Saturday, October 4, 2014

More Lamberth talk

This ruling took weeks to write. People knew this ruling was coming. LEAKED. but 1.90 is not bad if you were not selling anyway. The govt will pay me 20 to 60 a share because the liquidation preference is now less than the dividend. This means that if they liquidate. which they would have to do, they will have to make right the removal of the assets to produce a new FMIC or to pay dividend. This is what LAMBERTH said. At least the we can square it in liquidation part.
Point is you got a ticket to ride. your an owner in fannie mae. You cannot be wiped out without due process.
If your wiped out, you gonna invest in FMIC? who would if they can be wiped out?
read my blog: The real 2008 explanation and today’s world, You may find what your missing in this game the govt is playing.
The dems pulled the nuke option to put Watt in as FHFA regulator. why?
because if obama is out in two years , they will not transfer F&F back to a republican president.
Thats it.
$1.90 I dont care. $20 i care. $60 I care a lot.
do you believe that the govt will put 6 trillion more on the debt?
do you think the govt will wipe out investors, and then turn and say you want to invest in FMIC?
do you think the govt will be willing to charge the extra 2% finance in interest rate hikes to keep the bond market running under FMIC?
do you think the extra 2% on mortgages will produce robust housing?
do you think the 30 year loan being gone is going to stimulate growth in housing?
do you think that 5 year arms and renting is the future for america?
do you think voters would like any of the above?
do you think an investor in bonds wants a 10% haircut?
do you think an investor in the FMIC system wants to be wiped out at any moment?
do you think any of this will come true?
These are all more important than Lamberths ruling.

Court Casts a New Light on a Bailout

Court Casts a New Light on a Bailout
In spite of this punishment, A.I.G. repaid the loan in January 2011. I am not arguing that A.I.G. was an innocent in the economic debacle of 2008. But unlike its trading partners, it neither created garbage mortgage securities nor peddled them to unsuspecting investors. Its error — a whopper for sure — was not recognizing that it was the patsy at the poker table when it insured those troubled securities. Which brings us back to Judge Wheeler’s question: Why did the government do what it did in the A.I.G. deal?
An answer emerges from the material presented by Starr. Perhaps A.I.G. was treated differently because the government saw an opportunity in the insurer’s liquidity crisis: It could become an enormous taxpayer-funded piggy bank from which the government could funnel billions to a throng of teetering banks. Remember, taxpayers were growing increasingly outraged by bank rescues in fall 2008. So claiming to bail out a rogue insurer while quietly rescuing Wall Street allowed the government to channel that anger toward A.I.G. and away from the deal’s real beneficiaries.
Starr may not prevail, but it has trained the spotlight on the government’s dealings with A.I.G. in the crisis. That alone is a public service.

It is obvious that the government gave easy money to the perpetrators, with zero jail time for their enormous and systematic brazen fraud, while treating the good guys, who those perpetrators victimized, very punitively, especially Fannie and Freddie. Now, long past the confusion of the emerging crisis, it is time to set this right.

A.I.G. Bailout Priorities Are in Critics’ Cross Hairs

The top three recipients of money from the government related to the credit insurance A.I.G. had written areSociété Générale, a French bank, at $11 billion; Goldman Sachs, at $8.1 billion; and Deustche Bank, at $5.4 billion.
“I find it impossible to understand why we as taxpayers are bailing out foreign banks,” said Thomas H. Patrick, a founder of new Vernon Capital and a former top executive at Merrill Lynch. “If the shoe was on the other foot and major U.S. institutions were exposed to those banks, would the U.K. or the E.U. tax their citizens to pay off JPMorgan? There has to be some explanation of why we decided to do that.”

SEC Announces Fraud Charges Against David A. Stockman and Eight Other Former Collins & Aikman Corporation Officers and Directors

SEC Announces Fraud Charges Against David A. Stockman and Eight Other Former Collins & Aikman Corporation Officers and Directors

this is David Stockman that writes for Seeking Alpha.

The real 2008 explanation and today's world.

So its 2008, Aig and Fannie and Freddie are taken over with very similar terms to their takeovers.

80% warrants, 180 billion plus bail outs. Both insured mortgages. Both Pay banks for defaults or take the default loans off the banks books. Both DO NOT deal with the public directly.
This is key to why these three entities were placed with the most punitive of loans from the treasury.
They are as follows:
1. 80% warrants made it impossible for anyone to takeover these companies on the cheap by buying a majority of the stock in the company on the cheap and taking over the boards and possible selling off pieces of the company or going bankrupt in a restructure deal. why? If these companies went bankrupt they would not have to pay the Banks the money on these lost mortgages. THATS IT. why? If the banks did not get 100% funding from these losses they would ALL be bankrupt themselves. This would cause a run on the banks where the depositors would lose faith in the banks and withdraw all their money from their deposit account. This is how a depression occurs.
2. This was a bailout of the banks. These 3 had to be taken over to stop the banks from collapse. These 3 would be required to pay 100% out to the banks. That 100% would come from treasury money.
3. The banks also had problems of their own. Horrible loans on their own books. This needed to be fixed. How can we rid the banks of bad loans? Take over F&F and make them take the banks crap loans off the banks books. This would cause F&F to lose billions in the month of the takeover of F&F just before the 3rd quarter of 2008 were to be made public. If you look at that quarter you will find it to be the worst of all the quarters because the Banks unloaded on F&F immediately after the FHFA took over and told the banks to unload on F&F. This was all done to save THE USA. I do think it was needed. There can be no run on fannie or freddie or Aig, but chase or citibank or every bank in america there would be.

Now that those times are over and the banks have coughed up all the money they defrauded. Well 10% of the money they defrauded anyway, The FHFA decided to let them all off with a slap on the hand and 10 cents on the dollar for their crimes.

Aig is free and govt is out. Crapo and Johnson is going nowhere and will be a dead bill at the end of this year. Johnson is retired as of end of this year. A new Banking chairman will head the senate banking committee. So will FMIC be dead, or will the govt go out and hire a crew of workman and change the names of fannie mae and freddie mac on their buildings?

The truth is reforming mortgage finance is really just that. Change the names and do the same business.
FMIC is no different than Ginnie mae. Ginnie mae is no different from F&F. F&F are no different from AIG.

The point is there is no FMIC. They are all the same. There can be no change to an unchangeable system.
Sure you can tweek it, thats regulation. But a Real change is not going to happen by eliminating F&F, unless real change to you the loss of the 30 year mortgage and interest rates that are 2 to 3 points higher for the risk that is being given by everyone involved in the 10% haircut bond and bank market?

AIG insured the majority of the PLS loans. AIG insured the Banks who kept loans on their own books from default.

F&F bought the loans from the banks that the banks did not want to keep on their own books. When a bank passes the loan to F&F they are not liable for the loans as long as they were written within the guidelines of what F&F accept. If on the other hand they are full of fraud and should not have been passed to fannie the banks have to buy back the defaulted mortgage.

Ginnie Mae does same as Fannie and Freddie but they are under full backing of the US govt. FHA loans go though ginnie. The headlines read:

FHA to get $1.7 billion in its first taxpayer-funded bailout

Ginnie was only $600 billion portfolio of mortgage-backed securities, where as Fannie and Freddie are

5 Trillion. Roughly 10 times larger than Ginnie. 
Ginnie Mae never needed a bailout as it was govt run. The govt bailed out FHA instead and showed Ginnie to not need a bailout by transferring the losses of ginnie back to the FHA. 
This is familiar because it is the same thing the govt is doing with Fannie and Freddie by suing the Banks to take back their bad mortgages. The main difference is the Govt controls both FHA and Ginnie completely and can hide and change anything at anytime. The banks are private and so is F&F. So they have to do it the old fashioned way with the courts and a conservatorship.  The new Crapo-Johnson bill would set up a very large Ginnie mae that would be 100% on the govt backed by tax dollars to the tune of 6 Trillion dollars and would have the banks on the hook for a conservatorship of their own on the next go round. As you all are fully aware, according to the govt, the shareholders would all be left in the cold on every large bank in america upon the next down turn in the housing market. This occurs about every 10 to 20 years and the Housing market cannot rebound from the tight grip that our govt is putting on the mortgage market. 
According to judge Lamberth since banking is highly regulated bank stock holders would no the risk in dealing with the govt and the risk will be all their money. This is straight from a federal judge. 
If you want a comparison, ALIBABA the largest IPO ever brought in 25 billion in fresh capital for the corporation, the new FMIC the govt wants to make from Ginnie Mae would need 20 ALIBABA's to fund it and would need people that have already been washed out by our govt to participate. 
FMIC would need a Ginnie mae the size of 10 of the current one to do the same exact job Fannie and Freddie already do. It would put the Full 6 trillion on the books of the Us 16 trillion debt and make it a full 22 trillion in debt overnight.  
What is to gain? Nothing. There is no gain by doing this. There is only a loss. A loss of participation in the market by people the are too afraid to be wiped out by the regulated industry and should therefor according to Federal Judge Lamberth should have no expectations of their investment that it wont be confiscated with the stroke of a pen. 
Ask yourself if THESE stockholders are wiped out why do you think the next wont be when the next downturn in the market comes. The bond holders will never take less money for their investment so a 10% loss will never fly. I will not invest in a bond that gives me a haircut of 10% when I have plenty of other places to put my money where the govt will not in a single moment wipe me out. I will pass and most others would too. Only the foolish would believe their investment is safe when the US regulator is on the prowl. 

The Players:
American International Group, Inc. – also known as AIG – is an American multinational insurance corporation with more than 88 million customers in 130 countries. AIG companies employ over 64,000 people in 90 countries. The company operates through three core businesses: AIG Property Casualty, AIG Life and Retirement and United Guaranty Corporation(UGC). AIG Property Casualty provides insurance products for commercial, institutional and individual customers. AIG Life and Retirement provides life insurance and retirement services in the United States. and UGC focus on mortgage guaranty insurance and mortgage insurance. AIG also focuses on has global capital markets operations, direct investment and retained interests.

 Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968.[2] The corporation's purpose is to expand thesecondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS),[3]allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on locally-based savings and loan associations (aka "thrifts".In 1970, the federal government authorized Fannie Mae to purchase private mortgages, i.e. those not insured by the FHA, VA, or FmHA, and created the Federal Home Loan Mortgage Corporation (FHLMC), colloquially known as Freddie Mac, to compete with Fannie Mae and thus facilitate a more robust and efficient secondary mortgage market.[12]
In 1981, Fannie Mae issued its first mortgage passthrough and called it a mortgage-backed security. The Fannie Mae laws did not require the Banks to hand out subprime loans in any way.[13] Ginnie Mae had guaranteed the first mortgage passthrough security of an approved lender in 1968[14] and in 1971 Freddie Mac issued its first mortgage passthrough, called a participation certificate, composed primarily of private mortgages

Ginnie Mae, which remained a government organization, supports FHA-insured mortgages as well as Veterans Administration (VA) and Farmers Home Administration(FmHA) insured mortgages. As such Ginnie Mae is the only home-loan agency explicitly backed by the full faith and credit of the United States government.

Friday, October 3, 2014

Forging a Path out of Conservatorship for Fannie Mae and Freddie Mac

Forging a Path out of Conservatorship for Fannie
Mae and Freddie Mac
Dr. Clifford V. Rossi 10/2/2014

The WSJ's Improbable Defense of Judge Lamberth's Indefensible Decision in Perry Capital

The WSJ's Improbable Defense of Judge Lamberth's Indefensible Decision in Perry Capital

Throwing out the case: Perry Injunction 38% drop in price

Throwing out the case: Perry Injunction 38% drop in price

First How the conservatorship came to be:


12 U.S. Code § 4617 - Authority over critically undercapitalized regulated entities

(I) Consent
The regulated entity, by resolution of its board of directors or its shareholders or members, consents to the appointment.
The FHFA and treasury went to the boards of Fannie and Freddie and gave them freedom from prosecution and with threats demanded they comply with CONSENT. Demand of consent is DURESS. 
Legal definition of duress:
Unlawful pressure exerted upon a person to coerce that person to perform an act that he or she ordinarily would not perform.
Duress also encompasses the same harm, threats, or restraint exercised upon the affected individual's spouse, child, or parent.
Duress is distinguishable from Undue Influence, a concept employed in the law of wills, in that the latter term involves awrongdoer who is a fiduciary, one who occupies a position of trust and confidence in regard to the testator, the creator of thewill.
Duress also exists where a person is coerced by the wrongful conduct or threat of another to enter into a contract undercircumstances that deprive the individual of his or her volition.
As a defense to a civil action, the federal Rules of Civil Procedure require that duress be pleaded affirmatively.
Except with respect to Homicide, a person who is compelled to commit a crime by an unlawful threat from another person toinjure him, her, or a third person, will generally not be held responsible for its commission.

To start the entire conservatorship should be challenged on this alone.!!!!!!!

(2) Discretionary appointment
The Agency may, at the discretion of the Director, be appointed conservator or receiver for the purpose of reorganizing, rehabilitating, or winding up the affairs of a regulated entity.
May again is mandatory.  Choice conservator OR receiver. Has to pick one.
Then choose to reorganize, rehabilitate OR wind up.  OR is important to the phrasing. 
Wind up goes strictly with receiver as stated by the OR in the first choice. 
(D) Receivership terminates conservatorship
The appointment of the Agency as receiver of a regulated entity under this section shall immediately terminate any conservatorship established for the regulated entity under this chapter.
The FHFA cannot be both. It is either conservator or receiver. 
The FHFA chose conservator as we are not in receivership. As the FHFA has said.
(D) Powers as conservator
The Agency may, as conservator, take such action as may be—
(i) necessary to put the regulated entity in a sound and solvent condition; and
(ii) appropriate to carry on the business of the regulated entity and preserve and conserve the assets and property of the regulated entity.

The Term MAY 
Legal definition:
the word "may" must be read in context to determine if it means an act is optional or mandatory
May in HERA is used as a mandatory when read. The Agency May.....

(D) Limitation on judicial review
Except as otherwise provided in this subsection, no court shall have jurisdiction over—
(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets or charter of any regulated entity for which the Agency has been appointed receiver; or
(ii) any claim relating to any act or omission of such regulated entity or the Agency as receiver.
Only applies to Receivers NOT conservators.  No where in HERA is the conservator protected from judicial review.
(E) Disposition of assets
In exercising any right, power, privilege, or authority as conservator or receiver in connection with any sale or disposition of assets of a regulated entity for which the Agency has been appointed conservator or receiver, the Agency shall conduct its operations in a manner which—
(i) maximizes the net present value return from the sale or disposition of such assets;
(ii) minimizes the amount of any loss realized in the resolution of cases; and
(iii) ensures adequate competition and fair and consistent treatment of offerors.

FHFA is clearly not doing this as CASH is an asset. The Agency Shall means it HAS to do.

n. a guardian and protector appointed by a judge to protect and manage the financial affairs and/or the person's daily life. The conservator may be only of the "estate" (meaning financial affairs) The conservator is required to make regular accountings which must be approved by the court. The conservator may be removed by order of the court if no longer needed, upon the petition of the conservatee or for failure to perform his/her duties.
The conservatee is the shareholders or the corporation. 

(f) Limitation on court action
Except as provided in this section or at the request of the Director, no court may take any action to restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver.

This is a big one, NO Court MAY restrain the conservator. 

Unless he is NOT within his statutory rights as conservator. May is questionable in the above (f) limitation. May could be an option. The Legislative branch cannot Add (f) to every law and make it not open to the courts. There are 3 branches of government, All are equal and cannot be written out of existence by the legislative branch. This (f) is unconstitutional in itself. Lamberth points to this on his dismissal. He is a judge, His job is to interpret the law according to the constitution of the United States. Including the laws validness. 

Preferred senior stock agreement was enacted by FHFA and Treasury it was the FIRST agreement known as the PSPA. This is when the 80% warrants were given away along with the first 1 billion dollars in liquidation preference for each corporation. 

This entitled Treasury to dividends equivalent to 10% of Treasury’s existing liquidation preference, paid quarterly


Now to LAMBERTH and his ruling to dismiss the case against the FHFA and treasury.
One by One.

Page 10
“Federal courts are of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 
511 U.S. 375, 377 (1994). Under Rule 12(b)(1), the plaintiffs bear the burden of demonstrating 
that subject matter jurisdiction exists.

Perry must prove the case is under the jurisdiction of the District Court (fed)

rule 12(b)(1) and 12(b)(6)
a party may assert the following defenses by motion: 
(1) lack of subject-matter jurisdiction; 
(6) failure to state a claim upon which relief can be granted

A. HERA Bars the Plaintiffs’ Prayers for Declaratory, Injunctive, and Other 
Equitable Relief against FHFA and Treasury
By this Court’s calculation, twenty-four of the thirty-one substantive prayers for relief10
requested by the plaintiffs across their five complaints seek declaratory, injunctive, or other 
equitable relief against FHFA or Treasury. See also FHFA Mot. at 22 n.13. Such relief runs up 
against HERA’s anti-injunction provision, which declares that “no court may take any action to 
restrain or affect the exercise of powers or functions of [FHFA] as a conservator or a receiver.” 

12 U.S.C. § 4617(f). 

I explained all this above. We know this is not true and this is not what HERA says, This is also where the court needs to step in and say: Im the court, equal. No law can be written to eliminate the court.

While case law adjudicating HERA-related disputes is generally sparse, “[c]ourts 
interpreting the scope of [§] 4617(f) have relied on decisions addressing the nearly identical 
jurisdictional bar applicable to the Federal Deposit Insurance Corporation (‘FDIC’) 

conservatorships contained in 12 U.S.C. § 1821(j).”1

So i went and got it!

(j) Limitation on court action
Except as provided in this section, no court may take any action, except at the request of the Board of Directors by regulation or order, to restrain or affect the exercise of powers or functions of the Corporation as a conservator or a receiver.
vs HERA:
(f) Limitation on court action
Except as provided in this section or at the request of the Director, no court may take any action to restrain or affect the exercise of powers or functions of the Agency as a conservator or a receiver.
Notice the FDIC has an exception and is not nearly Identical!!!
Thus, the question for this Court is whether
the plaintiffs sufficiently plead that FHFA acted beyond the scope of its statutory “powers or 
functions . . . as a conservator” when the agency executed the Third Amendment to the PSPAs 
with Treasury.
12 U.S.C. § 4617(f) (emphasis added). Consequently, it does 
appear that § 4617(f) bars all declaratory, injunctive, or other equitable relief stemming from 
claims of arbitrary and capricious decisionmaking.
Again I state MAY is up for debate and since unlike FDIC there is no exception, Therefore Unconstitutional under 3 equal branches of government. Also unconstitutional under what would appear to be a forth branch of government with No check and balance by Judicial System. 
Thus, the two counts in each of the Perry, Fairholme, and Arrowood Complaints, and related prayers for relief,that claim APA violations for arbitrary and capricious conduct by both Treasury and FHFA are hereby dismissed pursuant to Rule 12(b)(1).
12b1 is used. for tossing out first count.  Lack of jurisdiction for the court. 
This means the court thinks it cannot continue with trial based on HERA 4617(f) No court MAY take action. again MAY has to be read in Entirety to determine if MAY is a question.  Let alone the constitutionality of (f).  What else is amazing is HERA protects the conservator from courts, But Lamberth lets Treasury off hook also, even though Treasury does not carry such protection under HERA, only the FHFA has this. Amazing.
Section 4617(f) Applies to Treasury’s Authority under HERA
However, the defendants’ 
argument that granting relief against the counterparty to a contract with FHFA would directly 
restrain FHFA’s ability as a conservator vis-à-vis that contract is based on sound reasoning. 
Additionally, when the counterparty to FHFA’s contract—Treasury—is also a 
government entity operating based on authority derived from HERA
Here he gives a Blanket of HERA to all the deal with the conservator. This is not what (f) says. especially when the party to the contract with FHFA is directing the FHFA what to do. (f) is unconstitutional as is, Let alone moving that power over to treasury also is not what (f) says. The third amendment says give me all you profit and when you need money you dont have to pay.  Well is it not convenient that the Treasury is also immune to judicial review as they are the ones getting the money. This according to Lamberth and his interpretation of (f)   
Treasury’s Execution of the Third Amendment Does Not Constitute the 
Purchase of New Securities in Contravention of HERA
Both claims are unpersuasive.
Lamberth claims the third amendment was not a new purchase. It is Illegal after 2009 for treasury to make purchases. Lamberth disagreed this was new purchace.
whereby Treasury doubled its funding cap to $200 billion for each GSE.
(at an amount that, in the end, totaled greater than $200 billion per GSE)
This net worth sweep represented a new formula of dividend compensation for a $200 billion-plus investment Treasury had already made
Lamberth is under the impression that each GSE needed $200 billion dollars. His last statement is just bizarre as we all know the total is 187 billion for both. Its like he has a bone to pick. NEW formula? yeah pay all your money. forever. 
claim of breach of fiduciary duty against FHFA. The parties dispute whether the Fairholme plaintiffs’ fiduciary duty claim is direct
Treasury may have amended the 
compensation structure of its investment in a way that plaintiffs find troubling, but doing so did 
not violate the purchase authority sunset provision.
So he dismisses this claim that the Treasury purchased a new security.
FHFA Acted within Its Statutory Authority 
The individual plaintiffs put forth a number of claims that FHFA violated HERA by 
entering into the Third Amendment.17 These arguments concern both FHFA’s conduct and the 
purported reasons for FHFA’s conduct—the what and the why, so to speak.
At bottom, the Third Amendment sweeps nearly all GSE profit dollars to Treasury. 
The result for non-Treasury shareholders is virtually no likelihood of dividend payments (given the
lack of profits along with Treasury’s discretion to pay dividends, see, e.g. Treasury AR at 58 
(Freddie Mac PSPA § 5.1)) and a decrease in the potential liquidation preference they would 
receive if the company liquidated during a period of profitability. Both parties essentially admit 
this same depiction in their briefs, biased adjectives aside. Looking past the financial 
engineering involved in the PSPAs and subsequent amendments, the question for this Court, 
simply, is whether the net worth sweep amendment represents conduct that exceeds FHFA’s
authority under HERA
Yet construing the allegations in a light most favorable to the plaintiffs, the Court finds that the 
plaintiffs fail to demonstrate by a preponderance of the evidence—if at all—that FHFA’s 
execution of the Third Amendment violated HERA
Here Lamberth says plaintiffs fail to prove by preponderance of the evidence that FHFA exceeded Hera when giving signing the third amendment and giving away all the profits to Treasury. But Lamberth does not read HERA. He cherry picks his parts he likes for this dismissal.  First what evidence? When No discovery was done or allowed to transfer from Sweenys Claim court? Lamberth did not allow this, instead chose to dismiss the case. 
(B) Operate the regulated entity
The Agency may, as conservator or receiver—
(iv) preserve and conserve the assets and property of the regulated entity
This time MAY is not an option. read in context. The Agency may....

FHFA’s Justifications for Executing the Third Amendment and, 

Consequently, the Accompanying Administrative Record, Are Irrelevant 

for § 4617(f) Analysis
Lamberth believes that (f) means no Judge shall have power of FHFA as conserator. That is not what it says, but that is what he reads. 
Similarly, the individual plaintiffs argue that FHFA violated HERA by not producing the full 
administrative record
the Court need not view the full administrative record to 
determine whether the Third Amendment, in practice, exceeds the bounds of HERA
HERA’s jurisdictional bar would 
render the anti-injunction provision hollow, disregarding Congress’ express intention to divest 
the Court of jurisdiction to restrain FHFA’s “exercise of [its] powers or functions” under 
HERA—i.e., how FHFA employs its powers or functions. See 12 U.S.C. § 4617(f). Therefore, 
the Court will only consider FHFA’s actual conduct
Notwithstanding the plaintiffs’ perspective that the Third Amendment was 
a “one-sided deal” favoring Treasury, the amendment was executed by two sophisticated parties, 
and there is nothing in the pleadings or the administrative record provided by Treasury that hints 
at coercion actionable under § 4617(a)(7)
This claim does 
not pass muster under either Rule 12(b)(1) or Rule 12(b)(6). 
And finally i get to the part I like. Lamberth says he does not need a complete Administrative record. Then in his same argument on why There is no proof of coercion he uses the lacking full record from the FHFA and the treasury which were requested by the Plaintiff just days earlier after the same parties failed to produce the blackrock papers showing the DTA had value and lots of it prior to the sweep. The lack of the full DISCOVERY in this case makes it impossible for Lamberth to determine coercion and makes it impossible to throw out under 12b1. The point Ill make is Lamberth wanted this out of his court. So he dismissed it on every count, but this particular one is a doozie. Entered just days before was the request for discovery from sweenys case. He actually did everyone a favor, by his ruling, sending this to the court of appeals, After that would be the supreme court. I do not think it would need to get past the court of appeals as there would be no need to take the FHFA to the supreme court. Anyway the appeals court comes to 3 judges now. Like a small version of supreme court. Most cases take a year to get through this court. Some faster, some slower.
This will not be missed that he cannot know if coercion existed without a complete record. Note treasury withheld the blackrock information on the first record it submitted as full.  How can that be? Lack of disclosure to the court told Lamberth the govt has no respect for his court. So he did the unexpected. He dismissed it. With this little bit in it to be sure it is overturned. Another thing I find interesting is his sighting of 2 arguments for dismissal. 12b1 lack of jurisdiction for his court, And the what I believe is his knowing (f) is unconstitutional. He sent it to the higher court to deal with. As any ruling he may have would be put through the appeals court by the govt anyway. His dismissal takes it there that much quicker. Appeals court will rule. And there rule is final, unless they kick it back to the lower court. Then we proceed forward. 

HERA Bars the Plaintiffs’ Derivative Claims against FHFA and Treasury
The class plaintiffs bring derivative claims against both FHFA and Treasury on behalf of 
Fannie Mae and Freddie Mac. 
An Exception to HERA’s Bar on Shareholder Derivative Claims Would 
Contravene the Plain Language of the Statute
No it does not, but ill explain why with this.
A shareholder brought suit for the failure of Delta and the OTC for their failure in preventing the discrimination. The court ruled:
The court concluded that “[g]iven the nature and extent of the relationship between the FDIC and the OTS, . . . the FDIC cannot be expected to objectively pursue lawsuits against the OTS, even when it is in the best interest of the failing bank to do so.” Id. Therefore, it found that the “common-sense[ ] conflict of interest exception to the commands of FIRREA” established in First Hartford applied in this case, giving the shareholder plaintiff standing to sue.
Fairholme is suing both Treasury and FHFA, they are contesting the legality of enacting the 3rd amendment as well as its terms. All three of these are absent from the case above 

It is a slippery slope for the 
Court to poke holes in, or limit, the plain language of a statute, especially when, as here, the 
plaintiffs have not asked the Court to weigh in on the statute’s constitutionality. Therefore, the 
Court finds that HERA’s plain language bars shareholder derivative suits, without exception.
(i) all rights, titles, powers, and privileges of the regulated entity, and of any stockholder, officer, or director of such regulated entity with respect to the regulated entity and the assets of the regulated entity; and
Lambereth says slippery slope to interpret a statute? He is a judge, this is what they do. They dont just read it. This is true if the conservator is fulfilling his duty lawfully.  Since The FDIC has this little line in theirs except at the request of the Board of Directors by regulation or order, They can be reviewed. 
Since the plaintiff has not asked on the statutes constitutionality the court wont. HUH. YOUR A COURT. This is another very peculiar thing Lamberth has chose to do. Courts hold all laws up to the constitution and the law Lamberth is using to defeat this case he has a problem with its constitutionality but yet still chooses to dismiss on THIS charge. 
Even If the Exception Applies, There Is No Conflict of Interest between 
FHFA and Treasury
was not just based on the presence of two government entities, but 
rather two sufficiently interrelated government agencies. 
the FDIC and the OTS were “interrelated agencies with overlapping personnel, 
structures, and responsibilities As the Delta Savings Court 

so i found this:
Second, Delta Savings Bank, too, is inapposite. In that case, the Ninth Circuit applied the conflict-of-interest exception that was articulated in First Hartford, even though the conservator of the bank was not the agency that had allegedly harmed it, as was the case in First Hartford.
The court reasoned that the circumstances of Delta Savings Bank could “not [be] distinguish[ed] from First Hartford” because the OTS and the FDIC were so intertwined. 265 F.3d at 1022. In other words, the Ninth Circuit found that the two ostensibly separate agencies were so closely related that it was as if Delta Savings Bank were being operated by a single agency, the agency that harmed it, as in First Hartford.
Lamberth does not even try on this one to quote the reason why he writes this, but he did. 
Furthermore, the Court understands that Treasury represented the only feasible entity—
public or private—capable of injecting sufficient liquidity into and serving as a backstop for the 
GSEs within the short timeframe necessary to preserve their existence in September 2008. There 
was no other investment partner at FHFA’s disposal
Courts, generally, should be wary of labeling a transaction with an investor of last resort as a 
conflict of interest.33 
Thus, the class plaintiffs’ derivative claims, on behalf of the GSEs, for breach of 
fiduciary duty by FHFA and Treasury, are dismissed pursuant to Rule 12(b)(1) for lack of 
note the 12b1 ruling again. lack of standing. Treasury was only one capable of loaning money and court should not label them, or THE TREASURY as having a conflict of interest. 4 years after the bailout? and 30 billion more back than they borrowed to the companies. pure profit. 
The Plaintiffs’ Breach of Contract and Breach of the Implied Covenant of 
Good Faith and Fair Dealing Claims for Monetary Damages Must Also Be 
The Plaintiffs’ Liquidation Preference Claims Are Not Ripe 
Given that the plaintiffs maintain no current right to a liquidation preference while the 
GSEs are in conservatorship, the plaintiffs are no worse off today than they were before the 
Third Amendment. Therefore, there is no hardship imposed on the plaintiffs by withholding 
court consideration until this contingent right matures at the moment of liquidation.
 the right to a liquidation preference can be adjudicated during the statutorily prescribed receivership 
claims process
Here Lamberth says they are not ripe, and that in receivership they can be looked at again.
No loss he says. 
FHFA’s power over the assets of 
the GSEs surely includes the power to declare discretionary dividends from the surplus assets of 
the GSEs. 
Your a judge, look at the statute. DOES the FHFA have the power to do that and break contracts with preferred shareholders? Dont make a statement, tell where that power is derived to select who gets the dividend. 
Without a contractual right to dividends, the plaintiffs cannot state a claim for breach of 
contract specifically based on their alleged dividend entitlements
The claim goes like this, We will pay a dividend to us and only us, no matte what your contracts say. Thats it. Is there a law against that? I dont know says lamberth, Im only a judge?
The Class Plaintiffs Fail to Plead That the Third Amendment Is an 
Unconstitutional Taking
Finally, the class plaintiffs claim that the Third Amendment effected an unconstitutional 
taking of their alleged dividend entitlements and liquidation rights without just compensation. 
U.S. Const. amend. V
The Jurisdictional Defect in the Class Plaintiffs’ Pleadings Is Not 
Dispositive of Their Takings Claims
As an initial matter, the defendants argue that the class plaintiffs’ takings claims belong 
in the Court of Federal Claims rather than in this Court.
the Court of Claims maintains exclusive jurisdiction over claims 
against the United States that exceed $10,000
Basically he says, Get this out of my court. This is the wrong court. This is over 10,000 and this belongs in the federal claims court. Sweenys court. Where discovery is happening. Court of claims for the FIFTH.

There you have it. Best I could do.