doughishere

Got a little excited. Didnt have permissions to delete the thread. Will no longer post here. Sorry.

It was a great movie. It was a comedy almost like Wolf of WallStreet but had much more substance to it. Go See it. I will be watching it again.

Start in that novel today. Put some graphite to some paper...you'll only be a year older if you push it off to next year ;)

Anything good in there lately?

I find it a little funny how Senator Corker on Fridays oration can do all the calculations on how much the Hedge funds are going to make but you know turn around and cant figure out how much he made when it comes to paying his taxes....never the less he does fail to mention how much the hedge funds will owe in taxes if/when the Hedge Funds decide to cash out....at his estimated gains. Such is life.

It is indeed weird. Maybe he was just trying to show some progress on his GSE reform work? If this new jump start bill does nothing to intervene the current lawsuits, then it doesn't really do anything. Funny it is called jump start bill. More like a road block bill. It does do something but not what the markets(and @wsj) thinks it does.

Has anyone thought about their new years goal. My goal this year is to find at least one idea I hold strong and destroy it. To quote Charlie Munger, "Any year that passes in which you don’t destroy one of your best loved ideas is a wasted year." More than one would be great. Also, Keep up with hitting the crossfit gym....not pushing it on anyone but it is working wonders.

Why would you even go near saying something like that in an official record?

Word on the street is that this is a direct refutation of the lawyers argument recently filed in the Perry appeal! Mr.Brown is Sherrod Brown, Senator from the great state of Ohio.

Congressional Record December 18, 2015 114th Congress, 1st Session Issue: Vol. 161, No. 185 — Daily Edition https://www.congress.gov/congressional-record/2015/12/18/senate-section Section 702 in Division O Mr. BROWN. Madam President, today I wish to discuss section 702 in division O of the Omnibus appropriations bill. It is a provision that would prohibit the Treasury Department [[Page S8857]] from selling, transferring or otherwise disposing of the senior preferred shares of Fannie Mae and Freddie Mac for 2 years. In 2008, Treasury Secretary Hank Paulson and Federal Housing Finance Agency Director James Lockhart placed Fannie Mae and Freddie Mac into conservatorship and created an agreement that gave the Treasury Department senior preferred shares in both entities. Since that time, the GSEs helped stabilize the housing market by ensuring that families had access to 30-year fixed-rate mortgages at reasonable rates and lenders had access to a functioning secondary market. While the government was initially forced to inject $188 billion into shoring up these two agencies, it has since collected $241 billion. Taxpayers have thus earned $53 billion during the conservatorship. Mr. SCHUMER. Madam President, will the Senator yield for a question? I am concerned that someone could read the provision as limiting a future administration's authority to end the conservatorship after the 2-year prohibition absent congressional action. Does the provision prohibit a future administration from taking any action after January 1, 2018, if it is in the best interest of the housing market, taxpayers or the broader economy? Mr. BROWN. I will say to my colleague from New York that it does not. That is not the effect of the language. Any number of decisions could be made after that date, when a new Congress and a new President will be in place. Nor does this provision have any effect on the court cases and settlements currently underway challenging the validity of the third amendment. As the Senator from Tennessee said yesterday, ``this legislation does not prejudice'' any of those cases. Mr. REID. I associate myself with the comments of the Senator from Ohio, Mr. Brown. If it turns out to be in the best interest of borrowers, the economy or to protect taxpayers, the next administration could elect to end the conservatorship on January 2, 2018. This is the view of the Treasury Department as well. I would like to submit a letter written to me on this issue that states that the provision binds the Treasury only until January 1, 2018, and has no effect after that. The agreement for this language to be included in the omnibus was that the prohibition would sunset after 2 years and not create a perpetual conservatorship. As then-Secretary Paulson described, conservatorship was meant to be a ``time out'' not an indefinite state of being. Madam President, I ask unanimous consent that the Treasury letter be printed in the Record at the conclusion of the remarks by Senator Brown. Mr. BROWN. Madam President, I thank the Majority Leader. The FHFA and Treasury Department could have placed the GSEs into receivership if the intent was to liquidate them. The purpose of a conservatorship is to preserve and conserve the assets of the entities in conservatorship until they are in a safe and solvent condition as determined by their regulator. There being no objection, the material was ordered to be printed in the Record, as follows: Department of the Treasury, Washington, DC, December 17, 2015. Hon. Harry Reid, Democratic Leader, U.S. Senate, Washington, DC. Dear Mr. Leader: In response to your request for our view, the Treasury Department interprets the language of Section 702 of Division O of the Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2016, to mean that subsection (b) imposes a prohibition that is binding until January 1, 2018. It would not be binding after that date. Sincerely, Anne Wall, Assistant Secretary for Legislative Affairs.

Bills of the Week for December 14, 2015 http://docs.house.gov/floor/Default.aspx?data-ipsquote-timestamp=2015-12-14 Click on the link for "House amendment #1 to the Senate amendment to H.R. 2029 (Rules Committee Print 114-39, showing the text of the Consolidated Appropriations Act, 2016)" TITLE VII—FINANCIAL SERVICES Sec. 702. Limitations on sale of preferred stock. Page 1968 of the document. (b) LIMITATIONS ON SALE OF PREFERRED STOCK.— Not with standing any other provision of law or any provision of the Senior Preferred Stock Purchase Agreement, until at least January 1, 2018, the Secretary(MyEdit: Secretary of the Treasury, Sec.702(a)(1)) may not sell, transfer, relinquish, liquidate, divest, or otherwise dispose of any outstanding shares of senior preferred stock acquired pursuant to the Senior Preferred Stock Purchase Agreement, unless Congress has passed and the President has signed into law legislation that includes a specific instruction to the Secretary regarding the sale, transfer, relinquishment, liquidation, divestiture, or other disposition of the senior preferred stock so acquired. © SENSE OF CONGRESS.—It is the Sense of Congress that Congress should pass and the President should sign into law legislation determining the future of Fannie Mae and Freddie Mac, and that notwithstanding the expiration of subsection (b), the Secretary should not sell, transfer, relinquish, liquidate, divest, or otherwise dispose of any outstanding shares of senior preferred stock acquired pursuant to the Senior Preferred Stock Purchase Agreement until such legislation is enacted. Essentially all it does is guarantee that the Treasury has to keep(Treasury secretary can not sell, transfer, relinquish, liquidate, divest or otherwise dispose of the the senior preferred stock) the senior stock until 1) Congress and the President agree to sell the senior preferred(when have they ever agreed on anything?) and 2) or January 1, 2018 comes along and then they decide to do something at that later time.... It says nothing about the lawsuits or the legality of the 3rd amendment, or the Delaware case or anything else with the other current cases. Am I wrong?

Posted over on the Google boards

I really think that the money that has been swept past what the government has been owed past the original 2008 arrangement should be left on Fannie and Freddies balance sheets...If this happened I doubt we'd be having the same conversation.

The key provision on which the government relies is 12 U.S.C.§4617(f), which provides: “(f) Limitation on court action “no court may take any action to restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver.” As the government reads this provision, there is no effective judicial oversight over FHFA ever, which should be treated as a conservator even when its actions are utterly inconsistent with its explicit fiduciary duties. To be sure, this provision makes good sense making sure that shareholders could not “second guess” each and every business decision of FHFA in dealing with third-parties. Unfortunately, that is not what is at stake here: namely stripped assets instead of managing them. As stated in Kellmer v. Raines, the correct rule reads as follows: “absent a manifest conflict of interest by the conservator not at issue here, the statutory language bars shareholder derivative actions” (emphasis added). But in this case, there is a manifest conflict of interest in the self-dealing between FHFA and Treasury. Nor are the shareholders in question bringing a derivative action on behalf of the corporation against any third party. They are suing as direct beneficiaries for breach of fiduciary duty that HERA imposes on FHFA as conservator of Fannie and Freddie. The same approach was taken in Hindes v. FDIC under 12 U.S.C. § 1821 (j), the parallel provision in FDIC on which 12 U.S.C.§4617(f) is model. There the court wrote: “Our interpretation of section 1821(j) only denies appellants the declaratory and injunctive relief they now seek, but does not deny them judicial review for their constitutional claims. Courts uniformly have held that the preclusion of section 1821(j) does not affect a damages claim.” And further, “Courts, however, have recognized a limited exception to a statute’s specific withdrawal of jurisdiction where the plaintiff claims that the agency acted in a blatantly lawless manner or contrary to a clear statutory prohibition.” The above exceptions 12 U.S.C.§4617(f) (found in the very cases cited by the government) make perfectly good sense. The Jacobs plaintiffs are not trying to upset FHFA’s decisions on whether to hold or sell specific assets for the benefit of the shareholders. They are seeking to reverse a blatant set of constitutional violations brought on by the sweep, which was an egregious case of self-dealing. It is indefensible to insist that corporate looting by government falls outside the scope of judicial review. To back up its aggressive claim, the government insists that under 12 U.S.C. §4617(b)(2)(J)(ii) FHFA may “take action that it determines is in the “best interests of the regulated entity or the Agency,” without bothering to mention that this phrase is tucked into an obscure section that only gives “incidental powers” to the Agency. No such ancillary provision can negate FHFA’s bedrock obligations as conservator. The government claim for total immunity is wrong as a matter of statutory interpretation, and wrong as a matter of constitutional law.

Seems everyone is putting in their 2 cents these days.......I was wrong Luke more and more people are starting to get into it.....I can admit when I am wrong. http://www.nakedcapitalism.com/2015/12/the-continuing-fight-over-fannie-and-freddie-and-the-real-problem-of-us-mortgages.html Because I love to editorialize: Its always amazing when one side of the argument essentially says I'm right and this is just the way it is.....something like "similar pieces contain a number of inaccuracies, regarding both the history and the future of the GSEs." but then never states those inaccuracies or tries to correct them. Then when others make arguments they use facts...and footnotes and studies and a whole sort of other mechanisms to...dare I say....support their conclusions or bold statements.

When you say reform before recapitalization its almost as if you acknowledge the money that should be on the balnace sheets of fannie and freddie are being held hostage....and that some how this time its permissible to hold assets hostage.

Pershing on F&F: Fannie Mae (FNMA) / Freddie Mac (FMCC) The GSEs’ continue to show healthy underlying trends in their core guarantee business, which have been obscured by non-cash, accounting-based derivative losses in the GSEs’ non-core investment portfolio. Changes in the value of the derivatives create enormous volatility in the GSEs’ GAAP quarterly earnings, even though they do not have an impact on economic earnings or intrinsic value. Because the net worth sweep does not allow the GSEs to retain capital, it is likely that future accounting-based derivative losses could cause the GSEs to borrow additional funds from Treasury despite having no economic need to do so. This is yet another example of why the Net Worth Sweep is problematic. Since our last call, there has been a growing belief among highly regarded and politically influential groups and thought leaders that the GSEs must retain capital and exit conservatorship. Substantial questions have been raised about the government’s legal justification for the Net Worth Sweep. We encourage you to read Gretchen Morgenson’s December 13th New York Times article on the GSEs entitled: “Fannie and Freddie’s Government Rescue Has Come With Claws,” which can be found here: http://www.nytimes.com/2015/12/13/business/fannie-and-freddies-government-rescue-has-come-with-claws.html?ref=todayspaper&_r=0. 13 Recently, the Community Home Lenders Association and Community Mortgage Lenders of America, two organizations representing the politically powerful community banks, wrote a letter to the White House arguing for capital retention and an end to conservatorship for the GSEs. There have also been reports that the White House is considering various alternatives for recapitalizing the GSEs. Although government officials have denied these reports, we find it interesting that these reports have surfaced amid a growing consensus that a recapitalization of the GSEs is needed. At the end of October, a shareholder of both Fannie and Freddie’s common stock filed suit against the Net Worth Sweep in Kentucky. This case provides another avenue for pressing the case against the Net Worth Sweep in addition to the cases in the DC District Court of Appeals and the Federal Court of Claims. The GSEs underlying guarantee business is in healthy shape, the momentum for capital retention and an exit for conservatorship are growing, and the legal avenues for fighting the Net Worth Sweep have increased.

More: Source of that quote: Voice of Experience: Public versus Private Equity, V. Acharya, C.Kehoe and M. Reyner Sorry....nothing new here

Check this out from the text book:

http://www.shareholderforum.com/access/Library/20131226_McKinsey.pdf Found this in the footnotes to one of my textbooks.

And another side note....I dont get it...These two guys are Obama's guys..."the social progressive guys"....Fannie and Freddie are FDRs Babies and he was arguable the most Liberal president since Lincoln....and Obama is suposed to be the most socially progressive president since FDR........ so to me its fascinating how they want to erase that. You'd think the more conservative hedge funds would be the ones wanting to get rid of Fannie and Freddie....... Please people...I talk a lot of trash and I know it...but there has to be some critiques on what I have to say.

Fixing Fannie and Freddie for Good http://www.nytimes.com/2015/12/15/opinion/fixing-fannie-and-freddie-for-good.html?_r=0 I feel like its one thing to wishfully think that if we get rid of fannie and freddie it opens the door to "healthy competition"...and the economist(one of the guys is a economist at moodys) point of view is that "healthy competition" is the way to enlightenment....but in a way theres a market failure (not in the traditional economist sense, remember economists would call electric companies market failures because they have a monopoly and a monopoly is the most basic kind of market failure..right its the furthest thing from "healthy competition", which is why they always tout "healthy competition"..if im a businessman i want a monopoly..and to keep that monopoly.....go read peter thiels newest book for why i say this. Competition is for losers. google that.) in that no one wants to be in "healthy competition" when the business of making giant $300,000+ loans(or even say $100,000 loans) to the public. Its tough work to determine if a person is worthy of $300,000 dollars. So what im getting at is you just like the utility companies you have to have a regulated or semi regulated housing loan company so that even the disadvantaged poor gets to participate in getting loans, and owning pieces of american land that not many, under "healthy competition" would normally get. Its funny how we quickly replace the last most scarring event and completely wonder why they exist in the first place(i wish these two guys put that in their op-ed).....that the market fails in a sense that we need fannie and freddie to do things that the markets normally wouldn't do. One of the problem with economists(my professors always tell me this) is they always say if you dont know how to look at the problem then make the problem look like something you know how to do....that works until it doesn't. Buffett says better to be almost right than completely wrong. I dont know...I find such rigidity silly. Reform is one thing. But does anyone notice how no one addresses the legal issues? I have not heard one other proponent other than what we get from the DOJ on the legality. I thought we were a nation of laws. These economists answer to that would be..."well im not a lawyer". Back to the original point. Its strange...at a mirco level not one of us would loan our friend money to buy a $9,000 car....yet we think that that the banks will do it when its a $300,000 house with a promise to pay over 30 years...im willing to bet bankers and even some economist wouldnt loan that kind of money to others, im not willing to loan a my own cousin that kind of money...but maybe that makes me a bad cousin, Would you?..So someone has to step in and create that space..if its the end goal that we want......i dont know is this analogy off? Maybe theres some Economics Noble Prize winning paper on that simple thought.

Page 2, Footnote 4: "In this regard, we also note that Gregg M. Schwind, one of the Government’s primary attorneys in this case, left the Department of Justice on July 10, 1015." http://www.valueplays.net/wp-content/uploads/Government-filing.pdf See Exhibit 4 of the attached document. It is a letter written by Schwind dated the very same day of his departure (July 10, 2015): "Please be advised that the Government inadvertently provided plaintiffs several documents it considers privileged." An awfully big coincidence that Schwind left the same day that it was disclosed to the courts that he had inadvertently provided documents to the Plaintiffs. The DOJ is like the 3 stooges.

http://www.gseopinions.com/gsebullshit.html

Jurgis, I think youre getting antsy on a final outcome.... I just dont think that theres a good answer to that. The govt. has been stalling ever since fairholme has first put out the piece. And honestly the narrative of the govt hasnt changed at all since....delay, try something else, delay, try something else, delay.....so on. Fundamentally, I dont think that any of the governemtns arguments have changed....the only thing now is that there has been some discovery and we get to see how (pardon my french) full of shit the gov't is. Judge Sweeney said a long time ago that the shareholders will get their day in court. Before discover whent along their MO was executive privilege or some combination of that. Now they are destroying documents? Lawyers at the DOJ have said privately that "the NWS will be seen as a profit grab." They have privately contradicted the "death spiral" narrative. This is a DOJ team that isnt in service to the people of America...this is corrupt government workers who want to cover up their own motives for breaking promises to American citizens at the expense of other American Citizens. The DOJ lawyers are playing games with Sweeneys orders to release documents. In some cases they ignore them. The very namesake of the department they work for isnt serving Justice to the truth. Its a god damn travesty, the likes of watergate and the My Lai Massacre, that these documents are being released for public review.....And everyone knows it. And no one is willing to step up to the plate and bite the bullet because were all so cozy with the status quo. Obama(nor any Congressman) cant step up to the plate and restore them because that imply that they knows something. Can you say impeachment....remember the Monica affair wasn't about getting a bj(thats not illegal)...... Hillary or Bernie or Trump cant touch it cuz that would kill their chances of an election. And look who they put up to get reform done....some two bit congressman from TN who spends more time on his computer buying and trading stocks than the rest of the finance committee combined. Someone got murdered and were all accomplices so no one is going to indict anyone else. And better to let the shareholders take the fall for the murder cuz no one likes those hedge fund guys....you know putting in the sweat equity. And what an easy narrative to sell to the public..... No one likes to see the other guy work harder for more $$, just ask all the Lebron haters. And dont get me started on the reporters...some reporter digs around enough there might be a nomination for the pulitzer in this. No one wants to touch this because no one wants to take the fall. Its the ultimate game of catch the turd in Washington right now................so we delay. And i get it...im blaming everyone but everything ive said is not new news....Bethany has said it all before, all be it in a better tone. God Bless her. Shes doing Gods work.