Luke 532

MDL panel decision on govt's motion to consolidate cases: denied.

Below is a letter from several housing advocacy and civil rights organizations to Mel Watt... May 31, 2016 The Honorable Mel Watt, Director Federal Housing Finance Agency 400 7th Street, SW Washington, D.C. 20219 Dear Director Watt: Our organizations are deeply concerned that under the Preferred Stock Purchase Agreements with the Treasury Department, the capital buffers of Fannie Mae and Freddie Mac will be completely eliminated by the end of 2017. This course of action is likely to destabilize the housing economy, undermine efforts to make housing finance more accessible and affordable, and drive up the costs of homeownership. In the wake of the 2008 economic crisis, financial institutions worldwide were required to increase their capital reserves. Having reasonable buffers in place is a cornerstone of sound financial regulation, as they protect companies themselves and the overall system from the impact of temporary financial losses. In 2012, however, your predecessor at FHFA and the Treasury Department decided to go in the completely opposite direction with respect to Fannie Mae and Freddie Mac, by sweeping all profits and gradually eliminating their capital altogether. We have heard of no justification for this continued arrangement. Recently, you voiced concerns over the declining capital buffers, and said there could be negative market and policy ramifications if either company is forced to “draw” more money from Treasury – a risk that, as you said, will continue to escalate in the future. We strongly agree with this assessment. As the conservator of Fannie Mae and Freddie Mac, acting in place of the Boards of Directors of the two enterprises, you have the “sole discretion” to declare or not declare quarterly dividends on GSE Senior Preferred Stock. The Housing and Economic Recovery Act of 2008 states that as conservator, FHFA “shall not be subject to the direction or supervision of any other agency of the United States” in the exercise of your authority. Accordingly, we urge you to suspend GSE dividend payments to Treasury, and require the GSEs to develop and implement capital restoration plans so they have enough capital to safely manage their business and to support America’s housing finance system. Thank you for your consideration. We would be pleased to meet with you to further discuss this issue. Sincerely, Amalgamated Bank Center for Responsible Lending Community Home Lenders Association Community Mortgage Lenders of America Corporation for Enterprise Development (CFED) The Leadership Conference on Civil and Human Rights Leading Builders of America NAACP National Action Network National Community Reinvestment Coalition http://www.valuewalk.com/2016/05/fannie-mae-capital-buffers/

What if POTUS refuses to sign off on those documents? Or, even worse, what if POTUS does sign off on the documents and they are found to be false/lying to the courts?

Very nice move!

This is a must watch video. It's great. http://thenationalrealestatepost.com/ny-times-uncovers-fannie-freddie-white-house-scandal/

Somebody somewhere said releasing them and writing about them slowly but surely is best to let each set of documents really sink in. That might be the approach that is being taken and I think it makes sense. Chinese water torture instead of dumping a bucket of water on their head.

Sweeney has entered an order to government to produce hard copies of documents by next Friday.

Makes me sick reading these e-mails. I'm not surprised, just sick. Similar to the scene in The Big Short where Mark Baum is talking with the CDO Portfolio Manager at a Vegas restaurant.

Gretchen Morgenson's latest... How Freddie and Fannie Are Held Captive http://www.nytimes.com/2016/05/22/business/how-freddie-and-fannie-are-held-captive.html?_r=0

Judge orders ethics classes for 'deceptive' DOJ attorneys http://www.washingtonexaminer.com/judge-orders-ethics-classes-for-deceptive-justice-dept.-attorneys/article/2591815

I'll take September, too... circa 2025. ;)

Assuming very conservative (in my opinion) FNMAS prices* in each given scenario, there is still a large margin of value today. *of course, nobody knows what the market will do. 10% chance of affirmance = $0.50 FNMAS price 15% chance of reversal = $10.00 " " 75% chance of remand = $5.00 " " (10% * $0.50) + (15% * $10.00) + (75% * $5.00) = $5.30... or 41% upside from the current $3.75 price. It's an elementary way to look at it, of course, but should give a rough idea to those looking for a back-of-the-napkin calculation.

They probably realize that recap is going to happen, so instead of trying to fight it they are working on the blame game of who will let it happen.

There seems to be notable articles coming out on a near daily basis that question the government's actions. I like where this is headed.

Mel Watt and Eva Clayton were elected to the House from North Carolina at the same time. Here's her piece on releasing the GSE's... http://www.huffingtonpost.com/eva-m-clayton/weve-fixed-fannie-and-fre_b_9821132.html

great quote... I would not rule out reversal, but believe it more likely that the Perry Capital case will be remanded to Lamberth’s court, with instructions to develop a complete administrative record. Remand would allow the net worth sweep to remain in place for a while longer, but it still would not be a good development for the government. It would mean that in both the District Court and Judge Sweeney’s Federal Court of Claims, judges will have opined that facts matter. And if facts matter, what Treasury and FHFA did with Fannie and Freddie in 2012 with the sweep, and currently are doing with the companies in their management of them in conservatorship, at some point will be judged to be illegal. The only question is when.

I'm short the government via my long position in FNMAS. ;)

Yea. The implication is that there wouldn't be a reason to move to Kentucky if he was going to dismiss the original case given that it just means that he'd take on an increased case load, but the alternative theory is he could just dismiss all of them on 4617(f). It's interesting that Judge Thapar mentions in his filing that he agrees with the plaintiff that "justice delayed is justice denied." Image attached.

Interesting filing (courtesy of Peter Chapman): Ms. Robinson advised the JPMDL yesterday that Judge Thapur in Kentucky has indicated he's: (A) ready to rule on the government's motions to dismiss pending in his court if Ms. Robinson's case is not transferred; and (B) happy to oversee the consolidated litigation if the MDL Panel so chooses. A copy of Ms. Robinson's filing is attached. FNMAS_Robinson_4-27-16.pdf

More direct link: http://www.aging.senate.gov/hearings/valeant-pharmaceuticals-business-model-the-repercussions-for-patients-and-the-health-care-system

Audio recording of the recent IU call... http://investorsunite.org/federal-judges-listened-carefully-investors-pressed-case/

K = contract, like Breach of K.

I figured as much. Looking forward to the transcript, if IU produces one.

Hume hinted at it at least twice during the Q&A when discussing opt-in/opt-out options. I must have missed that. What'd he say? I thought he was just talking about the mechanics of breach of K class versus Takings class. I'm probably reading it wrong (I'm biased, after all) but he mentioned one would only want to opt-out of receiving funds directly if, for example, a settlement were reached and you as the shareholder thought you could do better on your own with your own attorney(s).

Hume hinted at it at least twice during the Q&A when discussing opt-in/opt-out options.