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“The greater the obstacle, the more glory in overcoming it.” – Molière
No question that the GSES will have any damages awarded in the Lamberth trial taken from their balance sheets (after all appeals exhausted?).
My question family, is WHO IS PAYING THE MONTHLY LEGAL TAB FOR THE FHFA TO HIRE ARNOLD AND PORTER (A BLUE CHIP LAW FIRM)?
Wouldn't it simply be EXTRACTED FROM THE ANNUAL EXPROPRIATION FROM THE GSES BALANCE SHEET AS PART OF THE OPERATING EXPENSES STATUTORILY MANDATED BY HERA?
How would that make you feel, if true?
I'm just grateful that the 'evil hedge fund guys'/'evil mortgage banksters' are continuing to pour in the tens of millions (total shareholders litigation costs are surely north of $100m!) in Litigation Expenses necessary to reign in this horrific and coercive abuse of federal government agency overreach!
Won't you hold hands with me and pray on Thanksgiving around our great bountiful meal and give thanks for the 'evil hedge fund guys'/'evil mortgage banksters'? ! HeeeHeee!
NOW GET OUT THERE AND VOTE SKEPI !
Yesterday the SCOTUS heard oral arguments on 2 cases that could make it easier for the citizens and businesses to challenge federal government agency overreach. From todays NYT: "The justices appeared ready to rule that people and companies need not wait for administrative rulings to press constitutional claims in federal court.
WASHINGTON -- The Supreme Court, which has in recent years become increasingly skeptical of the power of administrative agencies, seemed ready on Monday to make it easier to challenge their structure and authority.
The court heard separate arguments in two cases, one involving the Federal Trade Commission and the other the Securities and Exchange Commission. The question in both was where and when constitutional objections to agency power may be pursued.
A majority of the justices seemed prepared to say that people and companies subject to agencies' enforcement actions should not have to wait until administrative proceedings are completed before they can raise at least some constitutional objections to the agencies' structures in federal trial courts.
"What sense does it make for a claim that goes to the very structure of the agency having to go through the administrative process?" Judge Samuel A. Alito Jr. asked."
Freddie Mac 3Q22 10q: "The Plaintiffs have asserted losses based on the decline in
value of Freddie Mac’s common and junior preferred stock from August 16 to August 17, 2012. During the trial, the Plaintiffs requested that the jury award $832 million
plus pre-judgment interest as damages against Freddie Mac. The trial ran from October 17, 2022 through November 1, 2022, after which the jury began deliberations.
The jury was not able to reach a unanimous verdict and on November 7, 2022 the judge declared a mistrial. We expect the court to set a new trial date. At this time, we
do not believe the likelihood of loss is probable; therefore, we have not established an accrual in connection with these lawsuits. However, it is reasonably possible that
the Plaintiffs could prevail in this matter and, if so, we may incur a loss up to $832 million plus pre-judgment interest as discussed above."
Also: "At present, it is not possible for us to predict the probable outcome of the lawsuits discussed above in the U.S. District Courts and the U.S. Court of Federal Claims
(including the resolution of any appeals) or any potential effect on our business, financial condition, liquidity, or results of operations. In addition, we are unable to
reasonably estimate the possible loss or range of possible loss in the matters pending in the U.S. Court of Federal Claims due to a number of factors, including the
inherent uncertainty of litigation."
3q22 Fannie Mae 10q: "The jury in this trial was not able to reach a verdict and the judge declared a mistrial on November 7, 2022. We expect
the court to set a new trial date. In the trial, plaintiffs requested $779 million in damages from Fannie Mae and
prejudgment interest on the amount of any damages. We estimate that prejudgment interest, if awarded, would be
calculated at a rate of 5.75% and expect plaintiffs to seek such interest from August 17, 2012. Prejudgment interest
calculated from August 17, 2012 through September 30, 2022 based on the amount of damages plaintiffs requested
would be approximately $450 million. The ultimate amount of prejudgment interest awarded, if any, would be impacted
by the amount of damages awarded, the date from and through which interest is calculated, and other determinations
by the court. At this time, we do not believe the likelihood of loss is probable; therefore, we have not established an
accrual in connection with these lawsuits. However, it is reasonably possible that the plaintiffs could ultimately prevail in
this matter and, if so, we may incur a loss up to the amount of damages discussed above and any related interest."
I thought the FHFA'S budget was paid for by annual or semiannual payments from the GSES balance sheets, isn't that right?
Why wouldn't the FHFA'S legal fees be included in that HERA mandated statutory payment?
So whose paying Arnold and Porter's legal fees and costs for defending the Net Worth Swipe on behalf of the 3 Defendants, Freddie Mac, Fannie Mae and the FHFA?
The D's had AT LEAST 8 Attorneys plus some of their support staff attending each day of the 3 week trial.
Will todays 10q for the 3Q22, mention the material risk associated with the Lamberth trial and how much will the corporations reserve or set aside in legal reserves?
Well, I'm sure each side is figuring that out now, lots of strategy, ideas, and consultations.
As I recall, Lamberth nixed the Jury Panel Questionaire that was to be given prior to Voir Dire, perhaps this time he will allow it.
HH: "The fight for justice will continue, and we are confident that we will prevail in the next trial," he said.
Counsel for the FHFA declined to comment Monday.
Not only did the NWS break our implicit contract between the Corporations and the Shareholders, it Nationalized these two blue chip firms.
What did you think of the 3 Judge Appealate Panel Decision in the Takings Case?
The accounting and finance issues at the heart of this case, while seemingly simple (the NWS in perpetuity has destroyed our economic rights as shareholders) has confounded Judges and Jurors and these triers of fact have continued to lean towards their inherent bias for the government.
Thanks I appreciate that, but my Twitter account is run by a third party vendor that manages it for me on behalf of one of my businesses.
I also appreciate you taking the time with posting court documents here, that you or someone with a PACER account has shared.
The fact that our implied contract between the Corporations and the Shareholders was breached with the NWS seems like a no brainer.
I really don't know what all the implications of a Mistrial are for P Shareholders, but HH and his team know and I'm sure that they will figure all of that out.
Thank you and I look forward to it!
Thanks for letting me know. It could end up being ruled a Mistrial sometime next week. I think Nats made a good point this morning that, "it's hard to get a win in a company town against the company"....
We'll find out shortly.....
It was funny when people would say, "Oh, I like their chocolates!" or some other reference to Candy. (This was back between 1988-93).
When they really wanted to know, I drew the diagram with the Mortgage Borrower -----> Bank ----------> Fannie Mae ----------> MBS Investor
Then show what happens when people make their mortgage payment.
Hilarious !
Worked my arse off for 5 years for the company and had stock as well, shame that the federal government overreach here has Nationalized them!
Well, I think Dr. Mason testified as a Witness on the Damages section and HH showed them in closing how to fill out the answers to Questions 1 and 2.
You could be right as we are just speculating about what it is they are discussing.
Did the latest 2 Juror Notes say whether or not they were deadlocked 4/4?
Well, think about it, these 8 people were living their lives in ignorant bliss of the horrific federal government overreach here in their own backyard, when suddenly they had to learn about MBS, credit yield spreads, the NWS, and accounting and finance experts testify for 2 weeks and 2 days!
When I worked at Fannie Mae and people asked me where I worked, HALF OF THEM THOUGHT I WORKED FOR A CANDY COMPANY!
Sounds like they are really deliberating though because I think they've asked for more easel board paper 2x now.
Nats, I believe when I sat in on one of the court hearings both parties agreed to eliminate the nominal damages section of the final Jury Instructions, although I have not seen the final Instruction myself.
Given the Jury Split, it may be academic at this point.
I think it's 2 sets of questions the jury sent to the Judge today and the final order from Judge Lamberth saying basically "you're on your own" without the trial transcripts and no witnesses deposition testimony printouts.
I think they also requested some stuff like more easel board paper, water, and some type of temperature control that apparently the GSA (government services administration) hasn't fixed yet.
It's seems like the Jury is still split 50/50 after deliberating Tuesday, Wednesday, Thursday, and now Friday. Maybe this weekend will allow them time to reflect and by Tuesday they will all agree or maybe not.
I would imagine one or two more 50/50 Jury notes to the Judge might motivate J. Lamberth to seriously consider a Motion for a Mistrial if either party asks.
Thank you! Looks like each group is pretty entrenched. I would imagine after a while next week, Lamberth will seriously consider approving a Mistrial.
Lamberth said no to Jury request for trial transcript and written deposition testimony.
Latest requests from Jurors:. (1) they want written deposition testimony (d objects; p wants it submitted I believe) (2) P's explain to J. Lamberth that the note sent by the Jury this morning at 11am says that they are still deadlocked and HH said the P's will likely ask for a Mistrial shortly again in the not too distant future as it's not beneficial to have one group or camp try to force another group that's not budging.
No problem, I just went upstairs about an hour ago and Katie said they are still deliberating! Had lunch with a view of the Capitol building, nice sunny day in DC as well.
Seems to me at least these 8 folks are taking their oath as Jurors seriously and remember we know what happened here but I'm pretty sure none of the Jurors were even aware of the NWS until this case.
I highly suspect that the higher-ups around the POTUS used the expiration of the UST Commitment on 12/31/12 AS A STICK to try to force DeMarco to forgive the principal on millions of low and moderate income American Families mortgages securitized in Fannie Mae and Freddie Mac MBS and in their portfolios, prodding him to choose between something as draconian as the NWS OR MORTGAGE PRINCIPAL REDUCTION.
Equate the recent $10,000 to $20,000 student loan forgiveness to something similar concocted by the POTUS in 2012.
When DeMarco after extensively studying the Mortgage Loan Forgiveness or Principal Reduction program said NO, the administration via UST proposed the NWS and DeMarco said okay due to idealogical beliefs.
These high level intra governmental internal discussions were protected as 'Executive Privilege and National Security' exemptions to Discovery for the P's.
We may never know exactly what happened until well past our lifetimes, but it's a plausible explanation in my view.
The enriching the 'evil hedge fund guys' narrative coming out of the POTUS administration in 2012 would have been consistent with this theme as cover or justification for the Mortgage Principal Reduction program.
The NWS was BOTH Arbitrary and Unreasonable because the PIK option was always available if the FHFA Director was so concerned about the UST Commitment, no analysis at ALL was taken by the FHFA Director, the purpose of the NWS was to 'wind down' and replace the GSES instead of REHABILITATE the GSES as required by HERA, and the FHFA and UST had plenty of notice that the US housing market was on an upward trend.
We'll know after the Jury continues its examination of the facts presented whether or not they reach the same conclusion.
You should have come to the trial, but during the trial, HH and his team with the assistance of some of the most esteemed accounting and finance expert W's, reiterated all those themes throughout the 2 week 2 day trial.
D's weren't asleep at the wheel and hammered away and focused on the losses from 2008-11 (most as a result of the write downs of the $100B+ DTA'S and over exaggerated credit loss reserves when FHFA wore its regulator hat), the 2q12 10q, and tried to sell the Jury with the idea that the NWS was somehow a viable option that the P's should have seen coming.
I think the educating of the Jurors by P's was a great strategy as the truth is on our side. We'll find out shortly if the Jury became educated enough to overcome any inherent leaning they may have had for the D's. Remember, I'm pretty sure all the Jurors had never been aware at all about the NWS prior to being called for Jury duty.
Family, HH in closing put up a slide SEVERAL TIMES in Closing to hammer home the point that you must find for P IF THE NWS WAS ARBITRARY OR UNREASONABLE. He then demonstrated HOW THE NWS WAS BOTH OVER AND OVER AGAIN, SPENDING CLOSE TO 30 TO 40 MINUTES ON THIS underlying theme of P's case.
I thought HH was a very effective communicator, let's see if the message got through to the Jurors, it sounds like the Jurors are really taking their oath seriously.
That's exactly right as I recall. You know even in the current trial, you could see David Stern getting all pumped up peppering his closing argument with phrases like, "The companies HAD MORE THAN $191 BILLION IN LOSSES!"
Of course David never mentioned the exaggerated Credit Loss Reserves that the FHFA forced on the GSES and DTA'S being reversed subsequent to the 2013 $100B + in cash sweeps to the UST during closing.
Judge Lamberth approved Arnold and Porter's pretrial Motion to ban the use of the term, "Death Spiral". I would imagine that A&P argued that the prejudicial value of the term outweighs its probative value, but haven't read it nor the written ruling from Lamberth if any.
Any idea if the GSES are bankrolling the legal bills of Arnold & Porter, the FHFA'S legal fees or is DOJ funding it?
Seems to bypass the power of the US Congress to control the purse strings of a federal agency that makes Major National Economic Decisions.
Any potential Constitutional Issues?
I wonder if that information is attainable from a FOIA request?
Hell we can't even get a list of the other shareholders.
The D's sanitized the Death Spiral by filing a motion pretrial to prevent P's from saying Death Spiral and instead it was referred throughout the trial as "the circular draw problem".
BTW, Arnold and Porter (FHFA's attorneys) are likely not doing the case pro Bono. Does anyone know if Arnold and Porter are submitting their attorney fees and costs to the FHFA, whom then EXTRACTS THE MONEY FROM THE GSES BALANCE SHEET?
Hamish and the legal team and Expert Witnesses did a very thorough job during the 2 week 2 day trial showing the Jurors exactly why an injustice occurred here for the Shareholders. But these Jurors probably have never even heard of the Net Worth Sweep nor really even understand how the MBS market works prior to being selected as Jurors.
Of course, the D's played their hand the best they knew how by focusing on the 2008-2011 time frame and how the federal government came in and "saved the world".
With the proliferation of government workers and government related work and family connections with those folks, the Jurors may have been leaning from the beginning to look for any way to justify the horrific federal government overreach that has occurred here.
We'll know in a little while if the Jury is hung and a Mistrial is declared or whether one 1/2 of the Jurors can convince the other 1/2 with the evidence that they have available.
I'm not sure exactly what the Jury wanted specifically, but D wanted to just send in the table only and P objected and wanted to send in the first page or two before the table to add context.
In theory, the attorneys for each side may have surmised that the pro D camp of Jurors is trying to convince the Pro P camp that P couldn't have expected the FHFA and the GSES to maximize shareholders profits and therefore why are the P's complaining?
Pure speculation on my part, but maybe the Pro P's camp will counter with something like, "the NWS does the opposite of preserve and conserve" and you need to see things my way.
Today, Judge Lamberth sent the Jurors back to deliberate despite their admission that they were deadlocked. After one or two more, "we're hopelessly deadlocked, Judge", the Judge may grant any agreed motions for a Mistrial.
Well I think they specifically wanted a table referencing the goals and responsibilities of the FHFA to the shareholders before and after the CONservatorship. There was some objections from P's that the request should include the page or two before the table but Lamberth overruled P's objections, I believe.
But it seems that the Jurors are deliberating and I would imagine that one side of the group is trying to convince the other side.
.
Judge says no, plus Jurors have some questions about temperature, they need post it notes, plus they are requesting a specific document.DX 136 PG 27 of 500 and another DX document.