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I think Justice Kagan asked Thompson, what about the 1st and 2nd Amendment, where do you stop at unscrambling the egg? Thompson basically answered that the Collins Plaintiff wouldn't mind that at all.
"JUSTICE KAGAN: I mean, in a case like
this, Mr. Thompson, where we're trying to figure
out the proper remedy, I mean, it's -- it's --
it's a -- it's a kind of equitable question,
isn't it, and we're trying to figure out what
position you would have been in absent a
constitutional violation. Why -- why isn't that the right question?
MR. THOMPSON: Well, I think Footnote
12 of Free Enterprise and Seila Law just last
term rejected that. They said plaintiffs don't
have to try to recreate a but-for world. And,
here, if we -- it shows why. We'd have to go
back to 2009 and see what would have happened if
Director Watt, for example, had been there
throughout the entire time and, you know, would
the President have preferred to keep the money
at Fannie and Freddie and spend it on affordable
housing rather than send it all to the
Republican-controlled House of Representatives
and the Treasury?
So that's a difficult --
JUSTICE KAGAN: Does that mean,
Mr. Thompson, that we have to do a great deal
more than invalidate the -- the -- the Third
Amendment and everything that follows from it?
I mean, why shouldn't we go back to the -- the
-- the -- the -- the First or the Second?
MR. THOMPSON: Well, Your Honor, we
focused on the Third Amendment because that's
the -- the feature of this that rearranged the
capital structure, but, as we made clear to the Fifth Circuit Court of Appeals, we are perfectly
content with all of these arrangements, which,
as we say in the complaint, were a concrete
life-preserver. It's like getting a credit card
with a double-digit interest rate that you can't
repay the debt on. It's not debt, but you can't
pay the money back, and so --
JUSTICE KAGAN: Thank you,
Mr. Thompson.
MR. THOMPSON: -- we would be
perfectly content with it being thrown out.
CHIEF JUSTICE ROBERTS: Justice
Gorsuch."
I think it is possible for the court to INVALIDATE THE PSPA.
Wasn't there language in the PSPA about something happens whenever a court rules part of the agreement invalid?
Couldn't the SCOTUS decide that they can't figure out where the damage from having an UNCONSTITUTIONAL head of FHFA began, and void the entire pspa, including the warrants?
How do they unscramble the egg?
Listen to minute mark 11:54 and Justice Gorsuch explains why Judges shouldn't rewrite legislation.
Give it a quick listen and tell me what you think...
I never said that I thought you were opposed to the release of the gses, I think we all want that, I was referring to the NAR (i.e., the National Association of Realtors), NAHLB, MBA, ABA, ETC. They just sent SM a letter "warning" him not to do it.
I was just posing the question, do you have any idea why they prefer the status quo?
Also, in this just released interview with Justice Gorsuch at minute mark 11:54, he talks about WHY JUDGES SHOULD NOT REWRITE THE LAWS BECAUSE OF THE SEPARATION OF POWERS DOCTRINE.
We know Thomas feels the same way, I am guessing that you think there is a snowballs chance in hell that the SCOTUS WON'T rewrite HERA, like they rewrote Dodd Frank to include "at will" in Seila Law.
Why don't you listen to it and tell me what you think?
Why are they so opposed to releasing the gses? It seems that a lot of lobbyists, MC, SM, MBA, ABA, NAHB, NAR, to name a few, want the GSES' to be "fixed" by making their guarantee EXPLICIT INSTEAD OF IMPLICIT!
Clearly the IMPLICIT GUARANTEE with 1st Loss Private Capital, is in the best interests of the Federal Government and the taxpayer.
Think how much better the gses could respond to help with the US Housing Market, if they WERE NOT IN GOVERNMENT CONTROL!
YET THE NAR, ALONG WITH THE NATIONAL HOME BUILDERS ASSOCIATION, THE MBA AND ABA, JUST SENT A LETTER TO SM BEGGING HIM TO KEEP THE GSES UNDER CONTINUAL GOVERNMENT CONTROL!
If you pay dues to the NAR, send them an email that you oppose their political policy on this issue and that a PRIVATE GSE WILL BE ABLE TO RESPOND QUICKER AND MORE EFFECTIVELY TO RAPID CHANGES IN THE US HOUSING MARKET THAN GSES CONTROLLED BY THE GOVERNMENT!
Justice Neil Gorsuch on the meaning of the Separation of Powers Doctrine!
Look at the continual falling SUPPLY of the US Housing Market (according to the NAR, 6 months supply is equilibrium):
2019 September 3.9
October 3.9
November 3.9
December 3.6
2020 January 3.5
February 3.2
March 3.6
April 3.9
May 4.5
June 3.7
July 2.8
August 2.8
September r 2.5
October p 2.4
You don't need a PhD to know what happens next to home prices, this will further contribute to a positive impact on earnings and CAPITAL!
https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
So wouldn't a consent Decree be between MC and the gses, why or how would SM be involved?
I know but doesn't it look like MC is setting the table for release, and knocking down barriers of concern by Treasury to allow for an exit from the 12+ year "conservatorship"?
Or are my rose colored glasses on too tight?
SM, DON'T TAINT YOUR LEGACY BY PERPETUATING THE NATIONALIZATION OF TWO PRIVATE CORPORATIONS!
Insightful analysis, thanks! I think it gives lots of flexibility when creating a roadmap or blueprint for exit from government control.
I believe so, that coupled with the Liquidity Rule should allow SM to feel more comfortable making his next move, if he does, and at a minimum he will need to raise the $45B cap!
Happy birthday broo and Chag Urim Sameach!
Looks like somebody's buying, and WHY NOT, things haven't been this interesting in the last 12 fricking years!
Good points! There are soooo many good reasons to finally fix this last remaining unfinished business from the Great Financial Crisis of 12+ years ago!
It's also item #3 on FHFA'S 2019 STRATEGIC PLAN:
PREPARE FOR THE EVENTUAL EXIT FROM CONSERVATORSHIP.
https://www.fhfa.gov/AboutUs/Reports/Pages/2019-Conservatorships-Strategic-Plan.aspx
I know here's at least 2 reasons JB DOESN'T WANT THIS GOVERNMENT FIASCO FOR HIS ADMINISTRATION TO DEAL WITH:
1. It makes many of his long term friends involved with this (e.g., Jim Parrot and many others) not look very good when wielding governmental power around by Nationalizing companies.
2. Let SM and MC finish this last unfinished chapter from the ugly GFC! His administration can focus on other issues.
https://www.fhfa.gov/mobile/Pages/public-affairs-detail.aspx?PageName=FHFA-Announces-2021-Affordable-Housing-Goals-for-Fannie-Mae-and-Freddie-Mac.aspx
Didn't Charlie say JB's only concern was that affordable housing policy remain intact?
Thanks, these are interesting times, and I can't remember things moving so quickly ANYTIME during the previous 12+ years, can you?
Seems like we have a lot of feathers in our cap:
1. Possible positive SCOTUS ruling.
2. Probable amendment to the PSPA that could do more than just raise amount of retained earnings allowed to be retained by the two entities in "conservatorship".
3. A deadline for the current administration to fulfil what they said they were going to do 4 years ago.
4. An outstanding housing market.
5. A SM and MC who have broadcasted to EVERYONE what indeed they MIGHT DO administratively.
Maybe I will move some dry powder over....
You Go, Charlie, enlighten the masses!
It was a beautiful day, the sun beat down
I had the radio on, I was drivin'
The trees went by, me and Del were singin'
Little runaway, I was flyin'
Yeah, runnin' down a dream
Never would come to me
Workin' on a mystery
Goin' wherever it leads
I'm runnin' down a dream
Felt so good like anything was possible
I hit cruise control and rubbed my eyes
The last three days the rain was unstoppable
And it was always cold, no sunshine
Yeah, runnin' down a dream
Never would come to me
Workin' on a mystery
Goin' wherever it leads
I'm runnin' down a dream
I rolled on, the sky grew dark
I put my pedal down to make some time
And there's something good waitin' down this road
And I'm picking up whatever is mine
Yeah, runnin' down a dream
Never would come to me
Workin' on a mystery
Goin' wherever it leads
I'm runnin' down a dream
Yeah, runnin' down a dream
Never would come to me
Workin' on a mystery
Goin' wherever it leads
I'm runnin' down a dream
That's right, so how is the CAP RULE RELATED TO THE CRP?
Was that a 155,000 buy order, jps conversion was that you?
You must pay the rent
I can't pay the rent...
Sure would like to see more of the 11,000 documents! I'm sure during Steve Mnuchins call with Hank Paulson and Jack Lew this Summer, Hank and Jack said, "I'm innocent, I tells ya!"
SM HAS THE POWER TO END THIS MOST UNFORTUNATE GOVERNMENTAL FIASCO! If SM does NOTHING, he and this Administration will likely be judged through the lens of time as ineffectual and border line incompetent!
Do the right thing Steve, like the Senator just told you, "I hope you do ADMINISTRATIVELY, what needs to be done to end this last UNFINISHED BUSINESS OF THE 08-09 FINANCIAL CRISIS!"
https://www.rollingstone.com/politics/politics-features/newly-released-documents-show-government-misled-public-on-fannie-freddie-takeover-203285/
I think SCOTUS gets it, let's see what they do, in the meantime build capital via retained earnings!
Maybe a dynamic total that could slide up or below that amount depending on the total amount required each quarter per Cap rule. Could SM cancel the warrants, do a commitment fee\LOC, AND some type of REASONABLE payment terms on the $187B "loan"?
Wouldn't it be unusual for the current administration to allow the new administration, to whom they seem very idealogically opposed, $20-30B/year?
What do you think will or won't be in an amendment?
That's interesting thanks for the quick link. What do you think the likelihood of SM doing a Line of Credit at Treasury with a commitment fee?
At a minimum we know he is very likely to lift the earnings cap from $45 B to where? with a PSPA Amendment, how would or could that likely work?
He talked about a blueprint, everyone knows JB isn't going to follow the Trump housing plan from last year.
By blueprint, could SM mean with the gses hitting certain capital levels through retained earnings and or capital raises that the amount owed on the PSPA would decrease?
What do you or anyone think about this?
Can't believe SM ACTUALLY THINKS 2 PRIVATE COMPANIES SHOULD CONTINUE TO BE NATIONALIZED BY THE GOVERNMENT! Maybe he's trying to be the Secretary of Treasury for VENEZUELA! Unbelievable!
"This is a top 10 priority!"
"Maria we need to get them out of Government Control!"
Wow! And I thought this administration was different than all the rest!
The more that things change, the more they stay the same!
Just read it, PERFECT and I thought your comments were SPOT ON! I guess whenever you have a longer post, I should have fit it in with 2 posts (a regular post and then reply!). Thanks, I am still learning all this fancy technology stuff!
Because Collins in the 5th Circuit was a Victory in the sense that they ruled that the NWS WAS AN UTLTRA VIRUS ACT OF A FEDERAL OFFICIAL (i.e., the "Conservator") and ruled that the HERA is unconstitutional because it has a Director that is insulated from POTUS control.
The 5th Circuit EnBanc court ruled that Collins is ONLY entitled to PROSPECTIVE RELIEF and therefore IS NOT ENTITLED TO HAVING THE ULTRA VIRUS ACT OF THE "CONSERVATOR" VOIDED AS Collins wanted (i.e., RETROSPECTIVE RELIEF) on the Constitutional Question.
So Thompson appealed to SCOTUS (who is the only court that is likely to be able to end this most unfortunate governmental fiasco!) to determine simply if retrospective relief IS an available remedy in this case. Hence, Sotomayor and Kagan and tons of other Judges below are like, "So f'ing what who cares if the Director was fireable at will or not by POTUS, they likely would have screwed your client over anyway!" Thompson's like, "We don't have to create "But-for" worlds and second guess what the constitutionally valid director would have done. Give my client some f'ing relief! You think my clients are f'ing paying me over 7 figures for PROSPECTIVE RELIEF ONLY? C'mon man!"
So USSCT ruled in Seila that RETROACACTIVE RELIEF IS APPROPRIATE for the same constitutional infirmity as Collins suffered here, BUT WHAT IS THE APPROPIATE REMEDY? WHERE DO YOU UNSCRAMBLE THE EGG? WHEN DID THIS UNCONSTITUTIONALLY INSULATED DIRECTOR START DAMAGING COLLINS?
This is why they could easily end the nws, cancel the spsa, and do other appropriate relief to put Collins back in the position they were in BEFORE THE UNCONSTITUTIONAL GOVERNMENTAL OFFICIAL STARTED USING HIS UNCONSTITUTIONAL POWER!
So the facts are a little different here and I think they picked Seila and Collins around the same time as they both can strengthen POTUS powers under the Unitary Executive Principle.
I don't think the 9 US Supreme Court Justices are buying the governments version of the true facts here do you?
The Net Worth Swipe and 12+ year "conservatorship" is nothing more than abusive actions by bad governmental actors, and I think this court understands that.
Why would the USSCT allow 2 private corporations to be NATIONALIZED by governmental actors? Even a very skeptical person should have a hard time believing that.
Thanks, Guido, I appreciate that!
I don't have personal Twitter, Facebook, etc accounts, I only have business accounts.
It looks like 7 comments were made in the WP Editorial Board Opinion Piece, and 6 were helpful, especially the one from Guido!
If you get a chance, let them know what you think!
https://www.washingtonpost.com/opinions/the-case-for-judicial-restraint-on-fannie-mae/2020/12/13/d70841f0-3af8-11eb-98c4-25dc9f4987e8_story.html
If the Separation of Powers Doctrine means anything, it is designed to protect If the Separation of Powers Doctrine means anything, it is designed to protect individuals from the abusive and coercive effects of governmental actions on its citizens. Are you aware of any citizens liberties that have been violated by the 3rd Amendment Sweep and the legally contested 12+ year "Conservatorship"? I and 10's of thousands of Regular Joe's (e.g., Austin, TX Firefighters Retirement Fund, small Community Banks across the USA, etc.) are among those hard working Americans and retirees who have been the victims here.
Why not have the SCOTUS send a powerful message to the Legislative Branch by invalidating HERA in its entirety as a disincentive for Congress NOT to experiment with creating novel forms of government that can infringe on the Citizens Liberties as is the case here?
If Congress knows they can keep experimenting with ways to decrease Executive Authority over the 4th Branch of Government, knowing that the USSCT will fix their experiments on the American population by simply REWRITING AND amending their Unconstitutional Statutes, why should Congress even bother to follow the US CONSTITUTION?
Unlike Dodd Frank, HERA impacts mostly the gses only. Lastly, although the gse situation is hard to pick up on the fly, some basic facts should be understood:
1. I think Bill Ackman's (portrayed by Senator Warren and the Media as the "Evil Hedge Fund Guys"/"Evil Bankster") average cost per share is approximately $4/share.
2. But for, Mr. Ackman, Regular Joes like I and tens of thousands of other shareholders who have had their financial interests, as Chief Judge Roberts said in this case, "Wiped Out", do not have the millions of dollars necessary to litigate a case against the US government, who has virtually unlimited resources, has fought a vigorous defense including but not limited to what appears to be perjury by a high ranking former FHFA official, invoking "Executive Privilege" and "National Security" roadblocks, resisting settling with Plaintiffs, and other bad actor characteristics.
3. The gses federal government regulator stated the gses were in good financial condition a weeks prior to Hank Paulson, according to Judge Margaret Sweeney, making the gse Board of Directors an "offer they can't refuse!".
4. Jim Parrot (who is apparently advising Joe Biden on housing policy), while working at the United States Treasury (where 99% of their profits from 2012 to today are located) in 2012, emailed his "fellow travelers", that the government will "salt the Earth with their carcasses" and announced the August 17, 2012, net worth Sweep, which is the subject of this litigation.
5. ALL the conservatorships I have ever heard of are temporary and not suppose to last 12+ years, much less send 99% of their wards profits to solely benefit the conservator. Isn't a conservators job to conserve and preserve the assets of its wards?
6. Many regular Joe investors in the gses invested in the gses because they like the Mission of the gses, to help low and moderate income Americans attain the American dream AND receive a fair return on their private capital!
https://www.washingtonpost.com/opinions/the-case-for-judicial-restraint-on-fannie-mae/2020/12/13/d70841f0-3af8-11eb-98c4-25dc9f4987e8_story.html
Heres the link to the article, I JUST TRIED AGAIN to post a comment under the Comments Section, I logged in and pasted my post on the blank box where I am suppose to and then hit the blue rectangle that says POST, and nada, zip, nothing!
Somebody needs to tell all these Major Dailies, the REAL STORY, or they will continue with the False Narrative that only the Evil Hedge Fund Guys are going to win in the Collins case.
So leave a comment if you can, or better yet copy and paste what I wrote and POST IT IN THE COMMENT SECTION!
This information ain't doing no good on this limited audience here on ihub web site and we need to let the major dailies know that there is more to this story than the old, insolvent bank needs government to bail them out and only the evil banksters are going to win here at everyday peoples expense.
Well, historically speaking, the twins have had a checkered past of using their deep resources of cash and political power, I believe starting with David Maxwell and Jim Johnson (he recently passed away and his obituary can be viewed at WP or NYT) and ending with Franklin D. Raines (FDR-I shit you not!) to resist at every turn the notion that a monoline insurance company needs to be regulated.
OFHEO, with its weak regulatory function, was toothless according to some critics, and the twins, just like the tbtf banks liked it that way. I mean who WANTS to be regulated by the government?
Of course all that changed with the 2008 Great Financial Crisis, HERA, and a public perception that the "evil banksters" caused the GFC.
So, the twins have gone from a toothless regulator to being extremely regulated and as the years go by, the tbtf banks and gses will chip away at these onerous regulations and some day, I don't know when there will likely be another financial crisis. Wash, Rinse, Repeat!
You know, I think a powerful argument could be that but for the gses sucking up ALL those toxic mortgages during the GFC, it COULD have been a Great Depression! Look what they did in March 2020.
So, they need to have Capital to help prevent financial calamities in the future, NOT give all their capital away. Good thing we have a "conservator" to conserve and preserve their capital...haha
Guido, I tried yesterday and today (6x) unsuccessfully, to post a comment to the Editorial Board of the Washington Post Opinion Piece posted in the latest hit piece with the evil hedge fund guys narrative, etc. I am trying to post this but am unable to, can you or someone else on the board copy and paste and post it? Or do you think we should edit it some?
I think MOST (if not ALL) of the major dailies keep pushing the narrative that the rich evil hedge fund guys will be the "winners" here, they should know that Regular People, Small Community Banks, Municipal Workers Pension Funds, et.al, have been, as Chief Justice Roberts said, "Wiped Out", by the governments nationalization of two privately owned Fortune 50 corporations.
Here's what I wrote:
If the Separation of Powers Doctrine means anything, it is to protect individuals from the abusive and coercive effects of governmental actions on its citizens. Are you aware of any citizens liberties that have been violated by the 3rd Amendment Sweep and the legally contested 12+ year "Conservatorship"? I and 10's of thousands of Regular Joe's (e.g., Austin, TX Firefighters Retirement Fund, small Community Banks across the USA, etc.) are among those hard working Americans and retirees who have been the victims here.
Why shouldn't the SCOTUS send a powerful message to the Legislative Branch by invalidating HERA in its entirety as a disincentive for Congress NOT to experiment with creating novel forms of federal agencies that can infringe on the Citizens Liberties as is the case here?
If Congress knows they can keep experimenting with ways to decrease Executive Authority over the 4th Branch of Government, knowing that the USSCT will fix their experiments on the American population by simply REWRITING AND amending their Unconstitutional Statutes, why should Congress even bother to follow the US CONSTITUTION?
Unlike Dodd Frank, HERA impacts mostly the gses only.
Lastly, although the gse situation is hard to pick up on the fly, some basic facts should be understood:
1. I think Bill Ackman's (portrayed by Senator Warren and many Media Outlets as the "Evil Hedge Fund Guys"/"Evil Bankster") average cost per share is approximately $4/share.
2. But for, Mr. Ackman, Regular Joes and I and tens of thousands of other shareholders who have had their financial interests, as Chief Judge Roberts said in this case, "Wiped Out", do not have the millions of dollars necessary to litigate a case against the US government, who has virtually unlimited resources, has fought a vigorous defense including but not limited to what appears to be perjury by a high ranking former FHFA official, invoking "Executive Privilege" and "National Security" roadblocks, resisting settling with Plaintiffs, and other bad actor characteristics.
3. The gses federal government regulator stated the gses were in good financial condition a week or so prior to Hank Paulson, who according to Judge Margaret Sweeney, made the gse Board of Directors an "offer they can't refuse!".
4. Jim Parrot (who is apparently advising Joe Biden on housing policy), while working at the United States Treasury (where 99% of their profits from 2012 to today are located) in 2012, emailed his "fellow travelers", that the government will "salt the Earth with their carcasses" and announced the August 17, 2012, net worth Sweep, which is the subject of this litigation.
5. ALL the conservatorships I have ever heard of are temporary and not suppose to last 12+ years, much less send 99% of their wards profits to solely benefit the conservator. Isn't a conservators job to conserve and preserve the assets of its wards?
6. Many regular Joe investors in the gses invested in the gses because they like the Mission of the gses, to help low and moderate income Americans obtain the American dream while ALSO getting a fair return on their shares.
Sure, $30B or $124B or hell if they want technically they could say we can't figure out where the damage to the Plaintiff from the unconstitutionally insulated director 1st began, AND SINCE THE SEPARATION OF POWERS DOCTRINE IS TO PROTECT THE CITIZENS LIBERTY WE WILL INVALIDATE THE SPSA, but order the twins to return the $187B the UST "loaned" them!
You know ust could have settled for $30B here, shortly after the 5th Circuit EnBanc decision, but instead choose to roll the dice on the USSCT.
Well it is hard to know for sure, but given that the word, NATIONALIZED and Nationalize were used 20 times in the orals (I actually did a word count), and it appears that most of the Justices, including Sotomayor and Breyer believe it happened, I mean I think if you are a SCOTUS Justice, you would be open to unscrambling the egg and figuring out how to put the Collins Plaintiffs in as good a position as they would have been before the Net Worth Swipe and possibly the 12+ year "Conservatorship"!
The only caveat I might add is that Judges tend to prefer two disputing parties to figure it out between themselves and typically will point out the weaknesses in each other's case, here, the Acting Director apparently fireable at will (although POTUS has to choose 1 of 3 from MC'S Handpicked choices AND apparently OB didn't think he could fire DeMarco) and the blatant Nationalization of 2 private corporations by the government!
So, IF the Justices were in essence pointing out weaknesses in each parties case, not really believing that they are winning/losing arguments, but instead were said solely as a means to get two parties to settle (5%-10% probability), then reading the tea leaves is futile in that case, which I don't think is very likely at all.
But overall, I am very pleased with the stature of the case, and finally hearing the word Nationalize coming, for the 1st time in recent memory from the lips of more than a majority of the USSCT JUSTICES, was music to my ears!
You know that Gorsuch and Thomas want to use THIS CASE as a vehicle to overrule Humphrey's, BUT CAN THEY GET 3 MORE!
I mean, these Justices have to literally wait for a case like this to fall in their laps, and another one may not come along again in their lifetime and I would imagine that it might give you some type of legacy, almost immortality to be the USSCT JUSTICE THAT OVERRULES HUMPHREY'S EXECUTOR!