merkhet Posted October 15, 2014 Share Posted October 15, 2014 The Sweeney trial, in the Court of Federal Claims, will be done by the end of next year -- if it even gets that far -- which I doubt. But wouldn't there be a long appeals process? I feel like this is one of those cases that lasts many years and ends up in the Supreme Court. The losing party only gets one appeal by right. There is no "right" to be heard by the Supreme Court. The Supreme Court must agree to listen to the case. I know I've asked this before but am still not clear on the answer: 1. If I swap from FNMA common to FMCC common, I know the wash sale rule doesn't count. 2. If I swap from FNMA common to FNMA preferred, I am pretty sure it doesn't count. 3. If I swap from FNMA preferred to another series of FNMA preferred, I am not as sure. Does anyone know #2 & 3 for sure? The SEC website's description is a bit vague. (1) is correct. (3) also will not count -- I checked with my accountant about this last week. (2), on the other hand, I'm not sure about. I don't know if it's substantially the same or not. Link to comment Share on other sites More sharing options...
Mephistopheles Posted October 15, 2014 Share Posted October 15, 2014 The losing party only gets one appeal by right. There is no "right" to be heard by the Supreme Court. The Supreme Court must agree to listen to the case. I know I've asked this before but am still not clear on the answer: 1. If I swap from FNMA common to FMCC common, I know the wash sale rule doesn't count. 2. If I swap from FNMA common to FNMA preferred, I am pretty sure it doesn't count. 3. If I swap from FNMA preferred to another series of FNMA preferred, I am not as sure. Does anyone know #2 & 3 for sure? The SEC website's description is a bit vague. (1) is correct. (3) also will not count -- I checked with my accountant about this last week. (2), on the other hand, I'm not sure about. I don't know if it's substantially the same or not. Thanks, Merkhet. If #3 is okay (swapping from one series of Pfd to another), then I feel like #2 (common to pfd) should most certainly be okay given that common and pfd are less "same" than 2 series of pfd. Link to comment Share on other sites More sharing options...
valueyoda Posted October 15, 2014 Share Posted October 15, 2014 All 3 are ok. Link to comment Share on other sites More sharing options...
merkhet Posted October 15, 2014 Share Posted October 15, 2014 The losing party only gets one appeal by right. There is no "right" to be heard by the Supreme Court. The Supreme Court must agree to listen to the case. I know I've asked this before but am still not clear on the answer: 1. If I swap from FNMA common to FMCC common, I know the wash sale rule doesn't count. 2. If I swap from FNMA common to FNMA preferred, I am pretty sure it doesn't count. 3. If I swap from FNMA preferred to another series of FNMA preferred, I am not as sure. Does anyone know #2 & 3 for sure? The SEC website's description is a bit vague. (1) is correct. (3) also will not count -- I checked with my accountant about this last week. (2), on the other hand, I'm not sure about. I don't know if it's substantially the same or not. Thanks, Merkhet. If #3 is okay (swapping from one series of Pfd to another), then I feel like #2 (common to pfd) should most certainly be okay given that common and pfd are less "same" than 2 series of pfd. My apologies, I mis-typed for (3) -- my accountant says that a swap of one series of preferred for another series of preferred will be considered substantially similar securities for the purposes of the wash rule -- i.e. no tax benefit. I suspect that for (2) that it's an easier case to make that common and preferred are not substantially similar for the purposes of the wash sale rule such that the wash sale rule will not apply. Link to comment Share on other sites More sharing options...
merkhet Posted October 15, 2014 Share Posted October 15, 2014 Sweeney ruled to deny Tim Howard access to the privileged documents. (Attached) I was never really sure what value plaintiffs saw in giving him access to the documents in the first place...2014-10-15_Order_Denying_Tim_Howard_Access.pdf Link to comment Share on other sites More sharing options...
dcollon Posted October 17, 2014 Share Posted October 17, 2014 Fannie, Freddie Near Deal That Promises to Boost Mortgage Lending per WSJ Fannie_Freddie_Near_Deal_That_Promises_to_Boost_Mortgage_Lending_-_WSJ_-_WSJ.pdf Link to comment Share on other sites More sharing options...
merkhet Posted October 17, 2014 Share Posted October 17, 2014 Now that Fannie & Freddie are opening up the spigot even more, the calls for shutting them down are going to be even more ridiculous. How do you shut them down when they're the only apparatus we have for securitizing mortgage markets? Link to comment Share on other sites More sharing options...
onyx1 Posted October 20, 2014 Share Posted October 20, 2014 Plaintiffs Brief in Opposition to Defendants Motion to Dismiss, USDC Iowa, attached. Continental Western's reply to UST's filing of Lamberth decision to Iowa court "On the Perry court’s understanding of Section 4617(f), then, FHFA need not offer any rehabilitative rationale for its actions or otherwise even pretend to pursue the traditional goals and actions of a conservator to avail itself of immunity from suit. So long as Fannie and Freddie continue to operate profitably, FHFA is free to give all of the Companies’ assets to anyone, for any reason. Congress surely did not intend Section 4617(f) to bring about such absurd results."49-1.pdf Link to comment Share on other sites More sharing options...
Eye4Valu Posted October 21, 2014 Share Posted October 21, 2014 http://www.americanbanker.com/bankthink/broken-promises-to-fannie-and-freddie-investors-1070591-1.html Link to comment Share on other sites More sharing options...
muscleman Posted October 22, 2014 Share Posted October 22, 2014 The Sweeney trial, in the Court of Federal Claims, will be done by the end of next year -- if it even gets that far -- which I doubt. http://www.bloomberg.com/news/2014-10-14/fannie-mae-common-shares-rally-rebounding-from-judge-s-ruling.html An alternative thought is that me-too hedge funds are getting out of their preferred positions. Do you expect a settlement before trial? Link to comment Share on other sites More sharing options...
merkhet Posted October 22, 2014 Share Posted October 22, 2014 I think a settlement is a good possibility -- especially if the Iowa court determines soon that they have jurisdiction. (Basically, there is a mini-appeals process happening in the Iowa court right now.) Defendant briefs are due October 30th, and I expect a decision by the end of November. Again, as a disclaimer, I've been dead wrong so far on the litigation aspect of this case... Link to comment Share on other sites More sharing options...
brker_guy Posted October 22, 2014 Share Posted October 22, 2014 Is it just my perception or is the WSJ has an axe to grind against Fannie & Freddie and want to see them die? http://www.wsj.com/video/opinion-fannie-mae-forever/21AE4BE5-1CDD-4275-9A4F-1718169F552F.html I guess the good old proverb on opinion & a certain body part is right on. Everyone has one... Link to comment Share on other sites More sharing options...
merkhet Posted October 22, 2014 Share Posted October 22, 2014 Philosophically, the WSJ believes that government involvement distorts the free market -- so Fannie & Freddie surviving will continue to impose a distortion on the mortgage market. They're not necessarily wrong, but it's also not necessarily an immoral thing to distort the market to allow ease of home ownership for those who are lower on the socioeconomic scale. Link to comment Share on other sites More sharing options...
Eye4Valu Posted October 22, 2014 Share Posted October 22, 2014 Not sure that John Carney wrote that particular WSJ article, but he writes others for "Heard on the Street." They reflect the same negative sentiment. I think John Carney has a reputation for being very opinionated. In fact, a bio of him at his ex-employer, CNBC, states that he opposed all bailouts, thinks there was nothing wrong with letting Lehman fail, and favors insider trading. I know people of various economic/political orientations feel strongly one way or the other over bailouts, but favoring insider trading? Link to comment Share on other sites More sharing options...
ZenaidaMacroura Posted October 23, 2014 Share Posted October 23, 2014 Not sure that John Carney wrote that particular WSJ article, but he writes others for "Heard on the Street." They reflect the same negative sentiment. I think John Carney has a reputation for being very opinionated. In fact, a bio of him at his ex-employer, CNBC, states that he opposed all bailouts, thinks there was nothing wrong with letting Lehman fail, and favors insider trading. I know people of various economic/political orientations feel strongly one way or the other over bailouts, but favoring insider trading? There is an idea that allowing insider trading leads to more accurately priced securities -> more efficient markets. Link to comment Share on other sites More sharing options...
fareastwarriors Posted October 23, 2014 Share Posted October 23, 2014 Legal Undertow Tugs at Fannie, Freddie Courts Deal Another Setback to Investors http://online.wsj.com/articles/legal-undertow-tugs-at-fannie-freddie-heard-on-the-street-1413993808 Link to comment Share on other sites More sharing options...
brker_guy Posted October 23, 2014 Share Posted October 23, 2014 Another negative article from John Carney, I see. This guy is beginning to take this issue on Fannie and Freddie too personally, and he's generating a lot of craps! Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted October 23, 2014 Share Posted October 23, 2014 Another negative article from John Carney, I see. This guy is beginning to take this issue on Fannie and Freddie too personally, and he's generating a lot of craps! Let him. In fact, we should encourage him. I would love to pick up preferred and common for 50% less then where they currently trade in a few months when I have my year end bonus. Link to comment Share on other sites More sharing options...
muscleman Posted October 24, 2014 Share Posted October 24, 2014 I think a settlement is a good possibility -- especially if the Iowa court determines soon that they have jurisdiction. (Basically, there is a mini-appeals process happening in the Iowa court right now.) Defendant briefs are due October 30th, and I expect a decision by the end of November. Again, as a disclaimer, I've been dead wrong so far on the litigation aspect of this case... I remember last year you were quite skeptical about the litigation prospects. You said: "(2) Standing - This actually worries me. It's possible that none of the currently filed cases can go forward because the plaintiffs might lack standing to bring a case (directly and/or derivatively) against the U.S. government / FHFA / Treasury. Professor Epstein's response to this is not compelling to me. When you have to step back and rely on "general legal maxims" and/or "the broad unconstitutionality" of a legal statute, you are probably in trouble. Notice that he does not cite case law for any of this stuff..." What made you change your mind? Is it judge Sweeney's award for discovery? Link to comment Share on other sites More sharing options...
merkhet Posted October 24, 2014 Share Posted October 24, 2014 Yup. Sweeney allowing for jurisdictional discovery was a big deal. Additionally, their unwillingness to produce a whole administrative record combined with the stupidity of trying to say that the documents would have a destabilizing effect on the economy helped too. Why not produce the documents indicating your innocence and forego a lengthy trial process? Only if you have something to hide. Link to comment Share on other sites More sharing options...
muscleman Posted October 24, 2014 Share Posted October 24, 2014 Yup. Sweeney allowing for jurisdictional discovery was a big deal. Additionally, their unwillingness to produce a whole administrative record combined with the stupidity of trying to say that the documents would have a destabilizing effect on the economy helped too. Why not produce the documents indicating your innocence and forego a lengthy trial process? Only if you have something to hide. So what are the leverages of the government at this point? Can they interfere with the discovery process? Link to comment Share on other sites More sharing options...
merkhet Posted October 24, 2014 Share Posted October 24, 2014 Leverage re the recap or the litigation? Link to comment Share on other sites More sharing options...
muscleman Posted October 24, 2014 Share Posted October 24, 2014 Leverage re the recap or the litigation? The leverage re the litigation. I think the government wants to keep the current state as it is forever, but that seems impossible. They cannot exercise their 79% warrants on the common because then they will have to account for the trillions of liabilties on the national debt. But they can't just let this 79% value go away. That would be too stupid either. What will they do then? Letting the warrants expire and then keep taking all profits each month from Fannie and Freddie? Is that their plan? Link to comment Share on other sites More sharing options...
Mephistopheles Posted October 24, 2014 Share Posted October 24, 2014 Leverage re the recap or the litigation? The leverage re the litigation. I think the government wants to keep the current state as it is forever, but that seems impossible. They cannot exercise their 79% warrants on the common because then they will have to account for the trillions of liabilties on the national debt. But they can't just let this 79% value go away. That would be too stupid either. What will they do then? Letting the warrants expire and then keep taking all profits each month from Fannie and Freddie? Is that their plan? I believe as long as they own less than 80%, they don't have to take on the liabilities. That's what I'm afraid of too, keeping the status quo. Govt continues to make money to waste on earmarks and they get political bragging rights for taking the evil financial company money for the "benefit of taxpayers". Such a shame that our country has gotten to this point. I suppose it's normal for post-crisis eras. Link to comment Share on other sites More sharing options...
Mephistopheles Posted October 24, 2014 Share Posted October 24, 2014 http://finance.yahoo.com/news/fannie-mae-settles-shareholder-lawsuit-204627878.html $170 million settlement for misleading shareholders. So where does this money go? To the Government? Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now