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

[merkhet]

I may be missing something, but I only see the briefs for the plaintiff:

03/08/2016 - Final Reply Brief for Class Plaintiffs

03/08/2016 - Final Opening Brief for Class Plaintiffs

03/08/2016 - Final Reply Brief for Institutional Plaintiffs

03/08/2016 - Final Opening Brief for Institutional Plaintiffs

 

Does anyone have the briefs for the govt?

 

 

 

You can find the briefs on http://GSELinks.com

 

Did you click through to the archive?

[Steve_Berk]

I didn't see that--thanks for your help!

[Guest cherzeca]

I may be missing something, but I only see the briefs for the plaintiff:

03/08/2016 - Final Reply Brief for Class Plaintiffs

03/08/2016 - Final Opening Brief for Class Plaintiffs

03/08/2016 - Final Reply Brief for Institutional Plaintiffs

03/08/2016 - Final Opening Brief for Institutional Plaintiffs

 

Does anyone have the briefs for the govt?

 

 

 

You can find the briefs on http://GSELinks.com

 

here is a better link to what you want to read:  http://gselinks.com/Archive/Court_Filings.html

[BeerBBQ]

http://www.dsnews.com/news/04-19-2016/counsels-corner-the-battle-over-gse-profits-is-raging

 

"What that means is, if the government wanted to receive dividends under the original deal of more than the 10 percent, it had to exercise the warrants for the common and before a common stock dividend could be paid, there had to be a dividend on the junior preferred shareholders, the private preferred shareholders, because they had priority over the common. That was recognized in all the contracts—and when the dividend was paid on the 80 percent of the common, the 20 percent of the common held by private shareholders would get a prorata dividend. That was the original deal. What we're saying is the government isn't allowed to change that originally deal so that it takes 100 percent of all dividends equal to the entire net worth of the companies no matter what—which is what the Net Worth Sweep does."

[doughishere]

http://www.dsnews.com/news/04-19-2016/counsels-corner-the-battle-over-gse-profits-is-raging

 

"What that means is, if the government wanted to receive dividends under the original deal of more than the 10 percent, it had to exercise the warrants for the common and before a common stock dividend could be paid, there had to be a dividend on the junior preferred shareholders, the private preferred shareholders, because they had priority over the common. That was recognized in all the contracts—and when the dividend was paid on the 80 percent of the common, the 20 percent of the common held by private shareholders would get a prorata dividend. That was the original deal. What we're saying is the government isn't allowed to change that originally deal so that it takes 100 percent of all dividends equal to the entire net worth of the companies no matter what—which is what the Net Worth Sweep does."

 

 

This is an interview with Hamish Hume is a partner with Washington, D.C.-based firm Boies, Schiller & Flexner.

[merkhet]

Perry Oral Arguments Transcript (attached)

 

Edit: My bad. I'm not sure what happened. Download it from @doughishere's attachment.

[Steve_Berk]

i think there is something wrong with the file... if you can reload that would be awesome. I've been relying on my imperfect notes

 

Perry Oral Arguments Transcript (attached)

[doughishere]

here

14-5243.pdf

[Dazel]

I am once again interested here as judge Sweeney has unbound one finger of the plaintiff in this fight against injustice.

 

Call it Rocky vs Drago of the famous boxing match (Rocky-movie)which pit Rocky (USA) vs Drago (With his Russian governments help filled with steroids,the newest training techniques and an entire communist system behind him).

 

Oops except the roles are reversed? Who is capitalist and who is communist?

 

It appears as though Rocky (is a group of investors)... Has his hands tied behind his back and hands bound except for the one finger that judge Sweeney has released with allowing the public to see 7 documents....which has given Rocky (investors) a glimmer of hope...even against Adrianne's proclamation to rocky "that he can't win".

 

Ironically, the U.S treasury is acting like Drago and his communist cronies...beating to the tune of "I must break you!"....It is unamerican to have the governement hide the truth from the people...it is shocking that citizens outside the investment community are not screaming everywhere. Where is the transparency? Where's Ralph Nador? Where is congress? How does something so massive go unchecked? Fannie and Freddie have paid the government $250b...0 debt has been reduced!?

When ms McFarland told treasury that the accounting charges (no money was ever lost) were being reduced for $50b....a 10 year old would know that the gov dividend would drop by $5b a year at Fannie!

Why has the public not seen the internal projections on that from Fannie Mae that has to have been given to the government to support Ms McFarland's belief in permanent profitability...and the $50b reversal would happen soon? And the sweep comes the next week? Death spiral? Prove it.

 

Was Freddie Mac's Cfo at the beach at this time? There is no way that they were not saying the same thing to treasury! Yet in Perry's court hearing Friday we heard that Ms McFarland was only one opinion!!!!!

 

Are you kidding me? Monetarily this is the biggest heist of all time! Or is it? Let's see the facts... All the public should want to hear is the truth! What ever happened to that? While Judge Sweeney has to be commended for releasing 7 documents...really? What about the other 11,000 pages? How can there be justice without this for a "fair fight"?

 

While Rocky trained honestly in an old school manner at Jackson Hole (you can't make this shit up!)...Drago cheated (steroids) in his training....

 

Honesty prevailed....we all know who won! Justice.

 

Dazel.

[Guest cherzeca]

Read transcript after having listened to audio. My take is that millett was tough on both sides not just Olson. It is hard to read her. But I am left with view that her hypos betray a willingness to examine conservator action under statute so that it doesn't seem like she is coming from Lamberth-land where the facts don't matter as judicial review is barred. Because I see brown snd Ginsburg as willing to scrutinize conservator more than millett I simply can't get to where affirmance can be entertained as a reasonable expectation as to result. So while court was struggling with what standard to apply to determine whether NWS is valid as a C act I saw no inclination to say facts don't matter let's affirm

[hardincap]

said this earlier but to me a critical moment was when millett kept pushing for a standard to apply and olson, after some waddling around the issue, finally declares "you can never get into a sound and solvent situation if every nickel of profit you make is given to someone else." g says thats clearly true, and millett then shifts to, well could they have lawfully morphed into receivership and just not given notice? olson pretty clearly articulates in his closing remarks that this is essentially what the govnt has tried to do: run a shell game by declaring conservatorship but acting as a receiver

[doughishere]

said this earlier but to me a critical moment was when millett kept pushing for a standard to apply and olson, after some waddling around the issue, finally declares "you can never get into a sound and solvent situation if every nickel of profit you make is given to someone else." g says thats clearly true, and millett then shifts to, well could they have lawfully morphed into receivership and just not given notice? olson pretty clearly articulates in his closing remarks that this is essentially what the govnt has tried to do: run a shell game by declaring conservatorship but acting as a receiver

 

I dont get whats so difficult to understand about this statement.

[Steve_Berk]

I haven't yet reviewed the transcript, but I do recall her questioning Stern about a worst case scenario for the conservator, where the record establishes that they uniformly believed that fannie mae was going to be profitable but did what they did anyhow. She asks whether that would be contrary to acting as a conservator. Stern says they can do that and still act like a conservator without explaining why that's the case (quite a bold statement!), but then goes on to explain why the hypo is problematic, focusing on that instead. Millet doesn't come back and challenge or seek clarification on what Stern said yes to the hypo before he changed the subject. When i was listening, that led me to believe that she was questioning to see how he'd respond and that the lack of a follow-up, if anything, indicates it wasn't a line of questioning that she felt committed to. But you know how it is, reading tea leaves....

 

 

 

Read transcript after having listened to audio. My take is that millett was tough on both sides not just Olson. It is hard to read her. But I am left with view that her hypos betray a willingness to examine conservator action under statute so that it doesn't seem like she is coming from Lamberth-land where the facts don't matter as judicial review is barred. Because I see brown snd Ginsburg as willing to scrutinize conservator more than millett I simply can't get to where affirmance can be entertained as a reasonable expectation as to result. So while court was struggling with what standard to apply to determine whether NWS is valid as a C act I saw no inclination to say facts don't matter let's affirm

[rros]

I haven't yet reviewed the transcript, but I do recall her questioning Stern about a worst case scenario for the conservator, where the record establishes that they uniformly believed that fannie mae was going to be profitable but did what they did anyhow. She asks whether that would be contrary to acting as a conservator. Stern says they can do that and still act like a conservator without explaining why that's the case (quite a bold statement!), but then goes on to explain why the hypo is problematic, focusing on that instead. Millet doesn't come back and challenge or seek clarification on what Stern said yes to the hypo before he changed the subject. When i was listening, that led me to believe that she was questioning to see how he'd respond and that the lack of a follow-up, if anything, indicates it wasn't a line of questioning that she felt committed to. But you know how it is, reading tea leaves....

 

Nothing a President does is illegal. Not even what is illegal.

Nixon

 

Leave my Stern alone!

[Guest cherzeca]

said this earlier but to me a critical moment was when millett kept pushing for a standard to apply and olson, after some waddling around the issue, finally declares "you can never get into a sound and solvent situation if every nickel of profit you make is given to someone else." g says thats clearly true, and millett then shifts to, well could they have lawfully morphed into receivership and just not given notice? olson pretty clearly articulates in his closing remarks that this is essentially what the govnt has tried to do: run a shell game by declaring conservatorship but acting as a receiver

 

+1

[Guest cherzeca]

"When i was listening, that led me to believe that she was questioning to see how he'd respond and that the lack of a follow-up, if anything, indicates it wasn't a line of questioning that she felt committed to. But you know how it is, reading tea leaves...."

 

Right. On my second time through w transcript I could appreciate millett being more balanced than listening first time. As for tea leaf reading, this is a time honored tradition

 

[Steve_Berk]

I agree--tea leaf reading is my favorite pasttime. Also agree -- my first impression was very different than my subsequent reads. Initially thought Olson did a terrible job in his opening, but now think he wasn't bad at all. And do think that Millet was trying to explore this thoroughly and not just from one vantage point.

[Eye4Valu]

Why read the tea leaves when you can just read their ruling in a few months?

[Guest cherzeca]

Why read the tea leaves when you can just read their ruling in a few months?

 

Because investing is all about having the market agree with you...later

[muscleman]

http://gselinks.com/Court_Filings/Robinson/15-00109-0045.pdf

 

"The Court agrees that “justice delayed is justice denied.” Accordingly, the Court will stay this

action only temporarily. This temporary stay will give the MDL Panel a chance to rule on the

motion to transfer without significantly delaying this litigation and prejudicing the plaintiff. If

the MDL Panel has not ruled on the motion to transfer by July 1, 2016, the Court will lift the

stay and rule on the underlying motions to dismiss by July 29, 2016."

 

This means in addition to Perry Appeal which we will likely heard back in a few months, we will hear from the Robersons's case by July 29th.

I haven't tracked the progress of that case closely. Does anyone know if the judge will likely rule in our favor or in government's favor? I felt like this judge does not like government's delay strategy when he used the language above.

[Guest cherzeca]

@mm

Not exactly. If panel decides to move case away from judge before July 1 then we won't hear from ky judge again. He was a bush 43 appointee

[doughishere]

Off to the Bar....maybe there will be drunken posts by me later. 

 

 

Dear Mr. Langer,

 

We write on behalf of the Treasury Department in response to this Court’s

order from the bench inviting supplemental briefing on the effect of 12 U.S.C.

§ 4623(d) on this suit. The Treasury Department does not plan to file its own

supplemental brief addressing this question.

 

Sincerely,

\

 

 

 

http://twitdoc.com/view.asp?id=265049&sid=5OIH&ext=PDF&lcl=4623Treasury.pdf&usr=hill_matt

 

 

Plantifs...below

 

https://www.scribd.com/doc/310127483/Boies-Brief-on-U-S-C-4623

 

 

ARGUMENT

 

I.

SECTION 4623(D) APPLIES TO REGULATORY ACTIONS TAKEN BY THE “DIRECTOR,” NOT ACTIONS TAKEN BY“THE AGENCY” AS CONSERVATOR.

 

II.

SECTION 4623(D) CANNOT BE READ TO BAR ANY DAMAGE CLAIMS AGAINST FANNIE, FREDDIE, OR FHFA.

 

[rros]

Can the regulator tie the hands of the conservator? But since Watt is both, he could have undone Lockhardt's action had he wanted/needed to.

[merkhet]

Plantifs...below

 

https://www.scribd.com/doc/310127483/Boies-Brief-on-U-S-C-4623

 

Um, footnote 13 & 14 from the Class Plaintiffs' brief seem dispositive.

 

fn. 13 At oral argument, Class Plaintiffs’ counsel was unable to answer the Court’s question whether we raised the constitutional avoidance doctrine in our opening brief. We did raise it in our opening brief. Doc.1602879 at 28-29. It was raised with respect to Defendants’ argument that our derivative claims are barred. It was not raised with respect to FHFA’s argument that § 4617 bars direct claims because FHFA did not make that argument in the District Court, which is why the District Court never addressed it, instead addressing plaintiffs’ direct claims on the merits. JA347-56. After FHFA made that new argument, we rebutted it in reply, including with reference to the constitutional avoidance doctrine. Doc.1602880 at 5.

 

fn. 14 At argument, Defendants’ counsel made no effort to defend the District Court’s reasoning in dismissing our direct breach of contract claims, and never responded to our arguments showing the flaws in that decision and the merits of our claims.

 

So, if FHFA conceded that §4617 does not bar direct claims, and Ginsburg + Brown and/or Millett decide that a receivership (in everything but name) has occurred, then that's the end of the game right there. The only way Lamberth avoided this was to say that no liquidation had begun. (In the back of my mind, though, there's a nagging question about whether an appeals court can make that seemingly factual and/or fact-specific determination...)

[Guest cherzeca]

I've been running through decision scenarios in my mind and while I think there are many possible favorable outcomes that do not require further fact-finding I tend to think that would be this panel's preference (certainly if they try to get unanimity). The reason why there may be a willingness to reverse though is the difficulty of coming up with a standard of appropriate conservator conduct, which millett asked about 5 times. If g and b just conclude the conservator can't get to sound and solvent as a logical matter with NWS then what facts would be necessary beyond that?