk.com/2015/02/fannie-mae-3rd-amendment-sweep/
Where is the message/PM block/unblock feature when using IHUB app?
Anyone know off the top of their head, I cannot find it.
Lol, you'll beat him. I have no doubt. Always have D1
Every conference probably just sheds more light on the situation and gains new interest in FNMA. I wish there was a new one every week! The whole thing is so absurd we just need people to hear about it.
The rest will take care of itself in court.
An expert on the financial crisis also and may have been interested in what Bill Ackman had to say.
"After completing his education, Dalio worked on the floor of the New York Stock Exchange and invested in commodity futures.[8] He later worked as the Director of Commodities at Dominick & Dominick LLC.[9] In 1974, he became a futures trader and broker at Shearson Hayden Stone.[8] In 1975, he founded the Westport, Connecticut based investment management firm, Bridgewater Associates which in 2012 became the largest hedge fund in the world, as it is today with over $160 billion in assets under management, as of October 2014.[8]
In 2007, Ray Dalio predicted the global financial crisis,[10] and in 2008 published an essay, "How the Economic Machine Works; A Template for Understanding What is Happening Now",[11] which explained his model for the economic crisis. He self-published a 123 page volume called Principles, in 2011, which outlined his logic and personal philosophy for investments and corporate management based on a lifetime of observation, analysis and practical application through his hedge fund.[12][13][14] In 2013 Dalio began sharing his "investment secrets" and economic theories on YouTube via a 30 minute animated video which he narrates, called How The Economic Machine Works; the video has since been viewed over one million times.[15]"
This guy is HUGE. http://en.m.wikipedia.org/wiki/Ray_Dalio
Ray Dalio (born August 1, 1949) is an American businessman and founder of the investment firm Bridgewater Associates.[1] In 2012, Dalio appeared on the annual Time 100 list of the 100 most influential people in the world.[2] In 2011 and 2012 he was listed by Bloomberg Markets as one of the 50 Most Influential people. Institutional Investor’s Alpha ranked him No. 2 on their 2012 Rich List.[3][4] According to Forbes, he is the 30th richest person in America and the 69th richest person in the world with a net worth of $15.2 billion as of October 2014.[5][6]
2/12/15 - http://www.theharbor.org/hic
We started going up immediately aft this conference. I think this was put on by the largest hedge fund manager in the world but don't quote me on that.
Registration and Lunch 12:00 p.m.
Conference 1:00 p.m. – 5:30 p.m.
Networking reception to follow---------------------- key IMO.
2015 Conference Vice Chair
Barry S. Friedberg
President & Co-Founder, FriedbergMilstein
2015 Conference Speakers
William A. Ackman
Founder & CEO, Pershing Square Capital Management, L.P.
Ray Dalio
Founder, Chairman & Co-Chief Investment Officer, Bridgewater Associates
Stephen J. Errico
Managing Partner, Locust Wood Capital Advisers, LLC
Martin E. Franklin
Founder and Executive Chairman, Jarden Corporation
Joshua Kaufman
Managing Member, Brenner West Capital Partners
Larry Robbins
Founder, Portfolio Manager, CEO, Glenview Capital Management
Todd Sullivan
Founder and Managing Member, Rand Strategic Partners
Ronald A. Weibye
Managing Partner and Chief Investment Officer, Aperio Capital Management, LLC
SPEAKERS FROM PAST CONFERENCES
Convenient Location
AXA Equitable Center
787 Seventh Avenue
Between 51st and 52nd Streets
New York, NY 10019
He is a man of conviction and philosophy, I admire him for that.
Last FCOC transcript courtesy G.Bradford
http://www.glenbradford.com/2015/02/fnma-court-transcription-from-last-session/
Last FCOC transcript courtesy G.Bradford
http://www.glenbradford.com/2015/02/fnma-court-transcription-from-last-session/
Lol, the checks in the mail......
Sounds familiar: The government maneuvered to deprive Starr and other then-shareholders of an opportunity to vote on the credit agreement, the issuance of equity and other elements of the bailout.
“Many financial institutions engaged in much riskier and more culpable conduct than AIG” yet received government assistance “without the punitive equity confiscation required of AIG.”
Back when politicians stood up for the citizenship.
What will it take to get King obama to take notice?
1764, the Massachusetts politician James Otis, Jr., said that,
When the parliament shall think fit to allow the colonists a representation in the house of commons, the equity of their taxing the colonies, will be as clear as their power is at present of doing it without, if they please...But if it was thought hard that charter privileges should be taken away by act of parliament, is it not much harder to be in part, or in whole, disfranchised of rights, that have been always thought inherent to a British subject, namely, to be free from all taxes, but what he consents to in person, or by his representative? This right, if it could be traced no higher than Magna Charta, is part of the common law, part of a British subjects birthright, and as inherent and perpetual, as the duty of allegiance; both which have been brought to these colonies, and have been hitherto held sacred and inviolable, and I hope and trust ever will. It is humbly conceived, that the British colonists (except only the conquered, if any) are, by Magna Charta, as well entitled to have a voice in their taxes, as the subjects within the realm. Are we not as really deprived of that right, by the parliament assessing us before we are represented in the house of commons, as if the King should do it by his prerogative? Can it be said with any colour of truth or justice, that we are represented in parliament?
—James Otis, Rights of British Colonies Asserted[43]
DSims-tumblr-archived video/info
http://simsonfinance.tumblr.com/archive
DSims-tumblr-archived video/info
http://simsonfinance.tumblr.com/archive