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“FHFA gets its funding outside the normal appropriations process”
Correct but see it also in the larger scheme of things, I think it will change funding mechanisms, the director is now fired “at will” so the agency is functioning by (now) as a regular agency (no longer independent) and with policing FHFA, and with Funding outside the normal appropriations process the government makes itself guilty to a conflict of interest, running government agencies for the best interest of the government and policing the agencies or departments, and let its participants pay, is at least very unwise in a non-banana republic country, imaging the IRS or the police department is funded by google or amazon.
It was just not a very bright idea to begin with, so let’s hope they see the light and change the funding to government funded, so shareholders of FnF don’t have to argue that 605 (2017) https://www.federalpay.org/employees/federal-housing-finance-agency FHFA employees are too much compare to regulated entities they control, and that they bought way too much toilet paper for 605 persons..
So what does FHFA do for the money we give them as shareholders, They identified three goals: https://www.fhfa.gov/AboutUs
1. Ensure safe and sound Regulated entities (that’s right, you heard that correct “save and sound with no capital, for 10+ years”)
2. Ensure liquidity stability and access in housing finance (well the liquidity is draining in perpetually, the stability is nonexistent as they can do whatever they want, and not sure how you can accomplice access to housing finance as a 3th party other than calling treasury)
3. Manage FnF ongoing conservatorships (sue us in perpetually, twist facts, and make sure private capital will not enter)
But as to the hiding behind sections you are right 4617F will not be void, but the court will NOT agree with the government that FnF were 4617F and in dead spiral in 2012 Either
§?4617. Authority over critically undercapitalized regulated entities
(F)Inability to meet obligations
The regulated entity is likely to be unable to pay its obligations or meet the demands of its creditors in the normal course of business.
FYI Section 4617:
(a)APPOINTMENT OF THE AGENCY AS CONSERVATOR OR RECEIVER
(1)IN GENERAL
Notwithstanding any other provision of Federal or State law, the Directormay appoint the Agency as conservator or receiver for a regulated entity in the manner provided under paragraph (2) or (4). All references to the conservator or receiver under this section are references to the Agencyacting as conservator or receiver.
(2)DISCRETIONARY APPOINTMENT
The Agency may, at the discretion of the Director, be appointed conservator or receiver for the purpose of reorganizing, rehabilitating, or winding up the affairs of a regulated entity.
(3)GROUNDS FOR DISCRETIONARY APPOINTMENT OF CONSERVATOR OR RECEIVERThe grounds for appointing conservator or receiver for any regulated entity under paragraph (2) are as follows:
(A)Assets insufficient for obligations
The assets of the regulated entity are less than the obligations of the regulated entity to its creditors and others.
(B)Substantial dissipationSubstantial dissipation of assets or earnings due to—
(i)
any violation of any provision of Federal or State law; or
(ii)
any unsafe or unsound practice.
(C)Unsafe or unsound condition
An unsafe or unsound condition to transact business.
(D)Cease and desist orders
Any willful violation of a cease and desist order that has become final.
(E)Concealment
Any concealment of the books, papers, records, or assets of the regulated entity, or any refusal to submit the books, papers, records, or affairs of the regulated entity, for inspection to any examiner or to any lawful agent of the Director.
(F)Inability to meet obligations
The regulated entity is likely to be unable to pay its obligations or meet the demands of its creditors in the normal course of business.
(G)Losses
The regulated entity has incurred or is likely to incur losses that will deplete all or substantially all of its capital, and there is no reasonable prospect for the regulated entity to become adequately capitalized (as defined in section 4614(a)(1) of this title).
(H)Violations of lawAny violation of any law or regulation, or any unsafe or unsound practice or condition that is likely to—
(i)
cause insolvency or substantial dissipation of assets or earnings; or
(ii)
weaken the condition of the regulated entity.
(I)Consent
The regulated entity, by resolution of its board of directors or its shareholders or members, consents to the appointment.
(J)UndercapitalizationThe regulated entity is undercapitalized or significantly undercapitalized (as defined in section 4614(a)(3) of this title), and—
(i)
has no reasonable prospect of becoming adequately capitalized;
(ii)fails to become adequately capitalized, as required by—
(I)
section 4615(a)(1) of this title with respect to a regulated entity; or
(II)
section 4616(a)(1) of this title with respect to a significantly undercapitalized regulated entity;
(iii)
fails to submit a capital restoration plan acceptable to the Agency within the time prescribed under section 4622 of this title; or
(iv)
materially fails to implement a capital restoration plan submitted and accepted under section 4622 of this title.
(K)Critical undercapitalization
The regulated entity is critically undercapitalized, as defined in section 4614(a)(4) of this title.
(L)Money laundering
The Attorney General notifies the Director in writing that the regulated entity has been found guilty of a criminal offense under section 1956 or 1957 of title 18 or section 5322 or 5324 of title 31.
In 1968 the government under Lyndon Johnson's changed the explicit to implicit due to budget reasons of the Vietnam war, the thinking behind this was, the explicit guarantee was costing money, so they needed to get rid of that, to save money for the Vietnam war, so they did just that, no more no less, but since the government is good in words they sold it to the people as “implicit guarantee” (which indeed is non-existing) meaning that FnF had NO guarantee from the government, but they figured in case they ever needed to be bailed out the government would almost certainly need to step in anyway, as it is a systemically important company (TBTF) https://www.housing-finance-network.org/index.php?id=318
so yes There is no such thing as an "implicit guarantee" but you can sell it that way..and if you talk about it long enough, everybody starts believing it.
The government is hoping to set precedent that no other thing has to be done then undo the 3th only, but with changing from "for cause" to "at will" their charter is no longer independent, and FHFA will (has become until ruled otherwise) become a government funded agency, and in all cases the most the government are bragging about, it that nobody can tough them as they are an independent agency, even the court ruled they can do whatever they want because they are independent , so with that no longer being the case, and the government no longer defending the “for cause” the charter is changed to at “at will”, so the hiding behind sections of untouchable also are void, so it is likely to me that the undo of the 3th only is NOT the only remedy they have for us holders
on 28 feb , the government informed the court about the Aurelius Investment, LLC v. Commonwealth of Puerto Rico case
in Bhatti the government claims “were acting with the color of authority,”
namely a federal statute; they had “acted in good faith”; and nullifying their
past work would be enormously disruptive.” http://gselinks.com/wp-content/uploads/2019/03/18-2506-4761447.pdf
In collins this section is left out? And changed to “recognizing the critical importance of avoiding “disruption,” the Court
severed the offending statutory language, leaving the statute creating and
empowering the board otherwise intact. Id. The court further held that the
de facto officer doctrine supported leaving the board’s prior actions in place,
notwithstanding its holding that the board was unconstitutionally structured.
Id. at *16. The court thus granted purely prospective relief, “follow[ing] the
Supreme Court’s exact approach in Buckley.” Id. at *17. http://gselinks.com/wp-content/uploads/2019/03/17-20364-00514856362.pdf
if FHFA was acting as a proper conservator, previous actions don’t need to be reversed, but guessing the lawsuit was not made for fun, most likely Aurelius would be right and FHFA did not do their job as it didn’t in our case either, see how easy it is too loose trust
In our case the 3th amendment is unconstitutional (as the whole FHFA) and they did not act in good faith by implementing it, what the Bhatti and Collins filing tells me, is that the government is very nervous it is not going their way this time.
It is strange the government is informing the court this, this is a total loss for the government as they in our case did NOT “act in good faith” by siphoning off all profits in perpetually it would be proper for Collins to inform the 5th about this, and since in Aurelius “the restructuring work done by unconstitutionally appointed board members was not invalid and would not be vacated” it does need to be vacated in our case, as the unconstitutional restructuring work done by unconstitutionally appointed board members that are implemented by an unconstitutional agency, it leaves me to believe justice is going our way
it would be the right thing to do, the then acting director of 2012 Ed DeMarco placed them “voluntary” in conservatorship, and the acting director in 2019 Otting will take them out of conservatorship, so Mark can start with a clean sheet, brilliant maneuver by the administration IMO
as FHFA is no longer an independent agency but a government agency, due to the “for cause removal” could FnF force back the funds they paid so far for keeping FHFA afloat, Any toughts ?
Are you referring to the old 1980-2007 narrative that the government wanted to get rid of Fnf fore more than 25 years and finally saw their change in 08, but didn’t know how because they lack funds to buy shareholders out, and had no system to replace it?
https://www.citizen.org/sites/default/files/chapter-five-downfall-of-fannie-mae-and-freddie-mac.pdf
creditline (creditcard) will not do instead of capital
Indeed both FHFA and treasury want the NWS upheld, but the court asked what possible remedy there was to look for, and either FHFA or Treasury replied not to remand, so they see the problem
A remand will not help the government nor holders, the time is right to end the saga, there is just not much more too say, facts are known, and let’s face it, the judges have been awful polite so far with the government not making their point, so it is just not justified to keep draining the super profitable companies in perpetually everybody will agree with that, even the uninformed judge in perry needs to make a 180 by now, do you know where I can find more about the perry case?
About the Converting and the possible roadblocks, imo to start at the beginning Bruce bought the prefs and started a lawsuit because he thought the NWS was not legal and dividends due must be paid, and prefs would go to par, now with all the knowledge of today, you can safely say the government has not been very lawful in disclosing what happened (10.000 documents), and the only thing they are properly defending is hiding behind chapter 46, and previously judge orders, so they have NO defense or what so ever, now when and if the NWS is rolled back and if prefs are converted to common, they acknowledge the suspension of the dividend was not correct, and as Prefs are non-cumulative the government is eager to stick to non-cumulative, so they rather pay missed dividends than converting the pref contract to convertible contracts, which will be a fuss, and as that may also set a precedent to other cases, also it will fuel commons to counter as they are diluted, and not to forget how to set a conversion rate?, who gets what percentage at what time in history and how did it evaluate over time, and at what percentage are the prefs trading and commons trading after it is said it is
unconstitutional, it all will prove to be mission impossible math wise to me, undo everything is the cleanest possible option, pay prefs missed dividend and relist, I’m not sure who came up with the convert idea first (it was not moelis),but its been very sticky throughout the years, and how to covert something for no reason if the NWS is undone anyway
The vast majority of holders are indeed pref holders, but that said, a company is only valued in perception by common shares, if a EPS is zero the stock price is not as high as when a company has a huge EPS, the outside world is only looking at commons and price it to earnings, there is no pref involved or whatsoever, it is about what is the upside and what is the dividend and what is the dividend rate talk only, that does not mean you are not right, prefs are hurt and missed dividends should be paid, and stocks should be close to par price
Regarding the” they won't care about back dividends” the commons are currently valued at 20.1% of the company, when the NWS is void this will change as will the value of the commons, with that the prefs also will trade much higher, I see no math possible how to figure out what percentage is justified, plus most of the lawsuits are killed by ending the NWS, also the pref to common talk
As for the “bad faith” a company can never suspend dividend to give them to the government is perpetuity, just not possible legal wise, lamberth was just not properly informed, and looked the other way, he received a slap on the wrist and must rule now on the facts that lay in front of him, the misinterpretation zone is far behind us now, imaging this would happen the google or Amazon
Regarding creditcard, The government position is indeed the credit line (creditcard) will do instead of capital (in the 5th en banc) here the government makes a huge huge mistake, they run the place for more than 10 years and drain the company each quarter after quarter, if they had not done that the company would be sufficient capitalized, so the government cannot claim the job is not done, with siphoning off the capital they are not doing their statuary job and with the current job the companies will never be capitalized, so they cannot claim anything on the job they are doing now, as it will bring them into trouble
Regarding remand it is 50/50 FHFA and treasury and FHFA are not on the same page, 1 asked for a remand and 1 asked not to remand, don’t recall who asked for what, so that with the 2020 timeline you mentioned and the outspoken intension to get them out of conservatorship during this term makes me reasonably believe this will be a slam dunk, plus a positive 5th circuit ruling will be so much more cheaper for the administration
You read too fast in the NON-Cumulative, it is cumulative not convertible, cumulative as in building up, growing, snowballing dividends “If the company chooses not to pay dividends in any given year, the shareholders of the non-cumulative preferred stock have no right or power to claim such forgone dividends at any time in the future.” And since there are convertible prefs too that can be changed from pref to
common (but not in FnF), it would be changing contracts, and why is there a remedy needed for prefs, because they did not receive dividends, so converting to me is very very difficult if not impossible, I see a lot of roadblocks to converting,
as to “The junior prefs hold nearly all the cards” I don’t see it, they want a conversion, because dividends where not paid but should be paid, I agree so that is what is supposed to happen either missed dividends are paid or just compensation. All other half backed solutions can be put to rest IMO
Quote:
1)the catch 22, loan money, but you can never repay
2) being under capitalized due to conservatorship
3) 79.9% ownership with never leaving, the government should put the 5T on their balance
4) 10.000 documents should be disclosed for public interest what happened
5) Draining a company to fund the government
6) in conservatorship yet acting in governments favor
7) 3th amendment put tax payer at risk in perpetuity
8) If the pref are converted to common they admit they have done something wrong
9) EPS are not honestly disclosed (cooking the books)
10)pay damages as FNF now can never return to normal for profit companies
11)Stock manipulation
12)Government officials claiming on national tv to short a stock
13)Acting director puts FnF in conservatorship (only if they claim something on otting)
As to the lawsuits most of them are about ending the nws only, NON of them are filed on the catch 22 case, and there was never a ruling that the government could run conservatorship and draining the reserves of a company, think about it, it is really mind blowing what these cases can accomplish
On the 79.9% you are correct, warrants are not exercised yet, but with the “can never leave hotel California“ it makes them responsible, you cannot have both sides, either private or government, and since the government is eager to hold, they should have it, pay us and put 79.9% on their balance
Regarding what the prefs have done wrong, Nothing at all, but with converting prefs for common they amid it was not proper for them to suspend the dividends, so they admit decisions were made in bad faith
As for 9,11,12 you are correct, it is very difficult to make a stand alone lawsuit from, but is could be embedded into others
Regarding “Relisting the commons can't happen until after the companies are recapitalized” sure they can be released and relisted, they have the credit card of the USA, and according to the government lawyers that is enough, you do not need capital a lifeline is enough, and if you need capital the Nws sweep is illegal, and then again you have capital because they need to pay it back
As for the damages, it is very difficult to envision the whole picture without knowing what actions are taken in the future, if you take a look at what happened and the decisions made in the past, it is very clear the government overstepped its authority, if you take the 80/20 solution we are in the 80 and the government is in the 20, with failing to settle in the ackman case it tells me the government was not aware of the problems they found themselves in, so the government said screw you to bill and bruce, but the problem did not leave, and only got wors, and now before it gets out of hands in the 5th ,a solution must be thought of, will it be wise? I hope so for the government and us, but what the outcomes is, I do not know, is it in favor of shareholders, YES
Understand where you are going but you seem to forget, FnF are all about lawsuits and the harm done, we investors see there is indeed harm done, the fixes you talk about are all about fixing the current system and no harm is done, with no questions asked. with 2 dozen lawsuits pending with all minor differences to cover earlier holes the only logical option is to settle, but as earlier attempts did not work it all about black or red now, any outcome on the 5th circuit will have its own consequences but as everything is covered at this stage the real ruling can be done, upto know they could play hide a seek but the higher you go the less errors are allowed, that is why sometimes they remand it back to the lower court saying you did not proper do your work, take a look again and make a 180% turn or your ruling please
that said it just took too long (making themselves favor the government) so they probably will not remand and release an opion within the next 4 weeks
As to the prefs and commons, I’m not claiming either to be pro pref or pro common but a NON-Cumulative preferred stock is not a Convertible preferred stock, with the suggestion they do can covert, it will be a again a breach of contract and the new administration IMO wants to make as less loose ends as possible, As the contract clearly states NON-Cumulative http://www.fanniemae.com/resources/file/ir/pdf/stock-info/series_s_12062007.pdf
IMO Bruce bought prefs as he was the first, and didn’t want to invest that much money and risk of losing it all, the sentiment was really bad at the days he bought, so I agree with him, it was the only logical solution to buy prefs to not lose all your money, later Bill bought commons figuring that the 30 year mortgage could not survive without FnF I agree with him too, it will not work without FnF, now taking into account the time line and the series preferred are a less risk option if FnF face liquidation, if FnF do not face liquidation the commons are more wise as the upside is higher (prefs max is par, common has no cap) , or course we have a number of lawsuits pending, but the eventual ruling will end the NWS, a re-ipo seems highly unpractical but now I’m repeating my self
As for new lawsuits in random order they could produce more nasty and faster claims especially when they ask retail people to file, for instance:
1)the catch 22, loan money, but you can never repay
2) being under capitalized due to conservatorship
3) 79.9% ownership with never leaving, the government should put the 5T on their balance
4) 10.000 documents should be disclosed for public interest what happened
5) Draining a company to fund the government
6) in conservatorship yet acting in governments favor
7) 3th amendment put tax payer at risk in perpetuity
8) If the pref are converted to common they admit they have done something wrong
9) EPS are not honestly disclosed (cooking the books)
10)pay damages as FNF now can never return to normal for profit companies
11)Stock manipulation
12)Government officials claiming on national tv to short a stock
13)Acting director puts FnF in conservatorship (only if they claim something on otting)
As for he damages caused it is either they are guilty or not, if guilty they should pay prefs missed payments and relist the common, if not guilty they are in the same trap as the Obama administration and the lawsuits continue forever new ones will be filed after each ruling and the bill only gets higher, as we are already in the almost 11 year now damages determined by the court should be paid to prefs and commons already including interest and inflation now, as this is a too long period to “forget” about interest/inflation (just and proper)
Seems farfetched to me for the reason the moment the NWS is announced to be undone, the prefs will immediately trade at par, or close to, and the commons will see this upside too, joseph or mark or the 5th circuit only need to say two words “end NWS” so to determine what the conversion ratio for pref to common is upfront of the undo, is almost impossible, IMHO the most likely outcome will be the prefs receive their missed payments and commons get the upside of price appreciation of the commons and dividends are restored immediately. will the government get away with the above scenario, maybe, it is just so complex that the large investors might be willing settle just for the sake of time, if the deals is worse than above they probably wait another couple of years to see more benefits, with so many loose ends by the government investors smell blood, so it is a business case to every large investor, so they will start new lawsuits again over the actions about to be taken if improper, if they think it is not enough, the investors are right and the government knows this too, so they probably will make an offer that is legitimate “good”, at least hope so for them and us
The NWS itself is complex too, the contract with the 3th amendment is unconstitutional for sure, but if they strike the 3th only the 3 card monte pops up instantly, with an even worse outcome in the end than just ending the sweep
Now for paying damages, if they do not pay for damages caused, all paper they issue in the future will have a lower rating, as obligations are not met in the past, and due to the lower rating, money will be more expensive to them, so future earnings will be lower
Bottom-line: the longer the government waits with ending the sweep the more expensive it becomes for them
And the better the outcome is for prefs and commons, the less problems FnF face in the future.
To my knowledge all FnF prefs are NON-Cumulative preferred stock, NOT Convertible preferred stock
“Non-cumulative preferred stock does not issue any omitted or unpaid dividends. If the company chooses not to pay dividends in any given year, the shareholders of the non-cumulative preferred stock have no right or power to claim such forgone dividends at any time in the future.”
“Convertible preferred stock includes an option that allows shareholders to convert their preferred shares into a set number of common shares, generally any time after a pre-established date
https://www.investopedia.com/terms/p/preference-shares.asp
FNMAS pref stock: http://www.fanniemae.com/resources/file/ir/pdf/stock-info/series_s_12062007.pdf
how would prefs convert to common?
The solving of an issue always starts with the beginning, so ones FnF were in conservatorship, the problems began, why are they in conservatorship (FHFA did a poor job?), why were they proper capitalized just a couple of weeks before the conservatorship, why did they sell earlier the same year new common and pref shares, etc etc etc, back then the attitude of burn all bridges behind you was not wise, also the suspending of the pref payments was not the most skilled maneuver they made because it now hunts them, imagine you have 200B on the shelve and the government asks you to buy 10M preferred stock, would you do it? And if you bought 200M common in 2008 for $27.50 each, would you now buy additional shares that can be diluted, haha no of course not, ask yourself the same question, if tomorrow they relist and prefs are par and commons are $ 30.- would you exit FnF and never come back? Indeed Probably most will leave and never ever come back, nobody is willing to invest money without certainty what they get back and even if it is clear the return of investment then needs to be proper otherwise they still will not invest, the government proved to be a VERY bad “lender of last resort” also if FnF issue new paper it needs to be rated “D” for default of junk paper, because fitch and moody’s don’t want to loose any trust on this matter again, last time they rated FnF AAA+ which turned out to be D!!! and as FHHA is the government and FnF are also run by the government trust is the factor the government wants to invest in in order to get thing done, that is why nmuchin said he “make sure it never happens again”, with the 5th ruling it is unconstitutional, that can be established
But as to what entails the “making good on commons and prefs” it is just more easy than initially thought, all 3 people (FnF, FHFA, Try) can agree on, they wait until the 5th circuit rules that NWS is unconstitutional and roll back the NWS, return all taken funds, pay prefs and commons due and missed dividends in both, most likely in cash for caused harm, as it is the cheapest way to distribute (and as it otherwise will hurt trust down the line) relist, change the FHFA structure to a government agency as it already needs to be changed to “att will”, with that 4516 is void, pay all fees on all lawsuits outstanding, fitch and moody’s can rate the new paper as the old as "nothing" has happened, Trump can claim victory with solving the matter.
All other scenarios we seen so far all forget that trust is broken, and which trump can help restore by undoing the NWS.
The plans so far are either not workable or not detailed enough to be implemented, the moelis paper was the most advanced but still a sketch as no details on market willingness or workability was given, nor what investment returns are, nor how big the demand was, nor how many investor are standing in line to pay for it all, it is very easy to say what you want, but is it possible, that is more important than what you want, the biggest IPO ever was 25B from alibaba, so were to get 100-150B for recapitalization, not from current shareholders that’s for sure
Regarding who will get the benefit, it will be the current holders only, investing is patience, the old 2008-2012 holders sold their shares, with that they lost all upside and downside in the stock, if illegal or not the rights transfer with the stock, “is it fair or just”, it is fair I think, they probably made more with the capital so far then we did…
video Gabriella Heffesse
https://www.realvision.com/tv/shows/trade-ideas/videos/a-new-fannie-mae-play
FnF caused the crisis of 2008 ?
We all know that is not correct but it is correct, they only forgot a word in the sentence. It should have said “ Fannie and Freddie’s conservatorship caused the crisis”
And in order to save the banks from failing, TARP needed to be implemented but because of the conservatorship of FnF
If the market is in turmoil which it was back in 2008, only a couple of banks need to fail in order to generate the “run on the bank”, by putting FnF in conservatorship the stocks and preffered stock became worthless and bank needed to take a hit, and the domino was born as we now know the 2008 crisis
Following banks were in 2008 on the brink of insolvency and the FnF conservatorship contributed to that according to the federal reserve :
Table 4: Banks with substantial exposure to GSE preferred stock
Institution comments
Failed Banks: Nine subsidiary banks of FBOP Corporation TARP capital injections were sought but not available because FBOP was privately held. Cross guarantees caused all nine subsidiaries to be seized.
Failed Banks: National Bank of Commerce Totally obliterated
Failed Banks: Midwest Bank and Trust Received an $85 million capital injection through TARP but later failed due to bad real estate loans
Failed Banks: Great Basin Bank Contributed to the failure
Failed Banks: Venture Bank Contributed to the failure
Failed Banks: Nevada Security Bank Applied for but did not receive TARP
Banks Put Up For Sale: Gateway Bank and Trust Co. Would have likely failed without merger
Banks Put Up For Sale: State of Franklin Svgs Bank Would have likely failed without merger
Banks That Indirectly Failed: PFF Bank and Trust PFF was set to be acquired by FBOP, but FBOP backed out after suffering GSE losses. PFF subsequently failed
Banks That Survived: OneUnited TARP infusion of $12 million
Banks That Survived: Central Virginia Bank TARP infusion of $11 million
Banks That Survived: First Citizens Bank TARP infusion of $30 million
Banks That Survived: Greer State Bank TARP infusion of $10 million
Banks That Survived: Five Star Bank TARP infusion of $37 million
Banks That Survived: Berkshire Bank Owner infused $60 million
Banks That Survived: Riverbank
this of course is only a tip of the iceberg, as more then 600 instatutions were exposed to FnF, if you read “2. The 2008 Intervention to Stabilize Fannie Mae and Freddie Mac and Its Implications4”
it becomes even more clear, the government will have a very hard job if not impossible to raise new capital without making good on commons and prefs.
a very good insight: https://www.federalreserve.gov/pubs/ifdp/2012/1045/ifdp1045.htm
Well so we are not on the same page on certain things, there’s nothing wrong with that, let’s find some mutual grounds here
In the testimony of mark Calabria at 1:18:25 Mr Tester tells Mark “you want this agency (FHFA) to go away or at least significantly restructured we got a poblem” https://www.banking.senate.gov/hearings/02/07/2019/nomination-hearing with full privatization of FnF, the FHFA is no longer needed in its current form with 600+ people , and indeed the government has a problem as it is no longer calling the shots on the whole package they forced upon FnF
At the oral arguments from the 5th circuit at 53:00 - 56:32 speaks about how FHFA entered into a Unconscionable contract and they amid it too, over and over again, not only in this time but from the first moment they started defending it they claim they entered into the 3th amendment because of the death spiral, how much more of a Unconscionable contract can it be before it is ruled unconstitutional http://www.ca5.uscourts.gov/OralArgRecordings/17/17-20364_1-23-2019.mp3
Also the “for cause” removal as FHFA is no longer defending it and it is already ruled as unconstitutional the contract needs to be changed to “at will” with that said the whole judicial review passage that FHFA uses to defend itself can be swept, as FHFA is then a government agency it also needs to be funded thru the government too instead of FnF paying the bill, with that said The NWS sweeping profits in perpetually is unconstitutional and
So as we can see the pressure is building and https://livestream.com/accounts/1028220/events/8561696/videos/187617124?fbclid=IwAR1KS_n_r27-Ddjs3lVh0i78QrlbzWJhYcuNGHL-40rDVBi4iXDwUVMOzyk Here on the 30:10 mark it makes very clear investors are not willing to invest if uncertainty or changes in the shareholders rights occur
kthomp19
I understand your thoughts but you need to zoom out and see the whole picture what has happened here, you seem to focus on the lines of the government and forget about the rights we (you and me and all others) have and thereby miss the complete picture, regarding the contract if unconstitutional, it means both ways, for us and them, otherwise a contract is a Unconscionable contract and the government is not going to get away with that, 100% sure that is not going to happen…. Last thing they want to do is pay damages in perpetually as something new is found and it sure looks like it at this point.
Regarding the SPSPA they are going away with the warrants, the scheme here is the 5th circuit seems to be aware as the first circuit that FnF were taking into conservatorship under false circumstances, so the best they can do (and in the mind of trump) is to unleash FnF undo the whole thing. How that works out, cold turkey or thru reversing on thing which takes all other things down, I’m not sure, but in the end all things are “undone”, the more you put into a contract the worse it gets for your right, as you cannot force the other party to do things that are unworkable, in the case of FnF the obviously Unconscionable contract the government forced upon them, they run the place for 10+ years received more than the invested funds and the companies are broke…
Regarding the settlement I think we are past the settlement, it could be that Sweeney is in the last stage and that the 5th is taking over, but for the 5th to start a settlement will be too late, the plaintiffs would not be interested as a ruling will be quicker, (as what trump wants) with a higher return, so a delay from the 5th will not come IMHO
Regarding the reverse of SPSPA and APA, the net worth sweep is unconstitutional as it is 3 times amended without reversing the NWS or to void it, if they would not have added the 3th amendment it would have been a whole different ballgame, so now the government is aware about the things they have done, so the NWS is now a catch 22 which is you can never leave hotel California, that of course is not not lawfull at all no matter what point of view you have
the APA claim is “For such more formal actions, agency decisions must be supported by "substantial evidence"[13] after the court reads the "whole record,"[13] which can be thousands of pages long.”https://en.wikipedia.org/wiki/Administrative_Procedure_Act_(United_States)
And since the "substantial evidence" shows just the opposite of what they should have been doing for 10+ years now “money damages” also must be paid, and the longer it takes to a ruling the more money damages must be paid, so it is in the interest of the taxpayer the court rules rather sooner than later
Regarding the "avalanche of new lawsuits" when the 5th circuit places it opinion they will say stuff and that also means other stuff is not said (like in all the other cases) the 5th circuit will be the first to rule on the larger scheme of things and since it is only a step away before the SCOTUS kicks in they will make sure to fill all the empty gaps the lower courts left open, if they do not touch certain parts that the courts left open, a new lawsuit will jump in, so it could be an avalanche but don’t think so because the 5th will make a decent ruling, and since the NWS warrants and SPSPA are intertwined it will be hard to undo the whole thing IMO
Regarding the FHFA and there regulating authority, ones FnF are FULLY privatized they can no longer be overseen by FHFA sure they will have stress test and other regulators, but not the FHFA or at least they are not “in the hands” of FHFA as they are now, you cannot regulate apple and google either they are private companies, ones FnF are released they are still under FHFA control but not yet fully privatized either
Regarding the funds for RRR, ones the 5th circuit rules the NWS is unconstitutional funds needs to flow back to FnF and they are more or less fully capitalized, the US government is not a for profit company, there is only one thing the US government has to do, and that is protect its citizens, otherwise it is not fulfilling its obligation, so all shareholders are entitled to the net worth of the companies as they are also us citizen and need to be protected by the us government also, so all fund drained out need to be returned, not more not less
Regarding the recap money, RE-investors are not that stupid and sleeping in the woods, to invest million that can be wiped out in the next recession, if current holders are not made whole there will be no new investor, receiving a buck, is different from receiving millions or billions, imagine you have 500 million would you invest in the new Fnf?? What is the risk and what is the return are the only 2 questions left on the table, so if current holders are diluted and or prefs don’t get compensation the risk is high and investors would not enter, or only enter at a high risk profile (return) which would drive mortgage rates higher instantly.. and gives a seriously bad repution to FnF FHFA and the government
The letter comes from trump
there was no letter from the CEPR when corker told to short the stock on national television, something they might also want to look into now, and while they are on it also send a letter about Paulson in the park issue leaking information, and the accounting 3 card monte who benefited from that, disappearing into the mist, and Mell Watt doing his job but just the opposite of what he should have done, who benefited from that, and the way to large short volume, and the driving down the stock to pennies in the aftermath of the crisis, etc, etc ... LOL
But seriously the letter must be right out of the head of trump to remind al holders he IS in control and will RRR in 4 to 6 months, (after the 5th ruling) This is super, super, super difficult matter, so this is his plan C to let us know to wait till after the 5th for RRR
you are correct this is insider information, something the SEC needs to look into, you can not ask as official for a buy or sell totally irresponsable, what if somebody sells and misses the jackpot, Corker will be responsable, because he told to sell, you might want to contact inquiry@sec.gov.ph