Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2264218 times)

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9720 on: April 15, 2018, 12:48:37 PM »
after reading the first 2/3 of the Bhatti oral arguments, it feels like the judge is sympathetic to our view but doesn't seem to have a mechanism to fix it.

judge is worried about giving broad remedies.  the separation of powers argument would entail nullifying all fhfa action.  as judge put it to P counsel, you want me to invalidate NWS, and go back to the second amendment which also would be nullified, except you are not asking for that relief.

judge seemed much more comfortable with appointments clause claim, where if judge uses Ps bright line 2 year cutoff for acting directors (borrowed from the 2 years allowed for recess appointments), then only NWS would be invalidated. 

judge also seemed to countenance the nondelegation claim which as he mentions hasnt seen much judicial support for about 100 years.

on the negative, judge seemed to countenance defendants claim that res judicata bars this suit since this could have been brought in perry.  i strongly disagree with this, apparently as does judge's law clerk.

judge is smart and engaged.  if he works as hard on this as i expect he will, Ps have a puncher's chance.

thanks.  it sounded like he thought the perry decision was improper but then said you have given me little to work with in this constitutional area to help you (plaintiffs) out.   the 2-year appointments area was perhaps the best area for success, but still there in terms of remedy, he said it would be quite a lot for a judge on his level to set this precedent.   I doubt we win even though he was kind of searching for a way to help us.

Is the Collins appeal the exact same kind of case or does it have other areas?  although I am mistaken, I was hoping the Bhatti case had BOTH the constitutional side and the same arguments as perry.  this would theoretically allow the judge to believe in our cause, decide the constitutional side remedy was a bridge too far, but then just side with the brown view and overturn the NWS in that component of the suit.

collins had "perry" arguments and PHH separation of powers.  bhatti had PHH and appointments clause.  schlitz started into perry because bhatti also raised nondelegation argument, which is obscure but basically says congress cant tell an agency to do what it wants...which is what perry seemed to say

thanks, I wonder why Bhatti and rop didn't throw in both the constitutional arguments and perry arguments. 


investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9721 on: April 15, 2018, 12:50:32 PM »
How can FHFA director, the person in the drivers seat, sleep in night knowing he is pushing each and every penny of the very companies HE is supposed to conserve assets of and knowing that companies have paid all of the principal and 10% dividend and more? He works for Treasury or the companies?

it doesn't appear that watt is the center of our issues.  he wrote a shareholder owned utility proposal after all, which might been what stopped the corker bill.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9722 on: April 15, 2018, 05:44:18 PM »
after reading the first 2/3 of the Bhatti oral arguments, it feels like the judge is sympathetic to our view but doesn't seem to have a mechanism to fix it.

judge is worried about giving broad remedies.  the separation of powers argument would entail nullifying all fhfa action.  as judge put it to P counsel, you want me to invalidate NWS, and go back to the second amendment which also would be nullified, except you are not asking for that relief.

judge seemed much more comfortable with appointments clause claim, where if judge uses Ps bright line 2 year cutoff for acting directors (borrowed from the 2 years allowed for recess appointments), then only NWS would be invalidated. 

judge also seemed to countenance the nondelegation claim which as he mentions hasnt seen much judicial support for about 100 years.

on the negative, judge seemed to countenance defendants claim that res judicata bars this suit since this could have been brought in perry.  i strongly disagree with this, apparently as does judge's law clerk.

judge is smart and engaged.  if he works as hard on this as i expect he will, Ps have a puncher's chance.

thanks.  it sounded like he thought the perry decision was improper but then said you have given me little to work with in this constitutional area to help you (plaintiffs) out.   the 2-year appointments area was perhaps the best area for success, but still there in terms of remedy, he said it would be quite a lot for a judge on his level to set this precedent.   I doubt we win even though he was kind of searching for a way to help us.

Is the Collins appeal the exact same kind of case or does it have other areas?  although I am mistaken, I was hoping the Bhatti case had BOTH the constitutional side and the same arguments as perry.  this would theoretically allow the judge to believe in our cause, decide the constitutional side remedy was a bridge too far, but then just side with the brown view and overturn the NWS in that component of the suit.

collins had "perry" arguments and PHH separation of powers.  bhatti had PHH and appointments clause.  schlitz started into perry because bhatti also raised nondelegation argument, which is obscure but basically says congress cant tell an agency to do what it wants...which is what perry seemed to say

thanks, I wonder why Bhatti and rop didn't throw in both the constitutional arguments and perry arguments.

this is a good question.  just because perry in dc circuit decided adverse on APA claims shouldnt preclude Ps from raising claim in another circuit.  yet if you look at the the APA claim landscape, you have 5th circuit (collins) and 8th circuit (saxton) hearing appeals, and the 8th circuit is the circuit for bhatti (but not rop).  looks to me like the rop judge is taking a powder, waiting on schlitz.

i think in bhatti the constitutional claims were well argued by Ps.  the separation of powers claim will lose in front of schlitz, but that claim will be decided in scotus anyhow (perhaps PHH will ask for cert, need to by end of month).  question is whether schlitz will be bold on the appointments clause claim. 

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9723 on: April 17, 2018, 04:34:10 AM »
I re-read the appointments section, hoping to become more optimistic.  fortunately, we found a thoughtful and apparently sympathetic judge.  the constitutional angle, though, is a huge reach, it seems the very definition of 'legislating from the bench'.  I think the most likely outcome is a loss but with some language in there that encourages appeals to a higher level court that has more authority to possibly side with us.   and even in the small chance that we won in this judge's court, i'd guess an appeal is almost certain; whereas if we won in some other cases, maybe more of a settlement.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9724 on: April 17, 2018, 07:45:21 AM »
I re-read the appointments section, hoping to become more optimistic.  fortunately, we found a thoughtful and apparently sympathetic judge.  the constitutional angle, though, is a huge reach, it seems the very definition of 'legislating from the bench'.  I think the most likely outcome is a loss but with some language in there that encourages appeals to a higher level court that has more authority to possibly side with us.   and even in the small chance that we won in this judge's court, i'd guess an appeal is almost certain; whereas if we won in some other cases, maybe more of a settlement.

an appeal is certain.

i wouldnt call it legislating from the bench exactly, as the judge is being asked to define what period is "reasonable under the circumstances" for confirmation of a director to replace an acting director (the office of legislative counsel opinion, which both sides agree is relevant). 

the use of a bright line 2 years has many advantages, not the least that it is the maximum period for a recess appointment (which is actually specifically permitted by constitution...constitution is silent on acting directors).  indeed, judge schlitz called the two year bright line a good analogy. 

the best i saw defendants come up with is the apparent authority argument, which judge intimated was inappropriate for constitutional violations, and leave it up to congress to fix...except congress could have subjected HERA to the Vacancies Act, but elected to not do so...so one could conclude that congress already did act in HERA.
« Last Edit: April 18, 2018, 11:13:21 AM by cherzeca »

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9725 on: April 19, 2018, 06:01:26 PM »
139 Million shares bought last quarter? Is this for real? Bond funds acquiring common shares?

http://www.morningstar.com/stocks/pinx/fmcc/quote.html

emily

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #9726 on: April 19, 2018, 06:43:22 PM »
Is this why the price is kept down?

“Government-sponsored enterprise (GSE) preferred stock is measured at market value.”

https://www.whitehouse.gov/wp-content/uploads/2018/02/spec-fy2019.pdf