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"Fannie and Freddie have been under government control since 2008, a situation that could endure during the Biden administration. The companies’ common shares have fallen by more than half this year, indicating shareholders are pessimistic the firms will be released anytime soon."
https://finance.yahoo.com/news/biden-taps-sandra-thompson-lead-150000969.html
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1
POTUS nominated, Senate confirmed, but now if the FHFA Director doesn't comply with the POTUS, she can be fired at will: BROWN STATEMENT ON THE SELECTION OF SANDRA THOMPSON TO LEAD FHFA
WASHINGTON, D.C. – Today, U.S. Sen. Sherrod Brown (D-OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, released the following statement after President Biden announced the nomination of Ms. Sandra Thompson to lead the Federal Housing Finance Agency (FHFA). If confirmed, Thompson would be the first African American woman to serve as Director of FHFA.
“I commend the Biden Administration for nominating Sandra Thompson to lead FHFA,” said Brown. “She has a distinguished career as a regulator and supervisor, first of our nation’s banks, and more recently of the GSEs. While leading the Federal Housing Finance Agency as Acting Director, Ms. Thompson has refocused regulation of the GSEs on ensuring that they fulfill their mission to provide safe, sustainable access to housing across the country. I look forward to holding her nomination hearing soon and encourage my colleagues to support her nomination.”
Brown recently praised FHFA Acting Director Sandra Thompson for actions the agency took to lower refinancing costs for homeowners.
"President Joe Biden has nominated the Federal Housing Finance Agency’s acting director, Sandra Thompson, to become its permanent director.
Thompson has been doing the job on a temporary basis since June, after Biden removed the former Trump-appointed FHFA director, Mark Calabria.
While the housing finance industry had a prickly relationship with Calabria, it has welcomed Thompson, a veteran regulator. Affordable housing advocates, too, have praised her efforts to tackle the racial homeownership gap.
Early on in her tenure leading the FHFA, Thompson made it clear she would prioritize both stability and sustainable lending practices, as well as expanding credit to underserved communities.
“As a longtime regulator, I am committed to making sure our nation’s housing finance systems and our regulated entities operate in a safe and sound manner,” Thompson said in June, when she was appointed acting director. “We can accomplish this, and at the same time have a laser focus on mission and community investment. There is a widespread lack of affordable housing and access to credit, especially in communities of color.”
https://www.housingwire.com/articles/biden-nominates-thompson-to-be-permanent-fhfa-director/
Is Sandra a mere tool for the MBA and the primary mortgage market? One way or another it's likely to be less emphasis from her and the current administration on exiting conservatorship and more on gse subsidized loans to right the perceived wrongs of social inequality and to subsidize affordable housing. Let's hope she does it in a risk prudent way without caving to the calls for public subsidizes and the depletion of the gses already inadequately capitalized balance sheets.
Can you think of any reason why the federal government would NOT want a federal judge to find that a total Taking has occurred? I can think of $7.2 TRILLION REASONS.
Suppose it's a partial or temporary taking, wouldn't the court follow the same damage calculations as the SCOTUS instructed on remand last term in Cedar Point Nursery?
https://pacificlegal.org/case/cedar-point-nursery-v-gould/
It appears that what we have seen from Sandra so far is the current administrations emphasis on helping borrowers and renters hit hard by cov and the 2022 Scorecard emphasizes social equality. They are probably thinking of doing something but will likely act in doing anything big post BBB legislation resolution and/or maybe after more clarity from the courts.
I think you should, you know quite abit about them and they need all kinds of people to do all types of things. It would be great if they went back to being private again, although they will continue being highly regulated and subjected to the whims of the latest political winds of the capitol.
Well, I worked there a long time ago, from 87 to 92. The stock compensation was sweet! Each year, each employee received 3% of their salary deposited into their Employee Stock Ownership Program account. PLUS, EVERY YEAR, each employee could purchase up to 300 shares of stock at a 15% discount from a predetermined date 1 year prior and the company would sell the 300 shares for you if you wanted and give you the money. One year it was so good (Peter Lynch was scooping up the shares for the his Fund I think and Tim Howard and Tom Lawler just started the portfolio holdings) some employees were buying cars with it.
They had Bloomberg terminals all over the place so the employees would check out the latest price if they wanted.
Having been Nationalized by the gubmint for the last 13 years and going you can rest assured that ANY profits you contribute by working hard for the company won't go into your pocket, but will help the gubmint buy guns and butter! Isn't that great, Comrade!
They should like the fact that you are a shareholder, do you think that it is necessary to disclose it?
I use to work at 4000 Wisconsin Ave. They sold 3900 to a developer (Mel Watt relocated HQ to SW DC-you think we will ever see a penny from the gain in the sale of that valuable real estate?) and there is a retail/residential development there now.
Did our dear multi millionaire leader, NOT PAY HIS FAIR SHARE OF TAXES?: (todays WP): "In other words, about 2 percent of the S corporation income in 2017 and about 13 percent in 2018 was listed as wages. That caught the attention of tax specialists.
The Wall Street Journal quoted Steven Rosenthal, a senior fellow at the Tax Policy Center, as saying that to the extent that the Bidens' income came directly from the couple's consulting and public speaking, "to treat those as other than compensation is pretty aggressive."
Rosenthal told The Fact Checker that he stood by that assessment. "I believe Biden routed his income through an S corporation to avoid some 3.8% Medicare tax/net investment income tax," he said. He noted that Biden's 2019 income tax return allocated a much larger percentage of his S corporation income to earnings that would be subject to the tax. (That year, almost 60 percent of S corporation income was listed as wages, significantly higher than in the two previous years.)"
"Robert Willens, a Columbia Business School professor who's been educating The Fact Checker about intricate tax policy issues since the 1980s, said: "In light of the fact that 'capital' was not a material income-producing factor in connection with his business; and that his personal efforts produced the vast majority of the income the business reported, it would seem to me that his 'reasonable compensation,' in this case, could easily be at least 10 times the amount he reported as such."
Under a rough calculation, that would have increased the level of the Bidens' "reasonable compensation" estimate to about $7.5 million in 2017 and 2018, resulting in about $280,000 in additional taxes. That's much less than $500,000 but still a hefty amount."
The current administration may be in a holding pattern for the moment because they are not sure whether or not they will have access to the $150B in housing funds via BBB.
If they get the money, it seems HUD would be the agency vehicle to help housing. If they get zero money they may think about monetizing the gse "investment".
But wouldn't monetizing the ust "investment" be virtually impossible given the uncertainty surrounding the Takings Clause claims? Can a federal agency under the control of the Executive Branch of government decide how to spend federal money outside of Congressional appropriations, shouldn't the money go into the US Treasury general fund instead?
The battle over giving the POTUS direct control over a banking federal agency continues, unlike FHFA, FDIC has a board as the decision makers:
https://www.politico.com/news/2021/12/10/trump-bank-regulator-uprising-democrats-524115
Biden, Warren back uprising against Trump bank regulator
The partisan battle erupted after the Democrats who make up the majority of the FDIC’s board voted to take public feedback on potential changes to the agency’s bank merger approval process.
The White House on Friday defended three Democratic board members at the Federal Deposit Insurance Corp. who moved to wrest control away from the banking agency's Republican chairman — a maneuver GOP lawmakers blasted as a “coup.”
The partisan battle erupted after the Democrats who make up the majority of the FDIC’s board voted to take public feedback on potential changes to the agency’s bank merger approval process. FDIC Chairman Jelena McWilliams, an appointee of former President Donald Trump, did not participate in the vote, and the FDIC in an official statement said the action was not valid.
The White House’s decision to back the three Democratic regulators will likely further inflame tensions with Republicans on Capitol Hill, who argue the end run around McWilliams violated the agency’s rules.
“The attempt by Rohit Chopra and his enablers to overthrow FDIC Director Jelena McWilliams is a direct threat to the independence of the FDIC, undoing 88 years of institutional norms,” Sen. Thom Tillis (R-N.C.) said on Twitter on Thursday night.
"The proposed measure, sponsored by a bipartisan group of Southern California mayors and neighborhood associations, would give cities and counties the power to override state law and prevent the Legislature and local government from passing laws that invalidate zoning initiatives approved by voters."
https://www.nbcnews.com/news/amp/rcna7658
"The nonpartisan Public Policy Institute of California said in a recent report that the state's population grew by more than three times the number of housing units that were built over the last decade. California would need at least 3.5 million new homes by 2025 to meet current demand."
"In a separate poll by the market and research firm Probolsky Research, nearly 65 percent of respondents said they support returning land-use decisions to localities.
“Voters strongly oppose the new state laws that strip our ability to speak out about what is happening literally right next door to our homes,” Redondo Beach Mayor Bill Brand said in a statement.
Lewis, of California YIMBY, said a pattern has emerged pitting Southern California against the rest of the state since Newsom signed the housing bills into law."
https://research.stlouisfed.org/publications/page1-econ/2017/01/03/education-income-and-wealth/
"The relationship between education and income is strong. Education is often referred to as an investment in human capital. People invest in human capital for similar reasons people invest in financial assets, including to make money. In general, those with more education earn higher incomes (see the table). The higher income that results from a college degree is sometimes referred to as the "college wage premium." Research shows that this premium has grown over time.7 In addition, in general, the more skills people have, the more employable they are. As a result, workers with more education have a lower average unemployment rate than those with less education (Figure 4)."
The current administration appears to be endorsing the Unitary Executive Principle in banking via the FDIC, from todays NYT: "On Thursday and Friday, progressives took pains to emphasize that the FDIC's move was not simply a power grab and that they really did care about bank mergers.
"The FDIC has a responsibility to make sure that banking markets are healthy and competitive," said Senator Sherrod Brown, Democrat of Ohio and chairman of the Senate Banking Committee. He endorsed the board's move.
The FDIC is governed by a five-member board whose members serve six-year terms. Its political makeup is supposed to generally allow input from both parties. At any time, a fully seated board will consist of two Republicans, two Democrats and a chair appointed by the president for a five-year term. One of the five seats is currently empty; the others are held by Ms. McWilliams, Mr. Gruenberg, Mr. Chopra and another bank regulator, the acting comptroller of the currency, Michael Hsu, also a Democrat.
Under Ms. McWilliams, the FDIC has adhered to Republican ideological lines on topics such as climate change and a general tendency to let banks take on more risk while holding less capital in reserve. If she left, the FDIC would very likely embrace President Biden's agenda, which involves shifting the federal government's stance on big issues like climate change and income inequality.
In December 2020, after Mr. Biden was declared the winner of the presidential election, Ms. McWilliams rushed through a change to an FDIC rule governing certain bank deposits. She circulated the final version of the proposal at midnight on the day before the board had to vote on it. Once Mr. Biden was able to make appointments to the FDIC board, the rule would not have had the votes to succeed.
And in late October, she abstained from a vote on adopting a report on the risks climate change poses to the U.S. financial system by the Financial Stability Oversight Council, a body composed of the heads of various financial regulators that was created in the wake of the 2008 financial crisis. Ms. McWilliams said she did not think the oversight council's staff had been given enough time to research and write the report. But her decision was widely viewed as an indication that she would continue to remain loyal to Republicans."
The NWS was such a nefarious, retribution, and revenge created document coupled with the bogus accounting assumptions and write downs used to bypass the constitutionally mandated federal funding of government process that it caused me personally to realize that I should stop my life long voting for your preferred party.
How can I vote for them in good conscience knowing that they would prefer to Nationalize two private corporations in direct contradiction of the primary duty to conserve and preserve their assets and in direct contradiction of the 5th Amendment Takings Clause of the US Constitution?
Do you want our future posterity to live in a country governed by some of the tenets of Socialism?
The previous POTUS letter seems like it could end up helping the Collins Plaintiffs and at least the Donald called out the injustice inflicted upon hard working Americans by the NWS, let's hope someone reads it and understands what exactly the shareholder injustice is here.
"The surge in prices will also provide a buffer against foreclosure for the 1.2 million borrowers who reached the end of forbearance in September."
https://finance.yahoo.com/news/u-homeowners-gained-average-57-130000898.html
I don't think Capital Research and Management are Plaintiffs in any of the litigation are they?
When you are starting with ZERO CAPITAL to insure $5T of MBS outstanding, 2 years is not enough time. 4 years maybe, 8 years perhaps. Are you not seeing any damages to your investment from the fact that DJT had to wait until that, "Political Hack Democrat Mel Watts' term had ended?
Do you still believe in the dilution solution?
Good point, Mr. Market is equally as skeptical given the constant watching of the government attorneys slam dunking the ball in all these cases so far. At least they are narrowing down the issues, let's see if we survive the pretrial motions, the trials, and of course if we get a penny in damages it will be all for naught.
At least the prior POTUS recognized in writing the Socialist move of the NWS done by his predecessor. That may end up being all we get, as Justice Gorsuch lamented, "I suppose you could frame it up on a wall, but nothing else."
What do you think about this: In their latest term, the SCOTUS in Cedar Point Nursery, determined there was a temporary or partial taking and remanded to the 9th Circuit for damages. If the legal question as stated by Judge Lamberth is whether or not the jps and common investors could reasonably anticipate that the government would act the way it did, in sweeping profits to itself and giving NOTHING to the jps and common holders and the answer is that no they could not, that could be found to be a breach of the implied contract and additional damages could be awarded above and beyond the temporary taking from the nws.
If there is found to be a temporary taking via the nws, the damages from the the unconstitionally insulated Mel Watt sweeps of profits could be deducted but in addition to the swept profits under Watt, what about possible damages awarded to shareholders not being released, BUT FOR the unconstitionally insulated FHFA Director problem in HERA?
I'm talking about this with FFacts over on the fmcc ihub board...
He's positing that if a taking is found in CFC, then shareholders get nothing in Lamberth and Collins.
I'm just distinguishing between a total Takings versus partial.
In their latest term, the SCOTUS in Cedar Point Nursery, determined there was a temporary or partial taking and remanded to the 9th Circuit for damages. If the legal question as stated by Judge Lamberth is whether or not the jps and common investors could reasonably anticipate that the government would act the way it did, in sweeping profits to itself and giving NOTHING to the jps and common holders and the answer is that no they could not, that could be found to be a breach of the implied contract and additional damages could be awarded above and beyond the temporary taking from the nws.
If there is found to be a temporary taking via the nws, the damages from the the unconstitionally insulated Mel Watt sweeps of profits could be deducted but in addition to the swept profits under Watt, what about possible damages awarded to shareholders not being released, BUT FOR the unconstitionally insulated FHFA Director problem in HERA?
I hope the Judges read the part of his letter about "the ripping off of hard working Americans" via the Net Worth Swipe!
“Defendants cannot simply say that since HERA permits the conservator to act in its own best interests, the FHFA can do whatever it wants and plaintiffs could not expect otherwise,” the judge wrote at the time. “The question is whether defendants exercised their discretion arbitrarily or unreasonably in a way that frustrated plaintiffs’ expectations under the contract. Plaintiffs plausibly allege that they have.”
http://www.glenbradford.com/2021/12/fnma-fanniegate-1093/
I think each of the 3 cases you mentioned are mutually exclusive. In Collins the federal government is on the hook for damages from actions it took while unconstitutionally structured. In Laberth I believe that the government is potentially liable for contract damages. And in the cfc the government may be liable for constitutional violations of the 5th Amendment Takings Clause.
If any of the separate courts rules against the government, the doj could ask the court to consider damages paid from other court cases but it should be up to the discretion of each separate court.
Thanks! That's a great discussion, including the fact that Cory Todd Wilson (Senate confirmed June 2020) will be on the EnBanc Panel of Judges!
https://en.m.wikipedia.org/wiki/Cory_T._Wilson
https://ballotpedia.org/Cory_Wilson
You always find the best stuff, thanks!
Great find Navy, thanks!
Great points, Ano! And thank you for your time and attention and research into this 14th year of federal governmental overreach and I especially like how you track all these varied lawsuits throughout all the federal circuits as well as the state courts.
Well, it's hard to get excited about the courts saving us after getting slam dunked by Uncle Sugar over and over again with the federal judges to date treating the government with a "The King can do no wrong" rulings. But remember that the 5th Circuit is generally a good circuit to hear these types of complaints and many on the EnBanc Panel of 16 judges, unlike the SCOTUS, seem to understand what exactly the government is doing here. I think Judge Jones even asked Hashim, "Why would the government deplete all the capital of a bank like company if they are a conservator?".
As for the general investing public and Mr. Market and the business and main street media goes, do they really know as much or understand what exactly is going on here as one Glen Bradford or those that do?
The DJT administrations options were clearly curtailed because of the unconstitutional HERA. According to the letter, DJT wanted them out of government control FROM DAY 1 and that is further bolstered by SM's statement to Maria B. early on, "Maria, we have to get them out of government control".
BUT FOR THE UNCONSTITUTIONAL HERA PROVISION THE DJT ADMINISTRATION COULD NOT CONTROL THE FHFA AND THIS COMPRESSED HIS TIME FRAME TO 1/2 A TERM (I'm sure Pocahontas was delighted!).
The whole point of all this is simple, the US Constitution demands that the POTUS have control over the Executive Branch of government, DJT ONLY HAD 1/2 TERM NOT 1 FULL TERM TO UNDO THE OBUMMER ADMINISTRATIONS SOCIALIST MOVE TO NATIONALIZE THE GSES!
Thanks! It seems that both Bloomberg and the Wall Street Journal haven't taken the deep dive necessary to totally understand what exactly is going here. It's easier for them as well as the main street media to revert back to the false "death spiral" narrative as well as the "enriching the evil hedge fund guys" mantra.
Could be difficult for the 16 judge EnBanc Panel to ignore these pertinent indisputable facts:
1. DJT WOULD HAVE FIRED MEL WATT ON DAY 1
2. HE WANTED TO RELEASE THEM
3. BUT FOR THE UNCONSTITUTIONAL HERA HE COULDN'T
Did the Bloomberg article address the Plantiff Shareholders argument that BUT FOR the unconstitutional provision in HERA, that the DJT administration WOULD HAVE RELEASED THE GSES?
Sounds like damages could be more than just increasing their retained earnings during the "Incompetent Political Hack Mel Watt's" tenure from January 2017, wouldn't it?
We'll see what happens.