Replies to post #691560 on Fannie Mae (FNMA)

[amelia43]

Ok. So what are you saying?

[955]

Plaintiff attorneys motive differs from that of plaintiffs.

Not sure why the attorneys for plaintiff have never challenged the use of banking laws (HERA) to regulate insurance companies (FnF). This is the heart of FnF conservatorship problem. Unless this blatant violation of legal principles is resolved, there is no judicial solution. Shareholders of Insurance companies can never get any justice under Banking laws.

You hit the nail! Banking laws are there primarily to prevent a run on bank deposits in times of economic turmoil. Insurance companies do not share that same risk. Whoever applied banking laws to insurance companies did not have a clear understanding of how insurance companies work or were just trying to cut corners.

[Donotunderstand]

Does happen

Although plenty of deaths of equity were created out the core company stupidity and greed (and of course golden parachutes)

[clarencebeaks21]

BCDE,
“Not sure why the attorneys for plaintiff have never challenged the use of banking laws (HERA) to regulate insurance companies (FnF)”

I don’t know that HERA is “banking law”. HERA covers Government Sponsored Entities, which is a term defined very specifically. At this time the GSEs under HERA are the Federal Home Loan Banks (FHLBs), FNMA and FHLMC.

The FHLBs are not necessarily fundamentally dissimilar, either. In the GFC the Seattle FHLB bank effectively fell into a zone of insolvency. So, it was merged administratively into the Des Moines FHLB. How did it fail? Seattle FHLB had too much book exposure with a single partner you may have heard of: Washington Mutual.

[955]

Hank Paulson, ex-GS CEO, used iron fist bank tactics to perform a heist on F&F who were solvent at the time. Replaced BOD's with Gov friendly actors, told original F&F BOD's to accept conservatorship or face receivership. Told President Bush the first sound they'll hear is their heads hitting the floor. This is exactly why hiring bankers into Gov roles is NEVER a good idea. Massive CONFLICT OF INTEREST! Banks have never been on the side of the people. They are ravenous wolves. You and I have to sign Conflict of Interest policies all the time in the workplace, but Gov officials are exempt. Fatal flaw in OUR government.

But Hank&co used every trick and bureaucratic powers to make it worse for his adversaries (like Lehman, ML, AIG, FnF) and favor his cronies. Hank brazenly boasts about this in his book.

The big difference is loan sharks try the tricks within the framework of laws but Hank&co used banking laws (HERA) to violate framework of laws.