Replies to post #768471 on Fannie Mae-No Politics (FNMA)

[kthomp19]

With all due respect KThomp, your list of similarities is pure speculation. Other than #3, the rest are NOT similarities until they happen.

Which list are you talking about?

One list was about Treasury's actions during the AIG resolution:

1) Treasury is willing to take a 92% common share stake in a company.
2) They converted their preferred shares rather than write them off.
3) They didn't fear any lawsuits.
4) They were not forced to consolidate AIG's balance sheets onto the government's.
5) The conversion did not kill outside investors' willingness to buy the shares.
6) They agreed to vote their shares in proportion to non-Treasury shareholders, effectively removing Treasury's voting power and avoiding any problems regarding a controlling interest and such.

Everything on that list is a fact. Perhaps #3 can semantically be viewed as speculation, but Treasury clearly didn't fear lawsuits enough to prevent them from converting their preferred shares to commons so in essence it is correct.

The other list was in the post you just responded to, about the Starr AIG case:

1) The ruling was that the Fed couldn't take an equity stake, not Treasury (whose authority to do so was granted by HERA).
2) The ruling was overturned on appeal so it got completely vacated. It has no precedential power at all.
3) The damages were for $0 anyway.

All three things on that second list are hard facts, but the second item is the only important one. From the CAFC's appeal opinion, page 3:

We therefore vacate the Claims Court’s judgment that
the Government committed an illegal exaction and re-
mand with instructions to dismiss the equity-acquisition
claims that seek direct relief. We affirm the judgment as
to the denial of direct relief for the reverse-stock-split
claims.

That means Wheeler's entire opinion was vacated and has no precedential power. It should never be cited at all, let alone in connection to FnF, because not only did Starr win merely a Pyhrric victory at the district level (finding of illegal exaction but $0 in damages), even that little bit was taken from him on appeal.