Replies to post #691975 on Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

(p. 725) In determining the amount of compensation that is just, courts have established the market value of the taken property as the central guide.

(p. 728) The Court considers the prices paid by willing buyers and accepted by willing sellers for comparable property on an open market to be the best evidence of the taken property's market value.


Taken together, these establish that the most that a holder of a publicly traded share can lose via a government taking is the price of that share just before the taking happened.

KT, I think that would be true in Eminent Domain cases (i.e., Real Property versus Personal Property) where the government comes in and takes your land for a public purpose.

Of course, as I am sure you are aware the local government will low-ball the offer price and the individual(s) whose property is taken contests value with his own appraisal.

But here, the US government was privy to inside information (unknown in the marketplace) in terms of both the nws ("the golden years are ahead") as well as the original taking of the gses in 08.

So, legally does the fact that (1) this is personal property and not real property (2) the government was privy to information unavailable to others and (3) the government had regulatory control and subsequently total control over the manner in which the gses booked future loan reserve losses, DTAS, and legal settlements with lenders matter?

[JosephS]

Now do “Good faith and fair dealing” (implied covenant as well in Lamberth)

It still could end up being market prices but also may consider what the other party gained when the two parties froze out the third. (The government being both sides of the transaction freezing out all other ownership claims)