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

[doughishere]

Noice!

 

Edit: I remember back in the GGP days the MO at the beginning was "this will never work" then eventually as the debt got refinanced  and the mall properties retained their value and cash flows eventually the non believers slowly came around as their arguments got left by the wayside.

 

I remember that shitty offer by SPG....like it was a lowball.....i knew that was the point where the tides had turned.....

 

Too bad the officials arnt named.

[Luke 532]

http://www.bloomberg.com/news/articles/2016-08-18/the-fix-is-out-fannie-and-freddie-heading-for-new-troubles

 

FHFA officials say this controversial arrangement -- instituted in 2012, the very year the GSEs returned to profitability -- make another rescue, however small, all but inevitable. The regulator has quietly examined whether it can suspend the payments unilaterally to build up the GSEs’ capital cushion, among other options.

 

Good catch.

[Eye4Valu]

http://www.bloomberg.com/news/articles/2016-08-18/the-fix-is-out-fannie-and-freddie-heading-for-new-troubles

 

FHFA officials say this controversial arrangement -- instituted in 2012, the very year the GSEs returned to profitability -- make another rescue, however small, all but inevitable. The regulator has quietly examined whether it can suspend the payments unilaterally to build up the GSEs’ capital cushion, among other options.

 

I think the advantage for Watt doing so is two fold. Stave off another taxpayer bailout, and prompt congressional action. I'm sure Congress would move if Watt started retaining capital, as they would be scared to miss the bus on having their say.

[doughishere]

http://www.bloomberg.com/news/articles/2016-08-18/the-fix-is-out-fannie-and-freddie-heading-for-new-troubles

 

FHFA officials say this controversial arrangement -- instituted in 2012, the very year the GSEs returned to profitability -- make another rescue, however small, all but inevitable. The regulator has quietly examined whether it can suspend the payments unilaterally to build up the GSEs’ capital cushion, among other options.

 

I think the advantage for Watt doing so is two fold. Stave off another taxpayer bailout, and prompt congressional action. I'm sure Congress would move if Watt started retaining capital, as they would be scared to miss the bus on having their say.

 

 

Everything they've said has turned out to be a lie?  I think the advantage for Watt coming out is to save face....no? Hes the Ted Cruze of the GSEs.

 

Building capital is what they should have been doing for the last 4 years. Watt hasnt done this and it was his job to do this.....Watt hasnt been doing his job.

 

The hedge funds, sorry to say this, were the first ones to say this. They are a step ahead of Watt et all and it pains everyone in the anti-gse camp (Joe and John included) to admit this......

 

 

 

[Eye4Valu]

http://www.bloomberg.com/news/articles/2016-08-18/the-fix-is-out-fannie-and-freddie-heading-for-new-troubles

 

FHFA officials say this controversial arrangement -- instituted in 2012, the very year the GSEs returned to profitability -- make another rescue, however small, all but inevitable. The regulator has quietly examined whether it can suspend the payments unilaterally to build up the GSEs’ capital cushion, among other options.

 

I think the advantage for Watt doing so is two fold. Stave off another taxpayer bailout, and prompt congressional action. I'm sure Congress would move if Watt started retaining capital, as they would be scared to miss the bus on having their say.

 

 

Everything they've said has turned out to be a lie?  I think the advantage for Watt coming out is to save face....no? Hes the Ted Cruze of the GSEs.

 

Building capital is what they should have been doing for the last 4 years. Watt hasnt done this and it was his job to do this.....Watt hasnt been doing his job.

 

The hedge funds, sorry to say this, were the first ones to say this. They are a step ahead of Watt et all and it pains everyone in the anti-gse camp (Joe and John included) to admit this......

 

All true with respect to Watt personally. Of course, he has been under Treasury's thumb. It would be a big move on his part. Otherwise, the courts have to stop it or Congress has to revamp. In my view, the courts are unlikely to stop it prior to the exhaustion of capital in 2018. I don't think the cases will be resolved by then, but hope I'm wrong. I think either Watt decides to retain capital, at which point I suspect Congress would move to act, or the GSEs need another bailout in 2018, which should prompt Congress to act as well. The legal cases will continue irrespectively and are another wild card in the timing of a resolution and potential monetary recovery.

[Eye4Valu]

Merk and Christian, what do you all make of this: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-5100.Opinion.8-16-2016.1.PDF

[Guest cherzeca]

Merk and Christian, what do you all make of this: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-5100.Opinion.8-16-2016.1.PDF

 

not a whole lot of applicability to fairholme's case in federal court of claims.

 

remember, fairholme is saying in court of claims, we are pursuing damages in the perry case in federal district court, saying that APA prevents NWS, but if our claims in federal court are not recognized, then we are suing for a taking of private property here in court of claims.  so two fold analysis, first, if plaintiffs can't get a remedy for a protected property right in federal district court, then we want a takings remedy for having taken our property w/o compensation here in court of claims.

 

in piszel, court went out of its way to point out that the first part of test, tat there is no award of damages for breach of contract, has not been satisfied by plaintiff. ct said

 

"The government’s instruction to Freddie Mac did not

take anything from Mr. Piszel because, even after the

government’s action, Mr. Piszel was left with the right to

enforce his contract against Freddie Mac in a breach of

contract action. As the government correctly points out,

“the only duty a contract imposes is to perform or pay

damages.” F.T.C. v. Think Achievement Corp., 312 F.3d

259, 261 (7th Cir. 2002) (citing Oliver Wendell Holmes,

Jr., The Common Law 300–02 (1881)). Thus, to effect a

taking of a contractual right when performance has been

prevented, the government must substantially take away

the right to damages in the event of a breach."

 

so ct is saying to piszel, first show us that your breach of contract suit is unavailing before you sue for a takings.  this fairholme can do if and when perry appeal affirms lamberth.

[doughishere]

 

All true with respect to Watt personally. Of course, he has been under Treasury's thumb. It would be a big move on his part. Otherwise, the courts have to stop it or Congress has to revamp. In my view, the courts are unlikely to stop it prior to the exhaustion of capital in 2018. I don't think the cases will be resolved by then, but hope I'm wrong. I think either Watt decides to retain capital, at which point I suspect Congress would move to act, or the GSEs need another bailout in 2018, which should prompt Congress to act as well. The legal cases will continue irrespectively and are another wild card in the timing of a resolution and potential monetary recovery.

 

 

Well heres the catch-22 for Watt...Either he goes in alone and does the "reverse-sweep. " Great where was his independence when it was enacted.

 

And if he goes in with the support of the Treasury or some other entity then hes not "independent"

 

Am I wrong in thinking this?

 

 

Edit: It was Demarco who was in office during the sweep.

[Guest cherzeca]

Merk and Christian, what do you all make of this: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-5100.Opinion.8-16-2016.1.PDF

 

not a whole lot of applicability to fairholme's case in federal court of claims.

 

remember, fairholme is saying in court of claims, we are pursuing damages in the perry case in federal district court, saying that APA prevents NWS, but if our claims in federal court are not recognized, then we are suing for a taking of private property here in court of claims.  so two fold analysis, first, if plaintiffs can't get a remedy for a protected property right in federal district court, then we want a takings remedy for having taken our property w/o compensation here in court of claims.

 

in piszel, court went out of its way to point out that the first part of test, tat there is no award of damages for breach of contract, has not been satisfied by plaintiff. ct said

 

"The government’s instruction to Freddie Mac did not

take anything from Mr. Piszel because, even after the

government’s action, Mr. Piszel was left with the right to

enforce his contract against Freddie Mac in a breach of

contract action. As the government correctly points out,

“the only duty a contract imposes is to perform or pay

damages.” F.T.C. v. Think Achievement Corp., 312 F.3d

259, 261 (7th Cir. 2002) (citing Oliver Wendell Holmes,

Jr., The Common Law 300–02 (1881)). Thus, to effect a

taking of a contractual right when performance has been

prevented, the government must substantially take away

the right to damages in the event of a breach."

 

so ct is saying to piszel, first show us that your breach of contract suit is unavailing before you sue for a takings.  this fairholme can do if and when perry appeal affirms lamberth.

 

as a side note, greg joseph put in an amicus brief to counter govt's argument that piszel has no rights under a lamberth analysis...that govt can do what it wants w/o damages.  govt made that argument in its briefing.  it is important to note that court didnt use this argument to support its analysis.

[Mephistopheles]

Cherzeca, can the Piszel ruling mean that if the District Court were to affirm the dismissal of the breach of contract claims in our case, that then our contracts qualify for a takings in the Court of Claims? So in effect, does it ensure a safer backstop for us were we to lose in the DC?

[Guest cherzeca]

Cherzeca, can the Piszel ruling mean that if the District Court were to affirm the dismissal of the breach of contract claims in our case, that then our contracts qualify for a takings in the Court of Claims? So in effect, does it ensure a safer backstop for us were we to lose in the DC?

 

that's how i read it. of course, fairholme also has to show that fhfa is subject to treasury control as well, as fhfa argues that it is not govt

[hardincap]

SECOND EDIT:  brown's speech to the federalist society (2000) is a MUST READ:  https://web.archive.org/web/20031103060347/http://www.constitution.org/col/jrb/00420_jrb_fedsoc.htm

 

i finally read this. we really could not ask for a better judge than brown. 

[Luke 532]

From Peter A. Chapman...

 

Hamish Hume, Esq., representing the Class Plaintiffs, sent the D.C. Circuit a letter yesterday advising it about the Federal Circuit's decision in Piszel v. U.S. and explaining how the Federal Circuit's decision supports the Class Plaintiffs' position.  A copy of Mr. Hume's letter is attached...

14-5243-1631120.pdf

[Guest cherzeca]

From Peter A. Chapman...

 

Hamish Hume, Esq., representing the Class Plaintiffs, sent the D.C. Circuit a letter yesterday advising it about the Federal Circuit's decision in Piszel v. U.S. and explaining how the Federal Circuit's decision supports the Class Plaintiffs' position.  A copy of Mr. Hume's letter is attached...

 

@luke  thanks for posting.

 

@meph  after reading hume's letter, it is clear that piszel's reasoning is applicable to all fhfa cases in which fhfa asserts that "all is all", meaning shareholders have lost all of their rights as shareholders under HERA.  this is to say, all the cases. fhfa's twin cudgels in all of the cases (swallowed hook line and sinker by lamberth) are the anti-injunction provision and the succeeding to all rights provisions of HERA.  piszel's reasoning, as explained by hume, points out that the second prong raises grave constitutional issues.

[merkhet]

I would throw in a small point that other people haven't noted yet. The Court of the Federal Circuit is the appeals court to the Court of Federal Claims, which means that this Piszel case is direct precedent to the Fairholme case before Judge Sweeney.

 

Meaning that if the appellants lose the breach of K case because of the reasons that FHFA argues in terms of "all is all," then, automatically, the Fairholme case gets to move forward with their Takings claims.

[Eye4Valu]

I would throw in a small point that other people haven't noted yet. The Court of the Federal Circuit is the appeals court to the Court of Federal Claims, which means that this Piszel case is direct precedent to the Fairholme case before Judge Sweeney.

 

Meaning that if the appellants lose the breach of K case because of the reasons that FHFA argues in terms of "all is all," then, automatically, the Fairholme case gets to move forward with their Takings claims.

 

Nice

[rros]

I would throw in a small point that other people haven't noted yet. The Court of the Federal Circuit is the appeals court to the Court of Federal Claims, which means that this Piszel case is direct precedent to the Fairholme case before Judge Sweeney.

 

Meaning that if the appellants lose the breach of K case because of the reasons that FHFA argues in terms of "all is all," then, automatically, the Fairholme case gets to move forward with their Takings claims.

 

I may be off, but all cases can move forward.

 

The "all is all" precept has a single point of failure. That is, when the Director wasn't acting as conservator, therefore HERA won't apply. In which case, no rights were removed, the nws becomes illegal and Perry prevails.

 

Separately, the possibility of having a conservator removing all rights -provided the conservator follows the law and does act as a conservator under HERA- still gravely affects constitutional rights because in this scenario suing for breach of K becomes impossible. The fact that FHFA argues this way, after this last ruling, makes clear to Sweeney a taking has occurred. 

 

So we do not need to lose Perry's to win Sweeney's. Sweeney, after this, has been set on the right track either way. And Brown and Ginsburg can still determine FHFA wasn't a conservator.

 

Point is that all rights may not have been removed because the conservator may have failed to act as such but that they could have if he had acted as such. A Perry defeat is not necessary to prove this.

[Luke 532]

It's becoming increasingly difficult to see how preferred shareholders get hurt when all is said and done.

[Guest cherzeca]

@rros

 

"That is, when the Director wasn't acting as conservator, therefore HERA won't apply. In which case, no rights were removed, the nws becomes illegal and Perry prevails."

 

it is not the director/conservator distinction operating here, but rather than if "all is all" as shsa argues, then this raises the question whether a 5th A takings has occurred, and the constitutional avoidance principle is that judges should read statutes in a way that avoids raising the constitutional question...ie if congress wanted to make clear in HERA that it was taking all of shareholders rights, creating a taking, it should have been very clear about it.  so when HERA says all rights of shareholders...with respect to the GSEs, that means that fhfa has supplanted only the right to bring a derivative suit (which is further limited by conflict of interest doctrine), not the right to participate economically or bring a direct claim.

 

capiche?

 

[hardincap]

carney speculates millett is writing opinion, since brown just wrote and ginsburg is senior. any thoughts on whether this matters?

[Mephistopheles]

I don't think it does, as they have to have unanimous agreement to whatever they decide. Just a guess

[Luke 532]

I don't think it does, as they have to have unanimous agreement to whatever they decide. Just a guess

 

Only need a majority (2 out of 3) to decide.

[Steve_Berk]

the prediction that Millet is going to write just bc Ginsburg is senior, etc, is just made up. Senior judges carry a lighter case load but they are otherwise treated no differently than other judges. The person who is writing the opinion will be writing for the majority though. so if millet is dissenting, she won't write the opinion--just the dissent.

[merkhet]

If it's a unanimous decision, I wouldn't be surprised to see Millett writing it. But there's no way to know who will be writing it beforehand.

[Guest cherzeca]

i dont know who is writing opinion and carney doesnt either. 

 

i saw someone did a survey, and brown has written 2 opinions lately, ginsburg 4, and millet 6. stupid is as stupid does