Fannie Mae-No Politics (FNMA)

[kthomp19]

Well, what do you think about the Seperation of Powers issue in CFPB that recently came out of the 5th Circuit Appealate Panel and the DOJ has petitioned for a Writ of Certerrori at the USSCT, it's about invalidating a past agency decision due to the unconstitutional double insulated from Congressional Appropriations Oversight funding for the CFPB in Dodd Frank?

I think it's a strong, viable case, as is the Appointments Clause argument in Rop. However the Supreme Court rules on the CFPB should have a direct read-through to the FHFA in the Collins case given how the constitutional claim in the Collins case was handled pretty much exactly like the one in Seila.

Of course there are caveats:

1) I was wrong about how strong the Collins APA claims and the takings claims cases were. With that track record, one should be skeptical of my opinions on the prospects of Collins and Rop.
2) I've heard a rumor that a prominent shareholder (I forget who) has always viewed all the court cases as losers. It's heartening to know that they still are a significant shareholder despite that.
3) There's always the risk that the Supreme Court just asks the current FHFA Director to ratify past decisions.
4) Even unwinding the NWS only involves a cash payment from Treasury to UST of around $64B if it happened today, and that number goes down by $4.67B every quarter. The seniors would remain intact and could be converted to commons anyway.