Luke 532

"Where we are now at conservatorship should end at some point." -Watt during Q&A

Notable exchange during Q&A... Audience member: "A true public servant talks himself out of a job." Watt: "I'd be in favor of that. It would be a blessed day."

Watt's remarks... http://www.fhfa.gov/Media/PublicAffairs/Pages/Prepared-Remarks-Melvin-Watt-at-BPC.aspx

I hope you all are listening to Watt. He's making a case to end it. He hasn't mentioned "release" but he's beating around the bush big time. It was pretty clear by his comments that he wants the conservatorship to end. Very solid speech. http://bipartisanpolicy.org/events/address-by-fhfa-director-mel-watt/ Will post the transcript once it's available.

More of the same in terms of arguments from the government. Seems to be a weak response to Steele's arguments... Posted with permission from: Peter A. Chapman / peter@bankrupt.com / (215) 945-7000 Three documents were delivered to Judge Sleet this evening: (A) FHFA, Treasury, Fannie and Freddie delivered their Opposition (Doc. 27) to the Delaware Plaintiffs' request to certify the question about the legality of the Net Worth Sweep under Delaware and Virginia corporate law to those states' courts, arguing that nothing the state courts will say would be dispositive of anything because the Net Worth Sweep is perfectly legal because it was the Government that injected billions of dollars into the GSEs, and the novelty of that situation is what justifies it; (B) Treasury's Reply (Doc. 28) in support of its motion to dismiss the Delaware Plaintiffs' Complaint, arguing again HERA bars you from suing us, federal law trumps all state law; and Judge Lamberth's decision is all anybody needs to read; and © FHFA's Reply (Doc. 29) in support of its motion to dismiss the Delaware Plaintiffs' Complaint, echoing the arguments made in Docs. 27 and 28. 15-00708-0028.pdf 15-00708-0027.pdf 15-00708-0029.pdf

Yes and yes. Although, I would temper our enthusiasm because it's still possible for us to lose the summary judgment on the merits... Understood. Thanks for the response, merkhet.

Do I understand this correctly? Please correct me if I'm wrong. (1) If the government does produce an administrative record they contradict what they said in Perry/Lamberth. In that case they claimed that they did not compile an administrative record in regards to the Net Worth Sweep. (2) If the government does not produce an administrative record they open themselves up to a possible (probable?) summary judgement by Reade. Do I have it right? Are both of these statements true?

Great article... FNMA/FMCC Plaintiffs Defeat FHFA Motion To Dismiss For Reasons Not Immediately Apparent http://seekingalpha.com/article/3891416-freddie-fannie-plantiffs-score-judicial-coup?app=1&auth_param=c78o:1bbrk64:a7a6e30dbbe7113d460b4070f425c8b1&uprof=44#alt2

Ha! I'm not sure anyone would have ever called me not bullish on Fannie. :) merkhet has always been bullish. I think you have him confused with somebody else. Being cautious, as we all should be, does not mean one is neutral or bearish... it simply means one is wise. Whoa now... let's not get ahead of ourselves! I'll take the cautious label, though. Haha! You deserve both titles, my friend.

Ha! I'm not sure anyone would have ever called me not bullish on Fannie. :) merkhet has always been bullish. I think you have him confused with somebody else. Being cautious, as we all should be, does not mean one is neutral or bearish... it simply means one is wise.

Posted with permission from: Peter A. Chapman / peter@bankrupt.com / (215) 945-7000 Under seal, the Saxton Plaintiffs filed their Amended Complaint in the Northern District of Iowa yesterday. Shortly thereafter, Chief Judge Reade denied FHFA and Treasury's Motions to Dismiss the original complaint as moot. Magistrate Scoles entered an order today directing Treasury and FHFA to file an Administrative Record by Mar. 10, 2016. A copy of Magistrate Scoles' order is attached. 15-00047-0062.pdf

Lawsuit filed in Illinois (attached) challenging the NWS. 16-02107-0001.pdf

There's no logical reason to waste energy via emotions on what should or should not be. I have my large position and will wait for the results, all the while sparing myself (as best as I can) from the emotional torture that most investors/traders willingly subject themselves to.

Posted with permission from: Peter A. Chapman / peter@bankrupt.com / (215) 945-7000 Public versions of the Government's Notice of Apparent Violation, Fairholme's Response, and the Government's Reply (Docs. 285, 286 and 290) are attached to this e-mail message. Luke 5:32's comment and inclusion of the excerpt below... From the gov't basically saying "we've got nothing but we're fishing for reasons to delay/dismiss": The government’s information about this incident is only that the website erroneously reported that Mr. Parrott invoked his Fifth Amendment right against self-incrimination. As contemplated by paragraph 16 of the Court’s protective order, we promptly reported the available facts to the Court. Although we acknowledge the Court’s statement that the information we provided in the Notice is insufficient for the Court to determine that a violation occurred, at this time we have no further details to report. Should further details become available, we will promptly notify the Court. 13-465-0295.pdf 13-465-0296.pdf 13-465-0294.pdf

Dear Shareholder, Bruce Berkowitz, Fairholme Capital Management's Founder and Chief Investment Officer, will host a one-hour conference call on February 23, 2016, at 11:00 AM EST. Please click here to view the full press release. The format of this call will mirror that of last year’s: Mr. Berkowitz will provide commentary on investments while responding to comments and questions submitted in advance by the public. Fairholme will accept questions and/or comments until Friday, February 19 at 5:00 PM EST. All topics for discussion may be submitted electronically to Ask@fairholme.net. Please note that submissions will remain anonymous. Participants are encouraged to access and review recent commentary and topical postings, as well as the live stream details, by visiting www.FairholmeFunds.com. U.S. and Canada Toll-Free Dial-In: (877) 519-3624 UK Toll Free Dial-In: 0800 169 8546 UK Local Toll Dial-In: 0203 107 0279 International Toll Dial-In: +1 (614) 452-4313 Conference ID: 8183975436 The conference line will open 10 minutes prior to start time. A transcript of the call will be edited for clarity and made available after the call. Kind regards, Investor Relations

Posted with permission from: Peter A. Chapman / peter@bankrupt.com / (215) 945-7000 Judge Sweeney released a copy of her sealed Order (Doc. 287) dated Jan. 26, 2016, this afternoon, and a copy is attached to this e-mail message. So now we know that: -- Doc. 285 was a the Government's Notice of Apparent Violation of the Protective Order; -- Doc. 286 was Fairholme's Response to that filing; -- Doc. 291 was the Government's Reply that Response; -- Mr. Parrott was deposed on Jan. 20, 2016, and his lawyer instructed him not to answer multiple questions; -- Judge Sweeney okayed Mr. Parrott correcting the record that he did not invoke his Fifth Amendment privilege; and -- Judge Sweeney will be issuing an order in the future determining whether the Protective Order was violated. 13-465-0292.pdf

The market is asleep when it comes to the GSE's, which is fine by me. It will wake up in a panic (in a good way for shareholders) when the seemingly inevitable comes to pass.

"Indeed, newly discovered evidence – which shows the government’s defense to be outright false – was subsequently presented..."

I wonder why Fairholme agreed to this lengthy timeline. Anybody have thoughts on that? March 2017 if everything goes as planned (and it rarely does) seems a bit extreme to establish jurisdiction.

Source: Peter A. Chapman / peter@bankrupt.com / (215) 945-7000 (contents and contact info shared with Mr. Chapman's permission) Fairholme and the Government delivered their Joint Status Report to Judge Sweeney late last night, and a copy of that filing is attached to this e-mail message. The proposed schedule starts with resolution of Fairholme's Motion to Compel (Doc. 270 filed Nov. 23, 2015). The Government filed its Response (Doc. 284) to the Motion to Compel under seal on Jan. 21, 2016. Absent a request for more time, Fairholme's Reply is due by Feb. 1, 2016, and is likely to be filed under seal. Judge Sweeney will convene a hearing, likely closed to the public, if she thinks that will be helpful, and she'll issue her decision on the appropriateness of the Government's assertion of the deliberative process privilege, bank examination privilege, and presidential communication privilege. In response to Judge Sweeney's ruling on the Motion to Compel, Fairholme will receive whatever her order says the Government should turn over. When discovery is wrapped up, Fairholme and the other shareholder-plaintiffs intend to amend their complaints within 45 days. The Government then intends to file an Omnibus Motion to Dismiss the all of the cases before Judge Sweeney 120 days after the amended complaints are filed. Within the 90 days following the filing of the Omnibus Motion to Dismiss, the plaintiff-shareholders will file their responses and objections to the Omnibus Motion to Dismiss. The Government will file its reply in support of its Omnibus Motion to Dismiss within the 90 days thereafter. Then Judge Sweeney will hold a hearing if she wishes and rule on the Government's Omnibus Motion to Dismiss. Assuming discovery draws to a close on Mar. 31, 2016, the timetable would be: -- Amended Complaints filed May 15, 2016; -- Omnibus Motion to Dismiss filed Sept. 12, 2015; -- Responses to the Omnibus Motion to Dismiss filed Dec. 11, 2016; -- Reply in support of Omnibus Motion to Dismiss filed Mar. 11, 2017; and -- Judge Sweeney's decision on Omnibus Motion to Dismiss some time thereafter. 13-465-0288.pdf

I thought merkhet posted it was pushed to the 28th today? It was previously today and got pushed to tomorrow. This was during the filings earlier this week when the gov't filed a motion, Plaintiffs responded within 90 minutes, and Sweeney granted the order the next day. All under seal, of course.

Reminder: Joint Status Report in Sweeney's courtroom due this Friday (29th).

Not sure if this quote is accurate but perhaps cherzeca, merkhet, or other lawyers could chime in... http://www.litigationandtrial.com/2013/04/articles/attorney/pleading-the-fifth-adverse-inferences/ "Thus, pleading the Fifth in a civil case in federal court is never helpful, is rarely harmless, and is typically very damaging — indeed, it’s often fatal to the party’s claims or defenses."

Good read from Fiderer: http://www.fidererongses.com/#!Is-AEI-Laying-Groundwork-For-A-Govt-3rd-Amendment-Exit-Strategy/tffln/569d3bef0cf2d42376d3c906

how do you reject this argument? You can't, which is why we're going to win. Just a matter of time.