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Great quote, Rodney! Will the Jurors ever find this out?
Lamberth never mentioned that the Private Label MBS was the main cause of the Great Financial Crisis or that the GSE'S were required to buy the toxic PLS by their regulator. Or that the NWS required that the tens of BILLIONS in settlements by Private Label MBS banks went directly into the government coffers.
That we've been in a 15 year conservatorship, yet making $20B+ in Net Income should be a major red flag. Oh yeah, nothing to see here!
Problem is Skeptic7 has been right all along! My friend who I had lunch with today, incorrectly said pretty much what Lamberth said and people just want to believe that the twins caused the Great Financial Crisis no matter any evidence to the contrary or how much the GSE's vacuumed up and put on their books all these toxic sub prime mortgages to alleviate the depths of the GFC by being a buyer of last resort and creating and supporting the Secondary Mortgage Market.
But the issue here, is, did the FHFA, Acting in its Capacity as Conservator, Breach the Shareholders Implicit Contract of Fair Dealing when it implemented the Net Worth Swipe!
Hey, are you guys the shareholders of the two companies that brought the whole country to a halt? Is that true? Because I heard a Judge say it the other day, and he was wearing a black robe and sitting above everyone else and people were listening to him!
THE COURT: I mean, these two companies brought the whole country to a halt.
Reminds me of my friend who ran into the same thing the Plaintiffs Attorneys did on Friday.
He told the Judge, "Judge if you're going to try the case for the Government, my client hopes you lose!'
These whole bizarre 15 year CONservatorships are just unbelievable actions by the federal government, first the Executive Branch, then the Judicial Branch!
Lamberth is corrupt.
— MIA (@MIA95629998) August 7, 2023
What kind of a horseshit court does he lead?
We're waiting years for justice of some substance. July '22 case pushed a few months to Oct '22. Ends in hung jury.
We wait several months for another go at it & now this shit.
WTF!#FANNIEGATE $FNMA
Will Lamberth rule against himself? If he does not, it would make for a stronger plaintiff’ case for a mistrial $fnma #fanniegate pic.twitter.com/9vK56SHcN2
— Fanniegate Hero (@DoNotLose) August 7, 2023
Here's the exact transcript of the J. Lamberth sarcastic quip on Friday, from P's request for a curative instruction to the Jurors:
The Court then said the following:
THE COURT: Two quarters after how many years?
THE WITNESS: After three years of large losses. Actually, four
years of large losses.
THE COURT: They turned the world around?
THE WITNESS: Yes.
THE COURT: After two quarters? And everybody should jump
at that. Sorry. I’ll try not to interject. I can’t resist sometimes.
Id. at 110:21-111:4. After Plaintiffs’ counsel asked, and Dr. Attari confirmed, that several
executives had given testimony about sustained profitability, the Court then interjected again:
THE COURT: I mean, these two companies brought the whole
country to a halt. And all of a sudden, after two quarters,
everything’s wonderful?
The Court had previously asked Plaintiffs’ expert witness, Dr. Bala Dharan, a similar but
more neutrally-phrased question on the same topic:
THE COURT: To be fair there, Doctor, that’s a very short period of time
where they were profitable. They had a long period where they weren’t
profitable. Maybe you need to explain to the jury how you project the future
when they had such a long period, when they weren’t profitable.
* * *
THE WITNESS: The housing market – that’s why I showed data on the
turnaround, the housing market, the loading of the credit losses, the
improvement in the credit portfolio that they had. So these are very critical
features. And the fact that the DTA is dependent on making an assessment
on these. It is really the change in the housing market is the most important
information to consider for future profits.
Trial Tr. at 75:2-9.
The comments from Friday August 4, 2023 warrant a curative instruction.
The federal courts are open for all. Do yourself a favor and run it by a member of your local federal bar before filing your Complaint against the Government.
Pretty soon G Fees will be 150 bps to support all the various politically targeted voting base handouts that the POTUS in power can dream of. Keep em in the conservatorships into perpetuity, the tbtf banks will love it! Added bonus? Keeping your major political adversary in the pen adds another 4 years! What a country !
HeeeeeHeeeeee! You know they want to do it. And the Supremes wouldn't do anything, all the FHFA has to say is that it's in the best interests of the public the FHFA serves, right !
Why bother going through the peoples representatives in Congress, right? !
The thing is, in the 1st trial Lamberth said, "...to SAVE US ALL", in a snarky sarcastic way and it came across to me in the audience as being sarcastic and skeptical of the Government's argument that they had to implement the NWS to "save us all.", which would be pro P. Subsequently he said a snarky comment about the "golden age wasn't here yet to make the required payment" which is pro D.
But Jurors remove any conscious or subconscious government bias a federal Judge may have.
This is the Government's defense strategy, confuse, deceive, and last minute trial ambush tactics. Here, they allege that "No one knows for sure the future of the US Housing Market." and that's what I meant when I described the Government's strategy as they present their defense.
But the P's have done a great job explaining the strength of the US Housing Market prior to the implementation of the NWS during their presentation. The latest quarter, 2Q23 shows exactly how a strengthening US Housing Market has a positive impact on Net Income. By August 2012 it was clear that the US Housing Market was on an uptick, Fannie and Freddie both posted rebounding Net Income and 2013's $130B in Net Income posted by 2 Corporations that is unsurpassed to date.
They do show a Slide showing JUST HOW consistent dividends to Shareholders were prior to the takeover by the Government on September 08, 2008.
ZERO Dividends since then and no end in sight after 15 years of CONservatorships.
That's EXACTLY the 1st Slide Plaintiffs Class used right away on Cross of Dr. Attarri on Friday, titled, "Fannie Mae and Freddie Mac Combined: Excess Dividends Paid in 2013".
$111.2 BILLION IN CASH SWEEPS TO UST (Plaintiffs Excellent Attorney on Cross asked Dr. Attarri if he knew that the GSE'S had to borrow the money to pay it!)
This Slide SAYS IT ALL! HAS ANY 2 CORPORATIONS EVER IN THE HISTORY OF THE WORLD EVER MADE $130.1 BILLION IN NET INCOME IN 1 YEAR?
The extent of the theft here is outrageous as our 'dear leaders' hide behind Executive Privilege and National Security Exemptions to disclosure of the truth. The $111.2 B should have been used by the FHFA Conservator to preserve and conserve the Corporations and build Capital!
Also this Slide was shown immediately after the Judge's little quip of, "Yeah, 2 quarters is a turn around!".
I think the Judges little comment may have fired up P on Cross a little as he put up the Slide and continued the Cross with a composed and measured demeanor.
So no nexus could be shown that the US Treasury (an agent of the Government) was an overwhelming factor in the Breach of the Shareholders Implicit Contract with Fannie Mae and Freddie Mac when they implemented the NWS?
Was it a Privity of Contract issue or was UST never listed as a Defendant?
Its been over 10 years that this case was originally filed in the US District Court and I have no idea, do you?
If I did try to access this case on PACER, I imagine all the good stuff is REDACTED as the Government has really hidden the facts from public consumption.
No, a win here is only saying that the FHFA in its acting capacity as the Conservator of the Corporations broke the Implied Contract of good faith and fair dealing between the Corporations and the Shareholders.
Nothing more, nothing less.
Rein in your enthusiasm. The only damages that the Jury is considering is the amount that can be measured with certainty and that is the 1 day drop in share prices on the day the Net Worth Swipe was announced in August 2012. It's broken out per class of stock.
Everything else was deemed too speculative by the court.
These Jurors are a little older than the last group and may see through the shenanigans that the FHFA in its acting capacity as the Corporations conservator engaged in when it implemented the NWS.
We'll find out shortly.
I think a win here would be significant. It would show that the FHFA in its acting capacity as conservator did not engage in fair dealing with the Shareholders when it entered into the August 17, 2012 Net Worth Swipe.
D is still presenting their side of the case. I think Monday, P will finish Cross of Dr. Attarri. Demarco will take the Stand and that may take 1 or 2 days. D may or may not rest then. There also could be more Motions related to Jury Instructions, etc.
Then Closing Arguments from each side, then the reading of the Jury Instructions, then Jury deliberations.
The Government is doing everything it can to sell the 'circular draw' narrative problem, that the size of the UST Commitment was extraordinary, that it wasn't 100% clear the future of the US housing market, that Freddie Mac never said 'golden years' ahead, that the DTA write up wasn't known for sure as a given, that the PCF would have been huge, and the NWS saved the Treasury Commitment and thus calmed the MBS Investors.
The Government has also hidden many of the Smoking Guns from this trial.
Last time it was enough to deadlock the Jurors.
Bro, I just checked my calendar and tomorrow and Tuesday I'm booked, but hopefully someone can get down there and watch and tell us what's going on.
I think by next week, BUT Jack Smith wants a Judge to do some finger wagging to Mr. Donald "His middle name is John" Trump and it does make sense not to make the dozens of people involved in this trial to navigate the logistics.
I think the key to this case is to get the Jury fired up about the pure Injustice here to Shareholders and Ms. Davis had them fired up on Day 1.
But has the Gubmint planted enough seeds for the Jurors to believe that their outrageous Net Worth Swipe was foreseeable by the Shareholders, should have been expected, and was necessary to save the US Secondary Mortgage Market?
We'll find out shortly.
The Government is doing their best to paint a picture of Demarco having to make a quick decision as the Treasury Commitment expired on 12/31/12, they were worried about the 'circular draw' problem and that the 'market was getting nervous' that the US Treasury Commitment would run out, no one at FHFA was sure that the DTA would be reversed or that the already booked Accumulated Loan Loss Reserves would be reversed and the future was uncertain.
Susan McFarland said yes the 'golden years' are arriving but Freddie's clueless CFO wasn't exactly sure.
Plaintiffs Class Attorneys have done a great job refuting the Government here, but mortgage banking is a dry dry dry subject and some of the discussions may be going over the Jurors heads. We'll know shortly.
I would imagine the Jim Parrot Salt the Earth with the Shareholders Carcasses memo after 10 years of pre-trial litigation was excluded from trial for legal Evidentiary motions that may have something to do with the fact that UST is not a party in this particular Implied Breach of Contract case and their motivations may not be relevant in a Contracts case against the Corporations and the FHFA in its ACTING capacity as the Conservator, but I haven't looked into it.
Oh yeah, the Jurors have seen the extent of the transfer of funds from the balance sheets of the GSES to the US Treasury coffers.
BUT, da Gubmint Attorneys maintain that IT WAS REASONABLE for Uncle Suggy to implement the NWS due to the extraordinary loan Commitment and the alleged financial precariousness of the GSES in early 2012.
Old Ed will testify soon that he was trying to 'conserve and preserve' the GSES by agreeing to the onerous terms the UST presented him, besides someone on the Hill told him that the US Congress was going to "decide the future of the Secondary Mortgage Market' soon anyway. The Government Attorneys say that the Shareholders should have seen it coming and that the Shareholders are still free to buy and sell their shares.
Shockingly, half the Jurors believed the Government last time.
EXACTLY! Where you there? If any Shareholders are near DC, going to watch the trial shows the JURORS that yes real people were hurt here by the NWS and subsequent 11 years of perpetual CONservatorships.
Personally, I believe that this group of Jurors is better aged than the last ones.
Will it be able to overcome the home court advantage of the Feds? Who knows what the Jurors are thinking.
I don't know if you remember, but MORTGAGE FORGIVENESS was a big issue in 2012 and beyond.
Demarco when he was on the stand last time said he spent a lot of time studying the issue and the Government Attorney was trying to paint this picture for the Jurors that this is possibly why ZERO thought went into the Net Worth Swipe.
Surprisingly, Watt, 'just said, NO!", to mortgage forgiveness.
Don't worry, the Plaintiffs Class Cross Attorney destroyed the US Government's so called "Expert Witness" (the Gubmint had to dig deep to find this obscure Professor willing to suspend belief to reach his Conclusions).
The very 1st Thing he did was show a Slide to the Jurors and 'Expert Witness' showing the EXTENT OF THE THEFT IN YEAR 2013! It was like $111 BILLION ABOVE ANY AMOUNTS THAT WOULD HAVE BEEN OWED UNDER THE 1ST AND 2ND AMENDMENTS.
We'll see if it convinced the Jurors later.
If Congress won't do what the POTUS wants, just use an obscure and broadly written Statute and enrich your targeted voting base for a WIN in November!
"FHFA can do whatever is in its best interests and or the public it serves."
Why not $10,000 in mortgage loan forgiveness? That'll buy some votes come November !
Appropriations Clause? Who cares, right? By the time this gets to the Supremes, my constituents will already have spent the dough!
Amerika, my kinda place !
Another Seperation of Powers alleged Violation by a Federal Agency (Violation of Appropriations Clause-Michael Chenworth told the Secretary of Education it was coming ahead of time!):
https://nclalegal.org/2023/08/ncla-suit-for-cato-and-mackinac-center-contests-bidens-new-student-loan-debt-canceling-scheme/
The US Court of Appeals is located on the floor beneath J. Lamberth's Courtroom in case it goes into extra innings.
As I recall the FMCC Common damages ask was approximately $79 million with simple interest calculated at 6% per annum from August 17 2012 to present day. Divide that amount by what 650m shares outstanding and that's your number.
But don't spend the money yet, Rick's Magic Eight Ball says, "Appeal Very Likely".
Maybe Jim Parrot can sit in the front row of the courtroom holding up his Salt Shaker while Ed Demarco looks the Jurors in the eyes and tells them that the Net Worth Swipe preserved and conserved the GSES and was a proper act of a Conservator !
Stay tooned, as "The Days of our CONservatorships lives Continues......". Que Music, NOW...
We'll find out, it's very likely to be appealed, but I don't think it 'has legs' as some people say. Why? Because the Judge has made a snarky comment about D as well during the trial.
I found out yesterday where this case is going next after the Lamberth courtroom on the 6th Floor. It's on the 5th floor, the US Court of Appeals!
I thought Plaintiffs Class Attorney was pretty sharp on Cross, and that Cross will continue Monday morning.
Then old Eddie's taking the stand to "look at the Jurors straight in the eyes and tell them that the NWS was a proper act of a Conservator", according to the Government Attorney in his Opening Statements.