FNMA and FMCC preferreds. In search of the elusive 10 bagger.

[merkhet]

Good reply brief from Perry.

 

Defendants complain that Plaintiffs waited too long to make their latest motion, with Treasury telling the Court that “[t]he Fairholme Funds plaintiffs had access to these additional materials before they filed their first motion,” Treasury’s Opp’n to Pls.’ Mot. for Further Judicial Notice & Suppl. of the Record at 1(June 8, 2016) (“Treas. Opp.”), and FHFA stating that “Fairholme plainly had the opportunity to submit any additional documents under seal as part of its original motion for judicial notice,” Opp’n of Appellees FHFA & Melvin L. Watt to Appellants’ Mot. for Further Judicial Notice & Suppl. of the Record at 2–3 (June 9, 2016) (“FHFA Opp.”). These statements are false. Several of the most significant documents identified in Plaintiffs’ recent filing were only produced to Fairholme after it made its earlier motion. The Government initially withheld these documents on the basis of groundless privilege assertions that it subsequently abandoned when it became clear that Fairholme was preparing to file a motion to compel in the Court of Federal Claims.

 

The handful of other documents that Fairholme was unable to identify in its earlier motion were only produced to Fairholme between April and July 2015, a period during which the Government dumped approximately 144,000 pages of materials on Fairholme’s document review team after months of foot dragging.

 

That explains why these documents weren't already picked up in the first filing and why Hamish Hume said it was a bit complicated as to why they didn't have the documents referenced in their initial briefs.

2016-06-15_Perrys_Reply_in_Support_of_Their_Motion_for_Further_Judicial_Notice_and_Supplementation_of_the_Record.pdf

[hardincap]

I think you mean David Thompson from the call.

 

+1 to the part where they call the 7.5% cagr figure "analytically bankrupt", and taht "the Court should not permit this latest abuse of basic financial concepts to help Treasury defend the Net Worth Sweep"

[merkhet]

I think you mean David Thompson from the call.

 

+1 to the part where they call the 7.5% cagr figure "analytically bankrupt", and taht "the Court should not permit this latest abuse of basic financial concepts to help Treasury defend the Net Worth Sweep"

 

I'm pretty sure the last Investors Unite call was with Hamish Hume. Unless there were multiple folks on that call.

 

I particularly liked how they responded to the 7.5% CAGR question. By stating that "overpaying by $125 Billion" under 10% dividends can't possibly reconcile with the idea of earning a 7.5% CAGR under NWS, it makes the argument crystal clear even to the most math phobic of people.

[Guest cherzeca]

i would have preferred a statement as to what govt's real investment return is.  depending on how you calculate it (and assuming pref is valued at par), i get 17-21% simple per annum.  not that millet understands any of this...

 

edit:  but you have to love this: " It requires no small amount of audacity for Treasury to describe Plaintiffs’ evidence as “a selective sliver of untested discovery materials.”

[doughishere]

Good reply brief from Perry.

 

Defendants complain that Plaintiffs waited too long to make their latest motion, with Treasury telling the Court that “[t]he Fairholme Funds plaintiffs had access to these additional materials before they filed their first motion,” Treasury’s Opp’n to Pls.’ Mot. for Further Judicial Notice & Suppl. of the Record at 1(June 8, 2016) (“Treas. Opp.”), and FHFA stating that “Fairholme plainly had the opportunity to submit any additional documents under seal as part of its original motion for judicial notice,” Opp’n of Appellees FHFA & Melvin L. Watt to Appellants’ Mot. for Further Judicial Notice & Suppl. of the Record at 2–3 (June 9, 2016) (“FHFA Opp.”). These statements are false. Several of the most significant documents identified in Plaintiffs’ recent filing were only produced to Fairholme after it made its earlier motion. The Government initially withheld these documents on the basis of groundless privilege assertions that it subsequently abandoned when it became clear that Fairholme was preparing to file a motion to compel in the Court of Federal Claims.

 

The handful of other documents that Fairholme was unable to identify in its earlier motion were only produced to Fairholme between April and July 2015, a period during which the Government dumped approximately 144,000 pages of materials on Fairholme’s document review team after months of foot dragging.

 

That explains why these documents weren't already picked up in the first filing and why Hamish Hume said it was a bit complicated as to why they didn't have the documents referenced in their initial briefs.

 

 

Whose in control of this ship?

[Mephistopheles]

i would have preferred a statement as to what govt's real investment return is.  depending on how you calculate it (and assuming pref is valued at par), i get 17-21% simple per annum.  not that millet understands any of this...

 

I thought this too, but I think they avoided calculating the real return because it would involve speculation of future income - anything but a certain % number. To which the defendants can just say that it's all speculation and estimates and the plaintiff's number is just as questionable as their 7.5%.

 

On the other hand, they might not want to suggest the 17-21% because it involves paying back the full liquidation preference without compensating for the over payment of dividends. I guess they don't want to risk this biting them in the ass.

 

So I'm guessing they wanted to keep it simple for the judges by displaying the logic that it's obviously a bare minimum of 10% plus whatever they've received on top.

 

But who knows, I'm no lawyer :)

[merkhet]

I think it's better that they just show that the defendants were, once again, lying. If you add in the additional information about 17% to 21% returns, it risks deflecting attention from the lying.

 

Remember, the brief at this point is almost like a secondary chance of arguing. You want the last thought in the judges' minds not to be "which calculation is correct," but rather that "the calculation appellants gave was blatantly false."

[hardincap]

agree w/ merkhet. it doesnt matter what the rate is anyway

[Guest cherzeca]

agree with merk too. 

 

a judge can understand that when you get $125B more than what you would need for a 10% return, you cant end up with a 7.5% return.  dont need to put forth "right" answer, just that treasury is unreliable, stupid and (given that it controls US finances) dangerous

[TwoCitiesCapital]

agree with merk too. 

 

a judge can understand that when you get $125B more than what you would need for a 10% return, you cant end up with a 7.5% return.  dont need to put forth "right" answer, just that treasury is unreliable, stupid and (given that it controls US finances) dangerous

 

I like this line of thinking - you lawyers are some smart folks.

[doughishere]

agree with merk too. 

 

a judge can understand that when you get $125B more than what you would need for a 10% return, you cant end up with a 7.5% return.  dont need to put forth "right" answer, just that treasury is unreliable, stupid and (given that it controls US finances) dangerous

 

 

Coulden't you also argue that the Treasury was sophisticated market participant? Now they just have buyers remorse. I mean theres no really good way to paint the Treasury conduct?

[Guest cherzeca]

treasury seems not to have passed anything relating to NWS by counsel in real time.  i say that because of all of the kinds of privileges they assert, you wont see atty/client.  2008 was pretty crazy times, so i give treasury a pass for anything then, but 2012?  just strikes me as a i have a phone and i have a pen, and you can sue me if you want attitude...

[doughishere]

treasury seems not to have passed anything relating to NWS by counsel in real time.  i say that because of all of the kinds of privileges they assert, you wont see atty/client.  2008 was pretty crazy times, so i give treasury a pass for anything then, but 2012?  just strikes me as a i have a phone and i have a pen, and you can sue me if you want attitude...

 

 

No argument here. Assuming a win for the plaintiff....are there more ramifications outside of just who gets the money?

[doughishere]

treasury seems not to have passed anything relating to NWS by counsel in real time.  i say that because of all of the kinds of privileges they assert, you wont see atty/client.  2008 was pretty crazy times, so i give treasury a pass for anything then, but 2012?  just strikes me as a i have a phone and i have a pen, and you can sue me if you want attitude...

 

 

No argument here. Assuming a win for the plaintiff....are there more ramifications outside of just who gets the money?

 

Apparently Im not the only one who thinks there's ramifications outside of the who gets the money.

 

https://www.dropbox.com/s/wxpdjrsr8uqy6l7/Complaint%20of%20DoJ%20Attorneys%20%28Doc%201618181%29.pdf

 

[merkhet]

treasury seems not to have passed anything relating to NWS by counsel in real time.  i say that because of all of the kinds of privileges they assert, you wont see atty/client.  2008 was pretty crazy times, so i give treasury a pass for anything then, but 2012?  just strikes me as a i have a phone and i have a pen, and you can sue me if you want attitude...

 

 

No argument here. Assuming a win for the plaintiff....are there more ramifications outside of just who gets the money?

 

Apparently Im not the only one who thinks there's ramifications outside of the who gets the money.

 

https://www.dropbox.com/s/wxpdjrsr8uqy6l7/Complaint%20of%20DoJ%20Attorneys%20%28Doc%201618181%29.pdf

 

Where did you get this?

[doughishere]

Gselinks.com

[merkhet]

Ugh, people should not be reaching out to the court directly. But I suppose there is no way to stop them.

[doughishere]

Ugh, people should not be reaching out to the court directly. But I suppose there is no way to stop them.

 

We live in a brave new word, merk. Why shouldn't they be doing this, just curious?

[merkhet]

Ugh, people should not be reaching out to the court directly. But I suppose there is no way to stop them.

 

We live in a brave new word, merk. Why shouldn't they be doing this, just curious?

 

Because ex parte communications like this run the possibility of prejudicing the case, leading to dismissals of cases, might get judges involuntarily recused from the case...

 

Do I really need to go on?

[doughishere]

Ugh, people should not be reaching out to the court directly. But I suppose there is no way to stop them.

 

We live in a brave new word, merk. Why shouldn't they be doing this, just curious?

 

Because ex parte communications like this run the possibility of prejudicing the case, leading to dismissals of cases, might get judges involuntarily recused from the case...

 

Do I really need to go on?

 

My apologies. I dont spend a lot of time in litigation and law. This is my first real experience in such things.

[merkhet]

Ugh, people should not be reaching out to the court directly. But I suppose there is no way to stop them.

 

We live in a brave new word, merk. Why shouldn't they be doing this, just curious?

 

Because ex parte communications like this run the possibility of prejudicing the case, leading to dismissals of cases, might get judges involuntarily recused from the case...

 

Do I really need to go on?

 

My apologies. I dont spend a lot of time in litigation and law. This is my first real experience in such things.

 

No worries. My frustration isn't aimed at you. It's aimed at the guy who is trying to snatch defeat from the jaws of victory.

[Guest cherzeca]

this was sent to the clerk of dc court of appeals.  not the judges.  i am not fussed by it, but maybe i should be.

 

nice graphs, by the way

[doughishere]

this was sent to the clerk of dc court of appeals.  not the judges.  i am not fussed by it, but maybe i should be.

 

nice graphs, by the way

 

he included amortization tables also i was impressed.

[Guest cherzeca]

Ugh, people should not be reaching out to the court directly. But I suppose there is no way to stop them.

 

i have been reliably informed that the author did not send this memo to the court clerk.

[merkhet]

On the one hand, sure, it's helpful to have been assured that it wasn't sent anywhere. On the other hand, why was it in the form of an email then? Why bother with that formatting?

 

If you guys can recall, back about a year ago, there were people leaving messages on Sweeney's answering machine and faxing things to her court. Doesn't really matter whether they try to do it through the court clerk or directly. It's a bad idea. At this point in the game, it's in the government's interest to seize on any opportunity to delay and/or throw a wrench in the process.