Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 2533114 times)

rros

  • Hero Member
  • *****
  • Posts: 616
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10250 on: July 20, 2018, 11:05:18 AM »
After hearing Saxton for a second time I am less enthusiastic. Still optimistic but I now think Judge Kelly had a hard time accepting any notion of ultra vires and it is hard to assess whether Cooper's antithetical argument made any impact. Although she seems to think the conservatorship did not attain its mission.

It was not brought up in court but DeMarco actually went against Geithner when DeMarco raised the guarantee fees. This weakens any notion of direction. Nationalization seems indisputable from any angle. And I do not know enough about the legal implications of the Cedarminn ruling. Not sure where this leaves us but at least two judges appeared sympathetic.   


emily

  • Sr. Member
  • ****
  • Posts: 348
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10251 on: July 20, 2018, 11:09:32 AM »
Should we even rely on legal rulings? Paulson (John) does not think so.

allnatural

  • Newbie
  • *
  • Posts: 46
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10252 on: July 20, 2018, 11:35:44 AM »
The implications of the Cedarminn ruling is pretty straight forward. As highlighted by Judge Willet in his dissent, he cited the Cedarminn ruling as precedent when drawing his conclusion that FHFA violated its statutory obligations as conservator. The 8th circuit in Cedarminn already ruled that there are clear distinctions between a receivers and conservators duties in which you cannot blur the line, and its a conservators MANDATE to conserve and preserve. None of this "may" non-sense.

Let's see if that's enough to convince 2 of the 3 judges in the 8th circuit. If they rule to dismiss, it will be interesting to see what rationale they come up with to justify going AGAINST their own circuits previous judgement on the matter. I think its our best shot in the case but time will tell. Wouldn't be surprised if we lose 0-3 at this point ::)

Midas79

  • Sr. Member
  • ****
  • Posts: 272
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10253 on: July 20, 2018, 12:02:08 PM »
The implications of the Cedarminn ruling is pretty straight forward. As highlighted by Judge Willet in his dissent, he cited the Cedarminn ruling as precedent when drawing his conclusion that FHFA violated its statutory obligations as conservator. The 8th circuit in Cedarminn already ruled that there are clear distinctions between a receivers and conservators duties in which you cannot blur the line, and its a conservators MANDATE to conserve and preserve. None of this "may" non-sense.

Let's see if that's enough to convince 2 of the 3 judges in the 8th circuit. If they rule to dismiss, it will be interesting to see what rationale they come up with to justify going AGAINST their own circuits previous judgement on the matter. I think its our best shot in the case but time will tell. Wouldn't be surprised if we lose 0-3 at this point ::)

The logic goes like this:

a) CedarMinn holds that conservators MUST preserve and conserve assets
b) The NWS does exactly the opposite
c) Thus the NWS is not the act of a conservator
d) Therefore the 4617(f) bar does not apply

Disagreeing with the first line is how Lamberth and others circumvented this line of reasoning (because they are not bound by the 8th Circuit's previous decisions), and the CedarMinn precedent in this court doesn't allow that dodge.

The Saxton lower court opinion actually disagreed with the third line, along with other courts, saying that conservators can do whatever they damn well please. But I don't see how that holds up if the first line is taken to be true.

Still, you're right that almost nothing has made sense so far. Lamberth, Ginsburg, and Sleet would get a round of appluase from Rold Gold the way they have contorted law and logic to arrive at their conclusions. Why should another round of it surprise us at this point?


Perhaps we are misunderstanding exactly what the CedarMinn precedent is? The Saxton lower court opinion (http://gselinks.com/Court_Filings/Saxton/17-1727-0018.pdf) only refers to CedarMinn as mandating that a conservator maintain the company's status as a going concern, while not mentioning having to preserve and conserve assets. I am having a devil of a time finding the actual CedarMinn 8th Circuit opinion from 1992, perhaps because I don't have access to PACER. The 8th Circuit's website only goes back to 1995. FindLaw (https://caselaw.findlaw.com/court/us-8th-circuit) doesn't go back that far either; it shows no results for calendar 1992.


Edit: a footnote from Willett's dissent in the Collins appeal has the quote

Quote
CedarMinn, 956 F.2d at 1453 (noting that a conservator’s “mission[]” is “to take action necessary to restore the failed [financial institution] to a solvent position and  to  carry  on  the  business  of  the institution  and  preserve  and  conserve  the  assets  and  property of the institution” (quoting 12 U.S.C. § 1821(d)(2)(D))

The "and" between "institution" and "preserve" seems to leave no wiggle room.
« Last Edit: July 20, 2018, 12:09:19 PM by Midas79 »

allnatural

  • Newbie
  • *
  • Posts: 46
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10254 on: July 20, 2018, 12:27:32 PM »

cherzeca

  • Hero Member
  • *****
  • Posts: 1347
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10255 on: July 20, 2018, 12:34:46 PM »
All American filed its brief in 5th circuit re cfpb.  same principle different agency.  I am thinking collins my ask for rehearing en banc to not only fix the remedy granted, but also pave the way for All American.

https://www.dropbox.com/s/nf9y1i6c0cuhc72/all%20american%20th%20cir%20P%20brief.pdf?dl=0

Midas79

  • Sr. Member
  • ****
  • Posts: 272
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10256 on: July 20, 2018, 12:40:37 PM »
TY for the clarity.

I found the case here https://casetext.com/case/resolution-trust-v-cedarminn-bldg-ltd

Thanks. That what I get for just using Google!

Midas79

  • Sr. Member
  • ****
  • Posts: 272
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10257 on: July 20, 2018, 01:33:57 PM »
All American filed its brief in 5th circuit re cfpb.  same principle different agency.  I am thinking collins my ask for rehearing en banc to not only fix the remedy granted, but also pave the way for All American.

https://www.dropbox.com/s/nf9y1i6c0cuhc72/all%20american%20th%20cir%20P%20brief.pdf?dl=0

I am not seeing the similarities here. The Collins Ps just want the NWS struck down, but All American wants the entirety of CFPA gone. The Ps can't, at this point, up the ante and ask for all of HERA (relating to the creation and function of FHFA) to be struck down too, can they? Or perhaps a new case would be filed against FHFA if the All American Ps actually get what they want?


rros

  • Hero Member
  • *****
  • Posts: 616
Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10259 on: July 20, 2018, 04:04:17 PM »
It is not in our best interest for any lawsuit to try to have HERA struck down. Cayne mentioned the mandate of 'protecting taxpayers' from the law itself. But down that same list at the bottom of that section of the law there's the 'companies must remain shareholders owned'. HERA protects us.

The way courts are getting around your #1  is by Cayne convincing judges the companies are operational, therefore going concern. So the conservator *must be conserving*. And since markets are functioning fine this reinforces the notion of conserving. The conclusion of 'nothing to see here' helps courts get to the promised land: "Conservator authority has not been exceeded so we are barred from review" .

The going concern issue can fool the untrained eye.

What courts don't see is that the trick used to keep the companies as going concern has been nationalization. Just when both were about to achieve that same status on their own. Replacing own capital for government capital is key to understanding where the confusion lies.

Nowhere the word nationalization shows up because HERA mandates the GSEs to remain private and because nowhere any law says a conservator is allowed to nationalize a company. The government is getting away with this because it has left the shares intact and can always go back to the reasoning the Treasury lady offered: that the shares continue to trade and may have residual value, thus no nationalization. Or, more correctly, no expropriation.

Growing up in a country where everything has been nationalized by Peron I am more than familiar with how this works.

Unfortunately, living in America, citizens cannot recognize what they have never seen before and remain confused. Ted Olson got it right when he told the judges on Perry's appeal: the government is running an empty shell. That's what we have. Treasury knows it and is doing an outstanding job in fooling the judges.

Nationalization in our saga is the most important invisible actor. Nobody can see it. It is a threat to nobody. Except to us who have suffered its devastating consequences. It seems to me all 3 judges of the Saxton appeal panel are sensing that something is not right.