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Most likely if he is POTUS at the time of the ruling, in the 1st half of 2021.
But SCOTUS, given their ruling in Seila, last term is about 90% certain to make MC fireable at will instead of for cause, according to at least one veteran court observer.
It's still theoretically possible that they rule HERA invalid in its entirety, rather than scratch out "for cause" and rewrite HERA by inserting "at will". Apparently the Judicial Branch can do a MIND MELD with the US Congress, go back in time to when HERA was drafted and figure out that if Congress was given a choice between "for cause" removal and "at will", they would have chosen the later.
No, I am not making this up either!
I didn't know Kavanaugh had already ruled in favor of the shareholders when he was in a lower court! I didn't like how Kavanaugh jumped immediately to the do no or as little harm philosophy of rewriting (i.e., save the statute) in Seila.
Should make for an interesting 90 minutes!
Pretty heady issues! Professor Epstein said SCOTUS could decide the case even if the parties settle, if they want, I would imagine if it was AFTER orals, they might. Is SM waiting for Congress to leave for Winter break? He is running out of time, but I guess technically they could do it as late as Mid January.
But why would he wait that late and risk throwing MC under the bus by letting SCOTUS allow POTUS to fire him at will?
I believe CEI is a Libertarian Think Tank and vocal critic of the 4th Branch of guvment (i.e., Federal Agencies). Plenty of well written amicus briefs encouraging Humphrey's Executor to be overruled as well as advocates for the Unitary Executive Principle!
I bet Justice Thomas would love to overturn Humphrey's Executor and basically jettison HERA (HE'S NOT A BIG FAN OF REWRITING LEGISLATION AS THAT BELONGS TO CONGRESS).
The question is will some of the other 5 Justices join him? He would need at least 4 others.
I am getting my popcorn ready for December 9th, are you?
Professor Epstein even acknowledged the great deference that Federal Judges tend to give to the federal government (even though they have lifetime appointments). Here, the fhfa/ust actions are so egregious and contra to a free society based on Liberty and personal property rights, many of the ust/fhfas bad acts have been exposed through limited release of discovery documents, and the 5th Circuit EnBanc Judges ruled in favor of the Collins Plaintiffs (with 1 exception-Retrospective Relief, missed it by 1 Judge, and hence SCOTUS).
Despite whether or not SM and the current administration keeps it's 4 year promise to, "get them out of government control", things are looking very good at the Judicial Branch of the government and the end of the nws looks to be closer.
I am looking forward to December 9th, but the SCOTUS hearing is unnecessary if this administration really wants to complete one of its top 10 goals as stated 4 long years ago by SM, AND FINISH THE LAST UNFINISHED BUSINESS OF THE GREAT FINANCIAL CRISIS!
The 5th Circuit EnBanc ruling finally gave us some justice, ruling that the Net Worth Swipe WAS an ultra vires act by fhfa, eventually the nws WILL end! Via settlement or courts, both scenarios likely involve recap via retained earnings, which will take years anyway.
If you were leaving in January for 4 years, wouldn't you want MC to head the fhfa as an independent agency?
Since they have stated from day 1 that they want them out of government control, why NOT do a 4th Amendment, loc, and consent Decree?
I understand, I think we are all disappointed with SM! SM has to know, as a capitalist, just how WRONG THE NWS IS!
If you will recall, early in the pandemic, SM wanted an equity stake (sound familiar) in Boeing, but their ceo wisely said no thanks!
I am quite sure BOTH MC AND SM DESPISE GOVERNMENTAL INTERFERENCE with private markets, BUT, what he and Paulson forget, is that the twins work well, AND THE US GOVERNMENT CAME UP WITH THE PRIVATE CAPITAL 1ST LOSS POSITION/PUBLIC MISSION PARTNERSHIP IN 1968 AND IT KEEPS A $6.6T LIABILITY OFF THE FEDERAL BALANCE SHEET!
True, but had he and MC had more time then recap, release, relist. Today, MC CAN HAVE UNTIL 2024 IF SM SETTLES WITH COLLINS PLAINTIFFS AND SCOTUS DETERMINES THE CASE IS MOOT, AS THE ONLY REASON COLLINS IS IN SCOTUS IS BECAUSE THEY NEED REAL RETROSPECTIVE RELIEF NOT PROSPECTIVE RELIEF!
You are right, SM DIDN'T ELIMINATE THE NWS, LIKE HE COULD HAVE (Political cover?), NOW COLLINS PLAINTIFFS HAVE PROBABLY RAISED THE PRICE FOR SM TO SETTLE AS SM MAY WANT MC TO STICK AROUND UNTIL AS LATE IN MC'S TERM AS POSSIBLE (I hear the Rs and D's differ quite a bit on us housing policy).
But you are still skeptical aren't you? Are you a jps holder only?
Yes, did SM and the current administration say they were changing their mind since then?
If you look at the housing plan and the February 11, 2020 letter from SM and MC, it lays out their roadmap on how to do it.
Amend pspa, consent Decree, loc, etc.
You did read both of them, didn't you?
SM was answering a question specifically about the gses and not generally about the Secondary Mortgage Market.
We will find out before January 20th, whether SM and the current administration was serious about getting the gses out of government control.
If the answer is no, then the courts will have to do it. There is NO WAY to get them out of government control with the Net Worth Swipe in place.
SM: “we gotta get [Fannie and Freddie] out of government control…and in our administration it’s right up there in the list of the top ten things we’re going to get done, and we’ll get it done reasonably fast.”
Well, NOW is the time to end the last unfinished business of the Great Financial Crisis (it's been 12+ years).
Jerome P, yesterday: "I think they should be private".
Steve Mnuchin: "They can be released with plenty of capital through a consent decree".
What's going to happen next?
Shhhhh! "I'm CONTEMPLATING!"
You know SM and MC have had 4 years to decide how to "get them out of government control". I think SM and MC could set the wheels in motion by a 4th Amendment, elimination/modification of the warrants, a sliding loc at ust, and thus keep MC in place and not subject to "at will" removal by JB.
We will know soon enough!
You know they have probably talked about how the "conservatorships" will end and the exit from government control BEFORE MC was nominated for the job of fhfa director!
He could end his "contemplation" as early as Friday after the markets close. I think the likelihood of MC's tenure surviving SCOTUS is slim at best, and a settlement with Collins before December 9th, increases the probability that SCOTUS will not decide Collins.
Was he waiting until after his congressional appearances this week? We will know soon enough!
GREAT POINTS BY THE PANEL, ESPECIALLY PROFESSOR EPSTEIN! I think all of us find it almost surreal that the government has perpetuated the takeover of the gses and their profits for so long!
Thanks for the easy link, and for giving us long suffering shareholders great access to the latest updates on this never ending saga!
The END OF THE NET WORTH SWIPE AND 12+ YEAR "CONSERVATORSHIP" IS COMING, EITHER ADMINISTRATIVELY OR THROUGH THE COURTS!
Quote: "Do you expect anything before the SCOTUS hearing?
How does the FHFA get to an investible security for the capital raise. What are your thoughts about starting to pay out divs to common and JPS?
If the warrants stay unexercised the public common and JPS would be the only cash out the door - is there a way to pay dividends on new issued common and not on existing common? This would seem to violate Delaware Law?
Also - how do they avoid paying divs to the JPS if there is a dividend to a common security?"
1. Definitely Maybe! The Collins Plaintiffs are in a much better negotiating position, as SM may be motivated to keep MC in place for as long as 2024.
2. Consent Decree will do it, setting milestones under a legally binding contract between fhfa and the regulated entities with milestones in place for as long as necessary to get them well capitalized.
3. It would seem far fetched to deplete much needed capital on dividends when you are trying to raise capital.
4. I don't think it's legally possible to bifurcate dividends between new and old commons.
5. I don't think you can pay dividends to common and not now. JPM and MS, the FA'S have had plenty of time to come up with something, we may find out sooner than later!
Did Richard Epstein say if ust and fhfa settle with the Collins Plaintiffs prior to December 9th, that the USSCT would rule on the Constitutionality of the Single Director head of fhfa?
Do you have a link to the Epstein speech, I have enjoyed listening to him over the years!
A consent Decree between fhfa and the regulated entities with milestones in place will allow the gses to exit conservatorship after certain milestones, didn't SM say today, "an eventual capital raise"?
So:
(1) Amend pspa
(2) loc with ust with commitment fee
(3) consent Decree
MC stays on board if they do it before SCOTUS rules.
No surprises here, SM and MC have discussed this over and over again in the administrations housing plan and the February 11, 2020 letter to the SBC.
This would contribute to the current administrations legacy of ending the final unfinished business from the Great Financial Crisis.
Amendments to the pspa and the consent decree actions by ust and FHFA were already broadcast to all lawmakers in their February 11, 2020 letter response to the SBC, and the housing plan from September 2019.
Why would anyone be surprised if they did it?
Plus, SM just said he was in active talks with FHFA and have not come up with anything concrete yet.
4th Amendment, warrant Amendment, and Consent Decree, SM said today that they shouldn't be released from Conservatorship until they are well capitalized, and "perhaps ultimately via a future capital raise" and "we are in discussions now with FHFA".
A Consent Decree can release them from conservatorship, measured by milestones and not the calendar! This would also allow MC to keep calling the shots at FHFA for awhile.
This Katie Porter is a super pain!!!!!!
https://www.cnbc.com/2020/12/01/biden-economic-team-members-shaped-by-hardship-will-focus-on-families.html
Maybe I can convince them to pay me to stay home and paint landscapes for a living!
SCOTUS can eliminate the Net Worth Swipe by finding that an unconstitutionally insulated federal agency directors decision in this situation under an APA Claim IS INVALID and order the repayment of the overpayment back to the gses.
Given the governments past bad acts in hiding the ball (they had billions of reasons to do so), first with the "Presidential Executive Privilege" and "National Economic Security" narrative, then the bogus "may" versus "shall" argument, and finally the "Death Spiral" discredited theory, coupled with Mario Uglietti making false statements under oath, SCOTUS could jettison HERA in is ENTIRETY.
After all, the Constitution of the United States, under the Separation of Powers Doctrine, is designed to thwart this type of abusive and coercive governmental taking of its citizens personal property and protect their Liberty.
So unredacting the governments true intent in taking over these private companies IS RELEVANT and continues the pile on effect of the government as bad actor scenario!
RELEASE THE 11,000 UNREDACTED DOCUMENTS!!!!! Didn't BO tell us he was the most transparent president? Hmmmmmm...
So predictable, Joe Light, Bloomberg, et. al, with their "enriching evil hedge fund guys" narrative. I guess regular Americans pension funds and other hard working Americans don't matter!
And they NEVER report how the rule of law has been totally ignored and the implications of the government NATIONALIZING 2 PRIVATELY OWNED FORTUNE 500 COMPANIES AND THE CHILLING EFFECT IT HAS ON CAPITALISM AND BUSINESS IN THE UNITED STATES! THIS HAS GONE ON FOR 12+ YEARS, SCOTUS CAN END THIS NONSENSE, SO TOO CAN SM WITH THE STROKE OF A PEN!
Isn't it amazing that Joe Light (Bloomberg), Gasbag (Fox Biz), Andrew Ackerman (WSJ), and the endless reporters over the last 12+ years NEVER QUESTIONED THE VALIDITY OF THE NET WORTH SWIPE MUCH LESS INVESTIGATE WHETHER OR NOT THE GSES NEEDED TO BE PLACED INTO CONSERVATORSHIP TO BEGIN WITH!
They very well might if they find out the truth behind some of THE MOST egregious governmental action EVER perpetuated against 2 privately owned corporations!
SM can close these ugly chapters of unadmirable governmental conduct he inheireted, end the last unfinished business from the Great Financial Crisis, and keep his guy, MC in power with the stroke of a pen!
Release the entire 11,000 UNREDACTED DOCUMENTS!!!!!!!
SM and MC have been talking about it for some time, let's see if they can get it done!
2 Signatures for the amendment and 3 for the Consent Decree.
Finishing the last unfinished piece of business from the Great Financial Crisis towards the end of his term, seems like a good feather in SM's hat before he leaves his post as Treasurer of the United States.
We haven't been in this good a position for over 12 years! Interesting times!
Via the courts or administrative action, we are going to get our ownership positions back!
Is the February 11, 2020 response letter from SM/MC foreshadowing of the Next Act?
https://mobile.twitter.com/HoldenWalker99/status/1230896520209354753
But I don't she Yellen rocking the boat if SM and MC do a modification to the pspa, commitment fee, and consent decree, as the mission of the gses is to provide low and moderate income Americans access to low cost housing funds.
Nevertheless, the real Holden has done some great work finding these gems throughout the long checkered years of the Greatest Heist in US History!
Remember, depending on how deep the Justices knowledge is of just HOW BADLY the government has acted here, WITH THE PREREQUISITE BAD INTENT, SCOTUS COULD JETTISON HERA IN ITS ENTIRETY!
GREAT JOB HOLDEN, your sleuthing over the years on this governmental heist is the best! Thank You!
"We got an offer, YOU CAN'T REFUSE!"
What kind of government does that?
Great points! A 4th Amendment, modification/cancellation of the warrants, a line of credit with a committment fee, and a consent decree (which ALL WERE broadcast to the Senate Banking Committee in a UST and FHFA follow up letter to Senator Warner of Virginia in February, not to mention the Housing Plan) seems more prescient now than ever, especially with Senator Crapos desire to finish the last unfinished business of the Great Financial Crisis, coupled with Senator Mark Warner/Sherrod Brown, et.al, not making any comments on what appears likely.
Holden provided a link to his original Twitter post when the letter response of SM and MC to Sen. Warner came out, which I read today, and should be the final set of actions SM makes before going back to LA.
The Federal Reserve will be happy because they know that the GSES will be over capitalized, with Private Capital in a 1st Loss Position and a former head of the FDIC as Chair of the Board at Fannie Mae. The Federal Reserve knows GSE MBS will continue to be a viable option to attempt to influence the long end of the yield curve.
The UST will be happy to (1) keep MC in place, possibly until the end of JB's term (2) see MC via a consent decree keep the GSES on a path to over capitalization (3) finish a pledge he and the administration made 4 years ago, while ending the last unfinished business of the GFC in a way palatable to the Republicans.
I don't see SM negotiating with himself with Congress, which has had 12+ YEARS to determine the future of the Secondary Mortgage Market.
Look for noncommittal and vague political responses from questions lobbed at him by the members in Congress over the next two days.