doughishere

What if we had an unseal before there was a rebuttal....what if.

AIG v. FRBNY In The Crosshairs: It's Time To Rethink Fannie And Freddie Richard Epstein http://www.forbes.com/sites/richardepstein/2015/07/06/aig-v-frbny-in-the-crosshairs-its-time-to-rethink-fannie-and-freddie-in-light-of-aig/

the WSJ picked this up...is there an article?

Bill Ackman Is Confident About Freddie Mac (NYSE:FRE-PK) and Fannie Mae (NYSE:FNM-PK) Company8 hours ago During the course of last year, Bill Ackman, an activist who has invested in Freddie Mac (NYSE:FRE-PK) and Fannie Mae (NYSE:FNM-PK) has brought quite a reputation to these companies. It was due to these entities that the period of Great Recession sped up. However, the activist seems to have forgotten those times, and believes that the entities will be profitable to invest in. Let’s have a closer look into the matter to understand the situation better. The $16 billion hedge fund of Bill Ackman has a stake of around $475 million in the two housing companies. The fund has invested 1.93 percent of its capital in Fannie Mae and 1.02 percent of the capital in Freddie Mac. When together, these government sponsored companies came 8th in the fund’s investment portfolio. No matter how you try to look and analyze the matter, it is a fact that the investment is huge. Back in the month of September 2008, the government had to intervene and put the companies into a conservatorship. This action on part of the government was enough to put the entities under the control of the government. It is true that this step saves the mortgage system of the company, but it greatly damaged the value of both the companies, especially in the eyes of the stockholders. Freddie Mac (NYSE:FRE-PK) and Fannie Mae (NYSE:FNM-PK) had to sign a new bailout, which made the companies bound to pay a dividend of 12 percent and 10 percent to the Treasury Department of government. Since the companies were unable to pay such a high amount during the first three years, the DoT had to change the terms in 2012. According to the new terms, both the companies have to pay all their earnings to the Department of Treasury. DoT owns a stake of 80 percent of the common stocks of the companies. It is important to mention here that there is a great deal of risks attached to the ownership of such entities. The government has a stake of 80 percent in these companies, and yet, these entities are required to pay all their earnings not the stockholders but to the government. Similarly, the government has no interest in giving any payouts to the investors. The argument that Bill Ackman relies upon is that by setting a 100 percent obligation on the companies, the government has overstepped the limits of the conservatorship, and hence, it violates the 5th amendment. Since there are a lot of barriers to the entry of new mortgage companies in the industry, Fannie and Freddie are no doubt an integral and crucial part of the U.S. mortgage industry. Freddie Mac (NYSE:FRE-PK) and Fannie Mae (NYSE:FNM-PK) are responsible for 61 percent of the mortgages in the region of United States. Both the companies can collapse if the government introduces mortgage reforms, but until then, the investors should look out for each and every opportunity to benefit from these companies.

Date Filed # Docket Text 06/26/2015 169 **SEALED** MOTION to Remove the "Protected Information" Designation from Certain Unredacted Information in Documents Produced by Deloitte , filed by All Plaintiffs.Response due by 7/13/2015. (Attachments: # 1 Appendix)(Cooper, Charles) (Entered: 06/26/2015) 06/26/2015 170 **SEALED** MOTION to Remove the "Protected Information" Designation from Certain Unredacted Information in Documents Produced by Fannie Mae , filed by All Plaintiffs.Response due by 7/13/2015. (Attachments: # 1 Appendix)(Cooper, Charles) (Entered: 06/26/2015) 06/26/2015 171 **SEALED** MOTION to Remove the "Protected Information" Designation from Certain Unredacted Information in Documents Produced by Freddie Mac , filed by All Plaintiffs.Response due by 7/13/2015. (Attachments: # 1 Appendix)(Cooper, Charles) (Entered: 06/26/2015) 06/26/2015 172 **SEALED** MOTION to Remove the "Protected Information" Designation from Certain Unredacted Information in Documents Produced by PricewaterhouseCoopers , filed by All Plaintiffs.Response due by 7/13/2015. (Attachments: # 1 Appendix)(Cooper, Charles) (Entered: 06/26/2015)

On other thought on the report that was out tuesday night. This report kinda adds to the fact that the GSEs are different slightly than AIG. Where AIG was cound that the govt acted illegal in taking the company however there was no award. The report shows that it was in a thriving company in the case of the GSEs that was taken. ::End of My John Madden Moment::

Wow..damned if you do. Damed if you dont.

Either they think that theres a good chance at these being un-protected, in which case i wonder if there is anything good in them. OR there's sometime really good in them and they stay protected.

Bottom line: You dont really want to own a club. http://ardiansyahzein.com/SEMESTER%201/MARKETING%20MANAGEMENT/CASE%20STUDY/marquee%20the%20business%20of%20night%20life.pdf

"However, if one were to use some other standard (and many were being suggested and recommended for quite a while), one could make the case that neither company had the capital desired by their critics, some of whom were not investors, while others had an academic or political interest in the housing and mortgage area that was adverse to the GSEs."

Thoughts? I gatta look at the conclusions in the morning but... http://www.housingwire.com/blogs/1-rewired/post/34280-the-three-card-monty-accounting-of-fannie-freddie-conservatorship

Nice luke. Good find. Hero member indeed.

Agreed Luke

Star International vs US Ruling. The AIG case. https://docs.google.com/viewer?a=v&pid=forums&srcid=MDUxNDQwNjExMTIwMzQzNjc3NDIBMTM2NzYwMTc4MzA2NDIyMzY5NDYBU3luQkFmRnlOeUFKATAuMQEBdjI

One things for sure. fairholmes response should be interesting.

I am not and I am thankful for your commentary. Just attempting to learn. Thank you for the clarity. We should be thanking you for putting up with us. Thanks.

merkhet, but with that document that was leaked earlier it was anticipated....

Thats another part of the case that i think we are not forgetting....the govt decided to go into conservatorship when the had the option to do the opposite. Its almost as if the looked around and are looking for reasons not to pay out to shareholders even though receivership would do that also

I think even from a legal perspective, it's hard to argue for the below if you're the government. "At the time of the taking" to me sounds pretty cut and dry. The taking is still occurring as Fairholme holds the shares. August 17, 2012 was merely the start of the taking. Thus, "time of the taking" is not a single point in time in this case, but an ongoing matter. Disclosure: Not a lawyer :D I absolutely agree...its like they are arguing that they don't want to play the varsity team but they admit to taking.

I think the issue of standing doesn't really care what was taken -just that you didn't own the security at the time the "taking" occurred. Basically this then I get what Merk is saying.....

Isnt Maniere with regards to "federal regulators which allowed institution to amortize goodwill of purchased institution as capital asset"? Were not talking about Coca-colas secret formula or McD's secret sauce...were talking about cold hard cash that was transferred from the companies to the Treasury.

From timhoward717.com Peter Chapman was kind enough to locate and email me the Maniere decision which was one of the cases cited in the governments latest motion to dismiss.Peter also had this to say: “The Maniere decision doesn’t quite say what our government wants it to say. Fairholme is not claiming third-party beneficiary status in its lawsuit or anything close to what Mr. Maniere was after. Fairholme complains that our government expropriated its securities and it wants our government to write it — and every other similarly situated preferred and common shareholder — a check for just compensation under the Fifth Amendment for the taking of private property for public use.”

Peter Chapman update on motion: “Our Government has filed a Supplemental Motion to Dismiss in Fairholme v. U.S. this afternoon. Our Government wants all claims by all shareholders who acquired Fannie or Freddie shares after Aug. 17, 2012 — the date of the Third Amendment — to be dismissed as a matter of law because, our Government argues, they lost nothing. The argument is nonsense. In America, the bundle of rights that attach to a security do not change based on the identity of the holder. Here are some legal citations for that proposition: — In re Lorraine Castle Apartments Bldg. Corp., 149 F.2d 55, 57-58 (7th Cir.), cert. denied, 326 U.S. 728 (1945) (“[T]he prices which security holders pay for their securities in no wise affects the measure of their participation in reorganization or their voting power.”); — Standard Gas & Elec. Co. v. Deep Rock Oil Corp., 117 F.2d 615, 619 (10th Cir.), cert. denied, 313 U.S. 564 (1941); and — Security-First Nat’l Bank v. Rindge Land & Navigation Co., 85 F.2d 557, 561 (9th Cir.), reh’g denied, 86 F.2d 3 (9th Cir.), cert. denied, 299 U.S. 613 (1936), reh’g denied, 300 U.S. 686 (1937) (“The legal value or property right in an obligation is the right to recover from the maker to the entire extent of his promise to pay. The consideration given for a security by the holder thereof is immaterial.”). Via todd sullivan http://www.valueplays.net/2015/06/08/the-government-makes-a-bizarre-argument-in-gse-case/

Richard Epstein steps back up to the plate. http://www.forbes.com/sites/richardepstein/2015/06/08/the-longstanding-struggle-over-fannie-and-freddie-is-not-over/ "The Saxton complaint consciously avoids any constitutional challenges to the government’s action, but does state forceful claims that both FHFA (and Ed DeMarco in his official capacity its then Director of FHFA) and Treasury acted beyond the scope of their statutory authority, that these actions were arbitrary and capricious when tested against the normal standards of administrative law, and, finally that their actions were in breach of their contractual and good faith obligations to the private shareholders of both Fannie and Freddie." This is what side ive tried to take. Its not "ideological" arguments that Jurgis argues for. I try to stay away from "ideological arguments," they serve me no purpose. What i have a problem with is what is contractually obligated by the government when it decided to enter into an agreement with shareholders. The Govt thought they had a win all battle plan but when the tides turned against them they changed the rules. Episten enven says it out right, "There is a morality play at stake in this history." What i think guys like Jurgis and certainly Carney want is the ideological argument aginst TBTF. They dont want these companies to continue...they want heads. They want someone to punish. I dont care about that Ideological argument...punish them or not. Just dont change the rules when you dont get what you want. Shit even Epistein admits hes a huge libertarian but still argues that the government must contractually hold their end of the original agreement.

Jurguis.... You tease.