Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3428147 times)

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10320 on: August 05, 2018, 11:08:53 PM »
And I just found this... J. Willet was on Trump's Supreme Court list. Did not know but members here perhaps already did.
https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-supreme-court-list/

And related...
https://www.finregreform.com/single-post/2018/07/18/fifth-circuit-holds-fhfa-unconstitutionally-structured/


allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10321 on: August 06, 2018, 05:27:42 PM »
"The Collins Plaintiffs have asked the Fifth Circuit for a larger number of judges to review the three-judge panel’s decision finding that FHFA is unconstitutionally structured and upholding the Net Worth Sweep." (http://www.glenbradford.com/wp-content/uploads/2018/08/17-20364-00514582948.pdf)

The plaintiffs are asking for review on two issues:

"The first is whether Congress has empowered the Federal Housing Finance Agency, as conservator of Fannie Mae and Freddie Mac, to effectively nationalize these highly profitable private companies, thus confiscating the equity of their private shareholders. This is an important question for this Nation’s economy and the rule of law generally. And it is a question that sharply divided the panel in this case. See Op. 58 (Willett, J., dissenting); see also Perry Capital v. Mnuchin, 864 F.3d 591, 635 (D.C. Cir. 2017) (Brown, J., dissenting).

The second is whether Petitioners are entitled to any meaningful relief from an action taken by a federal agency operating contrary to the separation of powers. The panel answered no, but that answer provides insufficient protection to the separation of powers, and it is in significant tension with Supreme Court authority. See, e.g., Lucia v. SEC, 138 S. Ct. 2044, 2055 (2018)."

It will be interesting to see if the government decides to go the same route (or go straight to SCOTUS) with regards to FHFA being constitutionally structured or not.
« Last Edit: August 06, 2018, 05:29:40 PM by allnatural »

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10322 on: August 06, 2018, 06:45:21 PM »
This may not directly relate to that... But what would be the fastest and surest way to nail the former Obama administration as the  most communist, leftist and confiscatory administration to have ever governed the US?

I bet Trump would love to hit Obama as the nationalizer-in-chief. Much, much more than getting the 100 bill from the warrants.

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10323 on: August 06, 2018, 06:58:43 PM »
Post Trump/Mnuchin, the thesis shifted a bit to- Why should the Trump administration continue to protect and defend the illegal takings of the previous administration (Obama admin.)?

There was potential for a quick win with Trump "solving" the GSE situation, something that the Obama administration wasn't able to achieve (+1 for Trump, -1 for Obama as you described), getting tax payers off the hook, earning close to $400b in a deal (~$300b in div payments to date + monetizing $100b in warrants), and not paying out a penny to shareholders in a settlement. Unfortunately we are now 18 months into the administration with no solution in sight other than some promises by Mnuchin (and continuing to vigorously defend the NWS action in courts)... Is it as simple as Mnuchin waiting for post midterms or cover by one of the courts before signing off on something administratively? Not sure...

This may not directly relate to that... But what would be the fastest and surest way to nail the former Obama administration as the  most communist, leftist and confiscatory administration to have ever governed the US?

I bet Trump would love to hit Obama as the nationalizer-in-chief. Much, much more than getting the 100 bill from the warrants.
« Last Edit: August 06, 2018, 07:00:38 PM by allnatural »

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10324 on: August 06, 2018, 07:09:53 PM »
Perhaps the outcome desired by some within the Trump circle is an unforgettable lesson of something that should never had happened and make sure it never will.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10325 on: August 07, 2018, 07:24:09 AM »
This may not directly relate to that... But what would be the fastest and surest way to nail the former Obama administration as the  most communist, leftist and confiscatory administration to have ever governed the US?

I bet Trump would love to hit Obama as the nationalizer-in-chief. Much, much more than getting the 100 bill from the warrants.

This was plausible when Trump was elected, but with 18 months of inaction and only vague promises from Mnuchin that keep getting pushed back, Occam's razor would point to this theory not being true. It would ring kind of hollow at this point to use this to bash Obama this far into his term.

Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10326 on: August 07, 2018, 08:31:34 AM »
"The Collins Plaintiffs have asked the Fifth Circuit for a larger number of judges to review the three-judge panel’s decision finding that FHFA is unconstitutionally structured and upholding the Net Worth Sweep." (http://www.glenbradford.com/wp-content/uploads/2018/08/17-20364-00514582948.pdf)

That's a darn good read. One reference was to McAllister vs RTC, found at http://www.ca5.uscourts.gov/opinions/pub/98/98-50471.CV0.wpd.pdf. The top of page 18 has the money quote.

Quote
  In their reading of the relevant statute, however, appellants fail to acknowledge 12 U.S.C. §1821(d)(2)(D), which states explicitly that a conservator only has the power to take actions necessary to restore a financially troubled institution to solvency.

This was a prior 5th Circuit opinion. Isn't that binding on the court? Or did the Collins plaintiffs just bark up the wrong tree at the beginning?

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10327 on: August 07, 2018, 08:59:20 AM »
"The Collins Plaintiffs have asked the Fifth Circuit for a larger number of judges to review the three-judge panel’s decision finding that FHFA is unconstitutionally structured and upholding the Net Worth Sweep." (http://www.glenbradford.com/wp-content/uploads/2018/08/17-20364-00514582948.pdf)

That's a darn good read. One reference was to McAllister vs RTC, found at http://www.ca5.uscourts.gov/opinions/pub/98/98-50471.CV0.wpd.pdf. The top of page 18 has the money quote.

Quote
  In their reading of the relevant statute, however, appellants fail to acknowledge 12 U.S.C. §1821(d)(2)(D), which states explicitly that a conservator only has the power to take actions necessary to restore a financially troubled institution to solvency.

This was a prior 5th Circuit opinion. Isn't that binding on the court? Or did the Collins plaintiffs just bark up the wrong tree at the beginning?

saw that Midas.

this is the predecessor statute on which HERA was based, and it says: 

(D) Powers as conservator
The Corporation may, as conservator, take such action as may be—
(i) necessary to put the insured depository institution in a sound and solvent condition; and
(ii) appropriate to carry on the business of the institution and preserve and conserve the assets and property of the institution.

you will notice that the word "only" is not in the statute, although a fair reading of the statute would assume so.  McAllister court inserts the word only into its opinion, per your page 18 quote.

wonder why this case was central to Ps argument?   



Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10328 on: August 07, 2018, 09:18:00 AM »
"The Collins Plaintiffs have asked the Fifth Circuit for a larger number of judges to review the three-judge panel’s decision finding that FHFA is unconstitutionally structured and upholding the Net Worth Sweep." (http://www.glenbradford.com/wp-content/uploads/2018/08/17-20364-00514582948.pdf)

That's a darn good read. One reference was to McAllister vs RTC, found at http://www.ca5.uscourts.gov/opinions/pub/98/98-50471.CV0.wpd.pdf. The top of page 18 has the money quote.

Quote
  In their reading of the relevant statute, however, appellants fail to acknowledge 12 U.S.C. §1821(d)(2)(D), which states explicitly that a conservator only has the power to take actions necessary to restore a financially troubled institution to solvency.

This was a prior 5th Circuit opinion. Isn't that binding on the court? Or did the Collins plaintiffs just bark up the wrong tree at the beginning?

saw that Midas.

this is the predecessor statute on which HERA was based, and it says: 

(D) Powers as conservator
The Corporation may, as conservator, take such action as may be—
(i) necessary to put the insured depository institution in a sound and solvent condition; and
(ii) appropriate to carry on the business of the institution and preserve and conserve the assets and property of the institution.

you will notice that the word "only" is not in the statute, although a fair reading of the statute would assume so.  McAllister court inserts the word only into its opinion, per your page 18 quote.

wonder why this case was central to Ps argument?

Good catch, I hadn't noticed the court adding "only" in its interpretation. I just saw that the FIRREA and HERA wordings were essentially identical (only changing "corporation" to "agency" and "insured depository institution" to "regulated entity").

If the 5th Circuit interpreted the "may" as exclusionary in the past, i.e. that FHFA as conservator can't do anything other than those two things, why would they not be bound to continue doing so? Under that interpretation the NWS is clearly ultra vires since it does the opposite of both (i) and (ii).

I'm just afraid that I have my wires crossed: the different cases and the arguments in them are mixing together in my mind, so I don't remember if the Collins plaintiffs tried to challenge the NWS on these grounds at all.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #10329 on: August 07, 2018, 10:00:25 AM »
"The Collins Plaintiffs have asked the Fifth Circuit for a larger number of judges to review the three-judge panel’s decision finding that FHFA is unconstitutionally structured and upholding the Net Worth Sweep." (http://www.glenbradford.com/wp-content/uploads/2018/08/17-20364-00514582948.pdf)

That's a darn good read. One reference was to McAllister vs RTC, found at http://www.ca5.uscourts.gov/opinions/pub/98/98-50471.CV0.wpd.pdf. The top of page 18 has the money quote.

Quote
  In their reading of the relevant statute, however, appellants fail to acknowledge 12 U.S.C. §1821(d)(2)(D), which states explicitly that a conservator only has the power to take actions necessary to restore a financially troubled institution to solvency.

This was a prior 5th Circuit opinion. Isn't that binding on the court? Or did the Collins plaintiffs just bark up the wrong tree at the beginning?

saw that Midas.

this is the predecessor statute on which HERA was based, and it says: 

(D) Powers as conservator
The Corporation may, as conservator, take such action as may be—
(i) necessary to put the insured depository institution in a sound and solvent condition; and
(ii) appropriate to carry on the business of the institution and preserve and conserve the assets and property of the institution.

you will notice that the word "only" is not in the statute, although a fair reading of the statute would assume so.  McAllister court inserts the word only into its opinion, per your page 18 quote.

wonder why this case was central to Ps argument?

Good catch, I hadn't noticed the court adding "only" in its interpretation. I just saw that the FIRREA and HERA wordings were essentially identical (only changing "corporation" to "agency" and "insured depository institution" to "regulated entity").

If the 5th Circuit interpreted the "may" as exclusionary in the past, i.e. that FHFA as conservator can't do anything other than those two things, why would they not be bound to continue doing so? Under that interpretation the NWS is clearly ultra vires since it does the opposite of both (i) and (ii).

I'm just afraid that I have my wires crossed: the different cases and the arguments in them are mixing together in my mind, so I don't remember if the Collins plaintiffs tried to challenge the NWS on these grounds at all.

midas, you are onto the core issue in collins, which is that in the 5th circuit, the Mcallister case interpreted "may" as "only may".  McAllister for the 5th circuit is even stronger than CedarMinn for the 8th circuit.

I don't know why Cooper & Kirk aren't making a big stink about this in their motion for rehearing.  they mention Mcallister, but only in passing.