Happy to help...
1. How are you going to prove to judge that they didn't need money in 2008?
I am not sure that they might have become insolvent in 2009 with out some help. I know they were not in a liquidity crisis unlike Aig etc.
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Basic accounting. From an operations basis, ie. cash from operations the companies provided generated cash each year from 2008 forward.
It was the mickey mouse accounting charges that were never realized that caused the supposed "deficiency". Problem was it never existed. These two never needed CASH. Follow the Cash. its so simple a 1st year accounting major at a small college like even Yale could understand.
2a. The judge overturns the nws sweep , but then says no damages because you might have become insolvent in 2009 so everything after doesn't matter.
Aig case.
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That judge would be stupid and ignorant. See above, these entities from an ongoing operations created so much cash. It was never ever necessary to put anything in them. A simple proforma financial statement, backing out the cookie jar accounting would show this.
Any forensic accountant; with an honesty and truthfulness could model it. Whether some yahoo judge will believe what they see is another story. Remember most judges used to be lawyers and lawyers aren't typically the smartest business or financial analyst type person in ANY room. They are generally, liberal arts majors with no real skills. That is the risk here. Most lawyers and not technical aptitude or don't care to try to learn it.
2b. With that as precedent, every financial company that got help can later be nationalized by the government and will have to prove that they could have survived 2008 without help. Maybe banks may have to prove they would have not become insolvent in 1933 also.
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I can't help you with 2b. Problem is the greed in government knows no bounds. They really should look at putting apple and amazon in conservatorship. Apple has a lot of phones on the market and a class action law suit for invasion of privacy, since apple could be recording everyone's conversations, would put them in dire straights and put the country at risk. Same for Amazon, their web services company might be spying on everyone and well... that lawsuit might sink them.
3. Yes - I know that the other side doesn't understand that if you keep the aig cases as precedent you discourage private capital. It doesn't seem to have dawned on them that screwing old shareholders is the reason no private capital wants to replace the gse's. (at least not with the same low rewards).
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Of course not. Greedy government has soured many investments. Look at what they did ... look at GM when they screwed the secured debt holders. Remember Secured Debt is supposed to be higher up than preferred equity and they all got hosed. But the unions and government did quite well.
4. Problem is I underestimated the emotionalism ,petty grudges that have trumped basic logic. Sorry!
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Hard to stop greedy people (the government) when the cookie jar is wide open and the judges are out to lunch. Remember the judges should be protecting the rights of the shareholders.
See what i don't get is this... and its really very simple..
if Hera was supposed to take ALL of the rights of shareholders, then why does the stock trade? I mean one basic right of the common and preferred shareholders is the right to receive payment for shares sold and even the right to be able to sell their shares, since when is "All" rights not all.... when the judges say, ALL rights are only some rights, and that's what has occurred. Problem is by the very definition if the stock trades and ALL rights weren't conferred to the government, then what other rights weren't as well. See its really a catch-22.
It's the greedy government that needs to sit down.
Its really that simple.
