Tags
#FannieGate, $fmcc, $fnma, DOJ, Fannie Mae, Freddie Mac, HERA, Margaret Sweeney, Third Amendment Sweep, Treasury
GSE Shareholder Fairholme Describes Maximum Delay Discovery Rigmarole
Fairholme is trying to get the government to produce documents that the government doesn’t want to produce and a judge in the court of claims ordered to be produced.
The government appealed the judges order and Fairholme filed their response in support of Judge Sweeney’s order suggesting the government’s approach is one of maximum delay.
Fairholme openly wonders what the purpose is of discovery if one party can simply assert privilege over documents where privilege simply does not apply to prevent from handing them over.
Something wild has happened and there’s nothing you can do about what’s happened, but you can still take action and share in what is going to happen. In unprecidented fashion, Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) were placed into conservatorship in 2008 when they had their highest levels of capital in history. Their entrance into conservatorship was not due to a liquidity crisis but was due to the board acquiescing when government employees asserted authority. Since then, they’ve continued to generate large amounts of cash in spite of their conservator justifying their conservatorship by forcing them to write down their assets to issue a related party stock.
The government, although it is taking the net worth of the companies, has not consolidated them onto its balance sheet because of private shareholders like myself continuing to own some of the publicly traded shares that are economically worthless as long as the government takes the net worth. You might be thinking to yourself that this sounds a lot like accounting fraud and indeed the smaller accounting fraud lawsuit was just settled out of court. The larger of the two remains active. The problem with Fannie and Freddie is that they make money so consistently that the government has budgeted their income as its own and has increased their fees to consumers for itself since conservatorship has begun. We have seen the actual government bailouts, where companies weren’t as good. Those were not worth keeping control over and spun back into the private markets. The main reason to invest in Fannie Mae and Freddie Mac is the same reason that the government is zeroing them out in the first place: they make too much money too consistently. Conservatorship hasn’t changed this fact and instead has drawn increasing scrutiny to it especially since the accounting trickery has been placed into the rear view mirror.
Investment Thesis: Lawsuits have been filed against various actions taken against Fannie Mae and Freddie Mac by their shareholders and if any of these puts an end to the net worth sweep or results in other shareholder positive events then shareholders stand to benefit. Reversing the net worth sweep could result in Fannie Mae and Freddie Mac eventually returning to business as usual which would eventually make their preferred shares worth par. Their common shares used to trade over $50. Part of their entrance into conservatorship was the government issuing to itself 79.9% warrant coverage. These warrants haven’t been exercised yet but I’m expecting something similar to AIG assuming the companies remain operational. Common shares trade at less than $2, leaving lots of potential upside on the table and preferred shares trade at less than 20% of par.
Court Of Appeals For The Federal Circuit
Fairholme filed their response to the government’s petition for a writ of mandamus:
We learn that plaintiffs plan to amend their complaint and that they are alleging that the government placed Fannie and Freddie into conservatorship even though an analysis of the companies’ financial statements shows that throughout the crisis their income, retain reserves, and unencumbered assets were always more than sufficient to cover their debts and other expenses. Plaintiffs highlight the questionable nature of the accounting policy decisions that resulted in massive temporary draws and reversals split by the implementation of a net worth sweep. Plaintiffs also show that the write offs were more aggressive at Fannie and Freddie than at other financial institutions that held far riskier portfolios.
Plaintiffs speak candidly about how the government has been improperly asserting privilege because when they question it, the government has a history of removing privilege designations from handfuls of the documents. Plaintiffs suggest that this is a strategy of maximum delay:
Plaintiffs show a need for these documents by demonstrating that Ugoletti’s sworn declaration was undermined by discovery which he later recanted.
Further, their intended purpose by filing discovery documents in multiple court rooms is simply to prevent the government from asserting untrue facts in other courts:
Plaintiffs go through the way a Writ is supposed to work and show that the government is misconstruing what they are for:
Plaintiffs openly wonder why the government references materials from the agency who they are claiming isn’t in charge:
Plaintiffs conclude by openly wondering that if disclosure is not supported here then where?:
It would seem that Judge Sweeney ruled favorably for Plaintiffs and rather than complying with discovery, the government decided to file a Writ to buy time while Perry Capital was ruled. Plaintiffs are looking for discovery to be completed before they amend their case and they claim that the government’s history of not been forthcoming with documents as evidence that this is simply more of the same.
Summary and Conclusion
The government doesn’t want to produce documents that they have marked as privilege. Judge Sweeney ordered the government to hand them over saying that of a sample that plaintiffs claim is effectively random 100% were improperly designated as privileged. Further, Judge Sweeney ordered the government to explain why they shouldn’t have to pay plaintiff legal expenses for making plaintiffs file the motion to compel. The government responded by appealing Judge Sweeney’s motion to compel. The government says that in effect, Judge Sweeney doesn’t understand the discovery process or how privilege designations work.
According to Plaintiffs, the government’s understanding behind what a Writ of Mandamus is for is being improperly applied in this case. If you study the accounting statements, the government has taken over $100B of cash out of Fannie Mae and Freddie Mac since conservatorship has begun. The government has done so by writing down assets and later writing them back up. The neat trick was that between the two events the government entered into the net worth sweep, thereby zeroing out existing shareholders.
I think that FHFA has fiduciary duties that it simply has chosen to ignore. There is no other explanation for why the shares remained outstanding in 2008. FHFA’s argument is that the shareholders that own these shares have no legal right to breach of contract claims, among others. If true, why did PricewaterhouseCoopers settle with a handful of such shareholders? Perhaps PricewaterhouseCoopers didn’t believe FHFA’s arguments as much as FHFA does. I don’t either.
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nonlag ma said:
Some genuinely wonderful information, Gladiolus I detected this. “The minute one utters a certainty, the opposite comes to mind.” by May Sarton.
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Anon4 said:
DOJ likely wants to wait till current admin ends. But it cannot tell judge so. It can, however, discuss with plaintiff. Plaintiff will be okay with that.
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anon said:
My guess. If Watt is not short of money, he will resign soon. Or Trump will work with Congress to get authority to control him directly. It may hurt housing affordability, but Obama does not care. How stupid.
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anonymous said:
Already there is appeals court ruling about single director independent agencies.
If congress does not change courts may change it.
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anon said:
needs a lawsuit
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hll7575 said:
Remember politicians are very different than the rest of us. There are always political calculations behind the scenes. Also, they are not always right, just look at the failed Hillary campaign. If some way, we are truly at the mercy of a few truly powerful hedge fund guts now once Obama will be soon out of the picture. History won’t be kind to Obama for so many lost opportunities to do the right things.
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anonymous said:
“failed Hillary campaign”
———————————————
Hillary won the popular vote. Do not underestimate her in anyway.
She had the support of DC Dems, DC Reps, WS, DC insiders, and many more.
She has been a fairly good “politician”. Because of her long legacy in politics and the crony campaign supporters, many people did not vote for her.
She should have distanced herself from cronies.
Association with WS big money hurt her more than anything else.
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Dean said:
timhoward717 is back up……….nothing new posted though
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hll7575 said:
I noticed too. Interesting. I hope timhoward717 to continue his blog or give it a closure of some sort. Apparently things are dicey that maybe there are things behind the scenes going on right now – just a wild guess on my part.
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Quote From the Real Tim Howard said:
Unlike ROLG I’m not a lawyer, but I would think that to get a definitive settlement from the government you would need to include all of the lawsuits, and all of the plaintiffs. That would include Washington Federal, which has challenged both “the takeover and the terms” of the 2008 conservatorship.
This conservatorship, of course, allowed Treasury (and FHFA) to balloon Fannie and Freddie’s non-cash expenses and force them to take $187 billion in senior preferred stock they didn’t need, paying an after-tax dividend of 10 percent. Because of those mammoth dividends—along with the net worth sweep—by the end of this year Fannie and Freddie will have paid Treasury $256 billion on “borrowings” of $189 billion. That leaves Treasury with $67 billion that it essentially paid itself for using the companies as an instrument of public policy during and after the crisis.
If we were to unwind the net worth sweep by retroactively treating each of the sweep’s quarterly remittances in excess of the $4.7 billion dividend payment as a reduction in Treasury’s outstanding senior preferred stock, Fannie’s and Freddie’s senior preferreds both would be paid off (or almost paid off) by the end of this year. Fannie and Freddie would owe no further dividends to Treasury, but Treasury wouldn’t owe anything to the companies either. That is, Treasury would get to keep the $67 billion in net dividends that Fannie and Freddie have paid it to date. Why shouldn’t that be part of the settlement? The Washington Federal plaintiffs would say, “We’ll drop our suit, and you can keep the $67 billion that you granted yourself with the terms you unilaterally imposed on us, but in exchange for that you [Treasury] have to give up the warrants. Sixty seven billion dollars of the shareholders’ money is enough for us to pay you in this settlement.” That, to me, seems more than fair.
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nankerphelge64 said:
does anyone know if Donald Trump as President -elect has authority to view all the protected documents ?
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anon said:
This documents will be viewed by his legal counsels. Anyone can view it if DOJ agrees.
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anonymous said:
Probably it depends on the defendants to litigation and not on attorneys of DOJ. DOJ attorneys may have been reluctantly taking these type of fishy cases. Such type of cases are lose-lose for their careers.
For the private attorneys representing defendants, it is a bonanza. The meter keeps on running forever with mushrooming law suits against defendants.
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anonymous said:
Probably yes. Currently he gets briefed on everything.
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th717 said:
A Quick Review of 12 U.S. Code § 4617(a)(3)(A)-(L) as it Relates to the Regulated Entities.
https://th717.wordpress.com/2015/04/29/a-quick-review-of-12-u-s-code-%c2%a7-4617a3a-l-as-it-relates-to-the-regulated-entities/
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thombiz said:
Great read. Thank you.
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Anon said:
Investors Unite Teleconference: What is Risk Sharing? And how does it Work?
– November 11, 2016
On Tuesday, November 15 at 10:30 am EST, Investors Unite will hold a teleconference to discuss risk sharing in the secondary mortgage market, a major policy that could affect Fannie Mae and Freddie Mac moving forward.
The teleconference will feature Investors Unite Executive Director Tim Pagliara, former Chief Financial Officer and Vice Chairman of the Board of Fannie Mae Tim Howard, and the Head of External Affairs for the Community Mortgage Lenders of America Rob Zimmer.
To join the teleconference, please RSVP to media@investorsunite.org.
WHO: Tim Pagliara, Investors Unite Executive Director and CapWealth Advisors Chairman and CEO
Tim Howard, Former Chief Financial Officer and Vice Chairman of the Board of Fannie Mae
Rob Zimmer, Community Mortgage Lenders of America Head of External Affairs
WHAT: Investors Unite Risk Sharing Call
WHEN: Tuesday, November 15th, 10:30 am EST
DIAL IN: 800‑895-2195; Conference ID: Investors
RSVP: Please RSVP to media@investorsunite.org
About Investors Unite: Formed by Tennessee investor and CapWealth Advisors Chairman and CEO, Tim Pagliara, Investors Unite ( investorsunite.org ) is a coalition of over 1,400 private investors from all walks of life, committed to the preservation of shareholder rights for all invested in Fannie Mae and Freddie Mac. The coalition works to educate shareholders and lawmakers on the importance of adopting GSE reform that fully respects the legal rights of Fannie Mae and Freddie Mac shareholders and offers full restitution on investments.
###
http://investorsunite.org/investors-unite-teleconference-risk-sharing-work/
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Anon said:
Donald Trump Makes The Fannie And Freddie Stock Boom Great Again
On Thursday, billionaire Bill Ackman stood on a Manhattan stage at a conference put on by The New York Times, heaped praise on Donald Trump, and said the President-elect would use his art of the deal instincts to reach a bargain on Fannie Mae and Freddie Mac, returning the government-controlled mortgage giants to private ownership and benefiting Ackman’s hedge fund greatly.
“I think Fannie and Freddie are going to get resolved in the first 12 months of this new administration, and I’m looking forward to having my second meeting with Donald Trump and negotiating a deal,” Ackman said.
http://www.forbes.com/sites/nathanvardi/2016/11/11/donald-trump-makes-the-fannie-and-freddie-stock-boom-great-again/
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anonymous said:
One thing any one can predict with 100% centainty when FnF pps goes up — negative articles by JC on WSJ
http://www.wsj.com/articles/fannie-freddie-shares-soar-even-as-fate-remains-foggy-1478824898
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D said:
just read that they are considering jeb hensarling for treasury that can’t be good
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thombiz said:
http://www.cnbc.com/2016/11/11/rep-hensarling-i-havent-sought-the-treasury-secretary-job-but-i-can-help-on-capitol-hill.html
He doesn’t want the job.
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D said:
Thanks Thom read the headline on scottrade he scares the Scnizzel outta me (hate that guy)
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anonymous said:
Please make a habit to paste url.
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anon said:
he does not have the technical skills
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anonymous said:
Whenever FnF pps go up, they come up with such news.
It is time to see once again familiar faces to come out and say something to crash the pps.
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anon said:
@kenblackwell @SMnuchin The real losers in this campaign were the Democratic and Republican establishments. I hope Trump does not hire those losers. They are bad for USA.
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anon said:
@realDonaldTrump The real losers in this campaign were the Democratic and Republican establishments. I hope Trump does not hire those losers. They are bad for USA.
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Travis said:
Is it not incredibly interesting that the stock has gone up a dollar on no news, simply the fact that people now think that there probably will be some justice in the end for F&F? Before “we” knew the truth, but were not sure the truth would ever come out as we didn’t trust the government. Now, still no news but we tend to believe the truth will come out and things will be made right – EVEN though up till now we have had people say the GOP hates the GSEs wants to get rid of them etc. Before the election people speculated on how bad a GOP win would be. Amazing how a bit of perceived honesty can change perception!
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thombiz said:
Found on internet: Ken Blackwell being chosen leader of the transition team is a big deal for us. In 2014 he wrote an article about the Treasury stealing from FnF. https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=201611101551MRKTWTCHNEWS_SVC000647
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thombiz said:
This looks like it could lead to privatization of FnF. The process would be to revoke their charters as GSE’s and sell to existing corporations or issue new private charters. This would severely restrict any politicizing of them in the future. It should also reduce the current housing initiatives making them negotiated assistances contracted between Fannie and Freddie and the government. In other words, as FnF would exist as private companies, the government would have to form a contract with FnF to provide assistance in achieving the housing goals of the government.
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thombiz said:
Let’s talk restitution. See: https://www.federalcharges.com/government-fraud-laws-charges/
First we must satisfy a key requirement to prove fraud (on the path to restitution) and that is “intent”. This is easily proven. HERA provided for the FHFA to act independently (that was breached by and agreement with the Treasury) to preserve and conserve the assets of FnF (that was breached by the sweep amendment). The intent to do this was announced in the White Papers of Feb 2011 titled “Reforming America’s Housing Finance Market” authored by the Obama Administration, the US Treasury, and HUD. In this report to Congress, they lay out their plan to “wind down” FnF.
A year later, in FHFA’s Strategic Plan for Enterprise Conservatorships: The Next Chapter in a Story that Needs an Ending, Feb 21, 2012, Edward DeMarco (Director of FHFA) announces his plan to “wind down” FnF and replace them with new infrastructure, based on a commitment to the White Papers of Feb 2011 (mentioned above).
Later in August and Sept of 2012, FHFA signs an agreement with Treasury for full net worth sweep, and does so based on a commitment to the White Papers of 2011.
Clearly, intent to breach HERA is proven by the government’s own announcements.
So, lets talk restitution. I see it as unwinding everything that was based on fraud. It is illegal to let stand any actions based on fraud. This means all money in excess of that used to bailout FnF must be returned. As well, this money shall have earned an annual interest rate of 10%, the same rate acceptable to the Treasury for support of FnF.
I don’t know about punitive damages. Seems like I read somewhere that you cannot claim punitive damages when it comes to the federal government. Perhaps someone can shed some light on this.
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RH said:
>>This means all money in excess of that used to bailout FnF must be returned. As well, this money shall have earned an annual interest rate of 10%, the same rate acceptable to the Treasury for support of FnF.
Do you actually think that will happen though?
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thombiz said:
We all must act within the same rules. So yes, I see that as fair and just by all parties.
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thombiz said:
You must keep in mind, FnF were the only “tools” available to clean up the subprime mortgage mess, and keep the TBTF banks from collapsing. By “tools” I mean they were the only way to clean up millions and millions of toxic and predatory mortgages. Last I read, FHFA had removed the predatory aspects and refinanced more than 14,000,000 mortgages, allowing deserving home buyers to stay in their homes. Those that could not be corrected were sold off to the public at market value. There were no other “tools” available at the time to do the work of this magnitude except FnF. It was an heroic achievement worthy of the same consideration the Treasury demanded in it’s bailout……10% interest.
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thombiz said:
Keep in mind, the government could have “hired” FnF to clean up all those toxic mortgages, but instead, they forced them into a conservatorship which turned into an attempt to eliminate them. That is not fair or just. You have to pay for your mistakes.
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hll7575 said:
Click to access 13-465-0349.pdf
So the government got another extension from Honorable Judge Sweeney’s court. It is looking more likely Obama is going to run off the clock leaving GSEs’ fate to the Trump administration. Smart move or completely irresponsible?
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anon said:
The chance of Obama’s releasing GSEs = The chance that financial establishment says GSEs are good for borrowers = Wall Street is not interested in money.
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Dean said:
Can’t see BO allowing the illegal sweep of $ to go into a “republican treasury” on 1/20/17.
The good thing is there is no pending ruling, additional filings or granting more time for this particular date. AFTER this date this the direction of housing is OUT of the democrats hands.
They must act before this date…………
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Anon said:
Ackman Sees Fannie Issue Resolved Under Trump Administration
“I think Fannie and Freddie are going to get resolved within the first 12 months of this new administration, and I’m looking forward to having my second meeting with Donald Trump and negotiating a deal,” hedge fund manager Bill Ackman says at conference in NYC.
http://www.bloomberg.com/politics/trackers/2016-11-10/ackman-sees-fannie-issue-resolved-under-trump-administration
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anonymous said:
Along with all other things Trumps wants to undo, the list should include;
1. Respecting constitutional rights of citizens, end abominable FnF conservatorship and return FnF to rightful owners
2. Undo all unreasonable treatment of FnF and FnF shareholders
3. Abolish SPSPA in total and let FnF and FnF shareholders be treated fairly retroactively.
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anonymous said:
Trump should consider taking the help of Mortgage experts like FnF CFO Timothy Howard.
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anonymous said:
By Andrea Riquier
Will the Trump administration undo the 2012 sweep of profits to the Treasury?
Shares of Fannie Mae and Freddie Mac have rallied this week as President-elect Donald Trump surrounds himself with advisors seen as sympathetic to shareholders of the two mortgage companies.
Shares of Fannie are up about 41% since Tuesday, and Freddie shares have risen about 46% in that time.
Fannie (FNMA) and Freddie (FMCC) were placed into federal conservatorship during the 2008 financial crisis, and in 2012 the Obama administration amended the terms of the 2008 agreement to sweep quarterly profits from the two enterprises, a move that’s been challenged in court by shareholders.
Ken Blackwell, who’s been tapped to lead the domestic transition team, wrote an op-ed (http://thehill.com/blogs/congress-blog/economy-budget/207937-treasury-stealing-from-fannie-and-freddie-shareholders) in 2014 in which he called the Treasury arrangement “theft of private property.” In the piece, Blackwell noted that there is a “bipartisan consensus on how to wind down Fannie and Freddie.”
On Wednesday, the Wall Street Journal reported ( http://www.wsj.com/articles/donald-trumps-financial-advisory-team-stocked-with-wall-streeters-1478730578?mod=djemMoneyBeat_us ) that hedge fund investor John Paulson had been tapped to be a Trump advisor because of his understanding of the housing market. Paulson is known ( https://www.amazon.com/Greatest-Trade-Ever-Behind-Scenes/dp/0385529945/ref=sr_1_1?ie=UTF8&qid=1478808291&sr=8-1&keywords=the+greatest+trade+ever ) for shorting the subprime mortgage market as the housing bubble inflated a decade ago.
Paulson’s company has donated extensively ( http://www.wsj.com/articles/bets-on-fannie-and-freddie-get-help-from-lobbyists-1463087581 ) to nonprofits and lobbyists advocating for the release of the enterprises from government controls, according to an earlier Journal article.
Other Trump advisors have a less explicit stake in ending conservatorship, but are likely to be sympathetic to the shareholder interests. Steven Mnuchin, a Goldman Sachs veteran who’s reportedly on the short list ( http://www.marketwatch.com/story/gingrich-palin-among-possible-trump-cabinet-picks-obamacare-defenders-vow-total-war-2016-11-10 ) to be Treasury secretary, serves on the board ( https://searsholdings.com/invest/corporate-governance/board-of-directors ) of directors of Sears Holdings(SHLD) with Bruce Berkowitz, CIO of Fairholme Capital Management, one of the firms leading the shareholder lawsuits ( http://www.marketwatch.com/story/what-one-big-fund-is-saying-about-fannie-freddie-2014-03-10 ).
-Andrea Riquier; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
November 10, 2016 15:51 ET (20:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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M said:
Wow timmy has clsed twitter and wordpress. Way to keep the faith
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anonymous said:
Accounts may have been hacked.
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M said:
Yes. Sure. Or he might have taken his bat and ball and headed off the field. He has said over and over again how much a friend of the GSEs obama and watt are. Now the stock is up 50 on a solid trump victory.
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theraven35 said:
He was a fraud, and he was LIKELY not a proponent, but an opponent hired to keep shareholders in line while the stealing continued. “I have so much to write, but we don’t want our enemies to use it…” My guess is the ENEMIES he was referring to were shareholders NOT PART OF FHFA.
Lesson learned, yet again…trust no one, especially an anonymous, arrogant politician, on the internet.
He can go rot in hell…he played everyone here like a fiddle…kept us all anxiously waiting, telling us Mel Watt “was a friend,” all the while the idiots sat by doing NOTHING and STEALING PRIVATE PROPERTY.
He is a TimCOWARD717 from here on out. Shutting down his twitter and blog…COWARDICE, and clearly because he lost.
And people wonder why Trump was elected…when you have folks like Dannel PATRICK Malloy “helping” your cause, YOU LOSE.
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FannieFan said:
22 Million FNMA shares sold so far today – I understand the buying – I don’t understand the selling! Who would sell for $2.25 when it will soon be much higher.
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hll7575 said:
FNMA closed @ $2.52 today – another great run! I can understand why some traders are selling. In the past 2+ years, there were so many false hopes that didn’t pan out. This time Obama is forced to show his true colors (pun intended) with no time to contemplate on his politics. With or without GSEs , Obamacare as we know it is likely over. Why HELP GOP continue trapping the GSEs for “free” money $20+/year?
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hll7575 said:
$20B+/year
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Jeanette Morgan said:
So what are you saying? Is President Obama contemplating release?
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link said:
Dear President Obama,
If you are concerned about the American people, and if you are concerned about the constitution and the rule of law, and if you are concerned about your legacy, then the time has come for you to end the “Sweep” and release the GSEs from conservatorship. It is your last unfinished piece of business from the 2008 recession. You claim to have rescued the financial sector, and the auto industry. Release Fannie and Freddie and you can be the president who saved the housing industry and the American Dream of homeownership.
Homeownership is at its lowest level since 1965. For many in the middle-class, owning a home is one of the few ways to begin to acquire some measure of wealth and security. Since the Great Depression, Fannie Mae has made home ownership affordable for millions of Americans. Fannie Mae and Freddie Mac have also served the greater good with their affordable housing initiatives. The housing market and associated industries account for almost 20% of the economy. Anything you can do to bolster the housing market, will provide a measurable benefit to our economy.
Your term as president is nearing its end. Within months, the Republicans will control all three branches of government. They are not big fans of GSEs. They particularly dislike affordable housing initiatives which are so important to many struggling Americans. If you take action now, Fannie Mae (which has helped Americans and the American economy since the New Deal) and Freddie Mac can be restored to full vitality. If you take no action, then their fate will be in the hands of Donald Trump. Perhaps he will release the GSEs and claim their recovery as part of his legacy. Or perhaps, he will just dismantle the GSEs, and in the process, dismantle the dreams of so many Americans.
You must take action now in order to insure the future of the GSEs and the middle-class. End the strangle-hold the Treasury has on the GSEs and release them from the dubious FHFA “conservatorship”. Act now and your legacy can include: “Saved the American Dream”.
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Anon4 said:
One strategy is to sue FHFA on illegal structure. Make it report to Trump. Then Trump fires Watt.
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anonymous said:
Texas lawsuit does that.
It surprises why the existing lawsuits have not been amended to include this constitutional violation.
FnF conservatorship is totally controlled by administration, so if Trump wants to end FnF conservatorship, he can hint to current administration to RRR FnF.
It can be very simple, change PSPA retroactively to apply the same terms used for bank bailouts even though FnF never needed bailout. Return all plundered money and recapitalize FnF. Fed should also provide reasonable line of credit to FnF until the FnF build necessary capital reserves.
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hll7575 said:
Watt is already on his way to the chopping block, like all political appointees between administrations transition.
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Anon4 said:
I think his term is 5 years.
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anonymous said:
As per HERA FHFA director can be removed only for a cause.
As per appeals court decision it may become just a political appointment
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thombiz said:
In HERA section 1312 it states the Director’s term is 5 years unless removed for cause.
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Dean said:
Timhoward 717 shut down again?
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Chip Mattingly said:
the twitter account was suspended as well. Wonder what is going on?
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anonymous said:
The website and twitter accounts may have been hacked.
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D said:
I think the plan was for hrs to takeover and to turn this into a utility. That has been shooken up by trump. Now who knows, at least, we know berkowitz was a supporter of trump. Whatever that’s worth
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hll7575 said:
One day after the election, our office (fed here) already sent out notice that a transition team will be visiting soon. So I expect FHFA/Treasury are super busy now strategizing how to deal with the GSEs. #Fanniegate has been so convoluted that even Obama decided to do the 3R, there’s probably not enough time to carry it out before January 2017.
On the other hand, if we have a few FnF investors close to Trump’s administration, it is possible that a settlement may be in the works to compensate shareholders and get us out of the way in order to carry out GOP’s “reforms” of housing mortgage financing?
Next few days/weeks will give us a hint from the price and volume performance of the GSEs. If both price and volume keep rising, it’s indication that accumulation is ongoing.
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thombiz said:
Normal, every day volume is about 1.6 million shares. On Nov 9, the volume was approx. 13 million shares. I don’t know who is selling, but the buyers were out in force.
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hll7575 said:
https://searsholdings.com/invest/corporate-governance/board-of-directors <- from gselinks.com
"Steve Mnuchin, Trump's likely Treasury Secretary, is on Sears board of directors with Bruce Berkowitz."
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Anon said:
Trump’s Financial Advisory Team Stocked With Wall Streeters
http://www.wsj.com/articles/donald-trumps-financial-advisory-team-stocked-with-wall-streeters-1478730578
John Paulson, a hedge fund billionaire, was tapped as an adviser because of his understanding of housing, one adviser said. Mr. Paulson, who made a spectacularly well-timed bet shorting the U.S. subprime mortgage market in 2007, has more recently taken large stakes in the mortgage-finance companies Fannie Mae and Freddie Mac, which have been in a government-run conservatorship since the 2008 financial crisis. Shares of Fannie Mae were up nearly 17% to their highest levels of the year on Wednesday.
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The Stig, MD said:
I like this blog a lot better than fake TimHoward’s, whose authenticity and judgment I’ve come to question given his blog’s neglect. Well actually, it’s the general lack of real information in his posts which amount to little more than cheerleading that’ve roused my suspicions. For a long time.
Not that it mattered much; I don’t rely on blog posts for investment decisions. They do help for keeping up to date on some court cases, and for some entertainment.
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hll7575 said:
Like Timhoward717 or not, for a while, his blog was THE ONLY sensible outlet of our causes, so if he chose to restrict or terminate his blog, it wasn’t all bad and actually critical in keeping our causes visible.
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anonymous said:
It was far better than YMB.
It served its purpose very well.
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The Stig, MD said:
You guys are right; I was rather condescending in my post and to be fair, the blog was far better than YMB and helpful for discussions. I’d like to apologize to the community for that, especially since we are all in this together. The light at the end of the tunnel is looking brighter, good luck to all!
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anonymous said:
Many times believers develop doubts.
Your doubts should make us look back and think about the important role played by Timhoward717.
During that time there were few who lead FnF investors. Timhoward717 was prominent in leading the discussion. May be in the last 6 months Timhoward717 has not been active.
However we should encourage anyone who is doing whatever little they could, in helping the cause. Let us be kind to all others who are in this struggle against abominable conservatorship.
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anon said:
I voted for OB first time. Not the second time. This election sends a message to Washington: change!
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anonymous said:
Very soon, after they enter the bubble they lose touch with common people.
Probably there are not enough hours in day for a single person to the job.
It is an outdated concept.
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Patrick Fitzgerald said:
Assuming these court cases bleed into the Trump Administration, what are the chances that a Trump Treasury Department will continue the Obama position or will it be willing to craft a deal?
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The Stig, MD said:
From what I’ve been reading, it seems John Paulson’s on his economic advisory council. Paulson has also worked with Steven Mnuchin on a board somewhere, but I don’t remember where. It looks like Mnuchin is being vetted seriously for Treasury Secretary. He’s done some serious work in CA turning around the troubled IndyMac into OneWest, which is now among SoCal’s largest banks. A part of its income derives from servicing Fannie and Freddie’s loans, so I’m not sure whether killing the GSEs would do his cash flows any good…
http://www.bloomberg.com/news/articles/2012-03-22/from-indymac-to-onewest-steven-mnuchins-big-score
Icahn was thrown out there in the past for the gig, but he declined just today.
http://www.newsmax.com/Politics/carl-icahn-rules-out-trump-treasury-secretary/2016/11/09/id/758025/
If you recall, Paulson owns a stake in FNMA, but I’m unsure whether he still does now.
http://www.wsj.com/articles/bets-on-fannie-and-freddie-get-help-from-lobbyists-1463087581
If I have to speculate, I would say that since Trump’s support derives mostly from his populist anti-Establishment agenda, he’ll be careful not to mess around with anything that could further shrink mortgage credit (and thus kill more jobs), which translates into leaving the 30yr FRM alone. He could strike a deal with TBTFs on privatization or reformation into a utility model, which though would still compete with them, opens up lending volumes for the huge housing-associated industries. Having a couple of WS bigwigs on his team may look bad (as democrats certainly will spin it), but it should help in getting the deals made. Above all, Trump is a MODERATE Republican whose business is real estate, so plans resembling Hillary’s TBTF-controlled government monopoly are probably out the door.
The key thing to remember is that Obama was handpicked by Podesta for his utter inexperience, arrogance and thus gullibility – he was handed 2008 on a reparations platter. If you’ve been following Wikileaks, Podesta had been planting Obama’s cabinet with top CitiBank choices early in the election cycle to ensure favorable treatment (and killing the GSEs) throughout BHO’s tenure. The entire Establishment furor over Trump’s election is for his insider knowledge and hence relative imperviability to their demands. His power as of now is from his populist support, and if he aims to keep it against the entire GOP Establishment Congress, he’ll likely deliver on at least some of his promises. That will likely involve keeping the GSEs around.
http://wallstreetonparade.com/2016/10/wikileaks-bombshell-emails-show-citigroup-had-major-role-in-shaping-and-staffing-obamas-first-term/
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Anon said:
REPLY IN SUPPORT OF PETITION FOR A WRIT OF MANDAMUS TO THE UNITED STATES COURT OF FEDERAL CLAIMS
Click to access Gov-Reply.pdf
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hll7575 said:
Timhoward717 restricted his blog’s access again.
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anonymous said:
probably he is depressed that his Goddess Clinton is not going to be the next President
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thombiz said:
There is still work to be done so timhoward717 or not, we move forward. His choice.
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anonymous said:
We do not completely understand the person behind the timhoward717 and his visions for liberating FnF from treacherous absurdity of conservatorship.
When all is over and when looked back all will wonder how did the Administration, Congress, Judicial system and Press allow FnF conservatorship to abuse the most basic rights of citizens.
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FannieFan said:
Thanks for the update!
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