Big Win for GSE Plaintiffs

Big Win for GSE Plaintiffs

Big Win for GSE Plaintiffs

The FHFA and Treasury had tried to consolidate all the various GSE lawsuits into one. It was yet another stall tactic to delay the various suits progress in their respective courts. To some degree it worked, cases by in large were stalled pending the outcome of this panel.

The government lost. The cases will immediately resume and we can get on with discovery and litigation.  The WSJ will tell us of course this ruling in meaningless. I guess the question to ask them would be “if it meant nothing, why was the government trying to consolidate?” …. You can ask it but you won’t get an answer.

Klarman: Baupost’s Core Principles Have Helped The Fund Outperform

Seth KlarmanWhen Baupost, the $30 billion Boston-based hedge fund now managed by Seth Klarman, was founded in 1982, it was launched with a core set of aims. Q4 2021 hedge fund letters, conferences and more Established by Harvard professor William Poorvu and a group of four other founding families, including Klarman, the group aimed to compound Read More

It is so sad to see how the WSJ has become ruled by a naked political bias. It opinion pages are wholly useless now for those seeking any type of impartiality. On its opinion pages you will find not a single piece that supports plaintiffs in the GSE litigation. I’ll ask the question I asked before and have not gotten an answer from them….”how is that possible?”. I only see two options: either those in charge will simply not allow it (pure editorial bias) or the entire group is plagued by a dangerous “group think”. While they have become the perfect counter to Krugman and the  NYT’s opinion pages, that still really sucks. They should want to be better ….and this is coming from a Reagan Republican….

From the order:

On the basis of the papers filed and hearing session held, we conclude that centralization is not necessary for the convenience of the parties and witnesses or to further the just and efficient conduct of the litigation. These actions arise from the agreement in August 2012 between FHFA and the Treasury Department to enter into the third amendment of their preferred stock purchase agreement. Specifically, most plaintiffs allege that the third amendment constituted a de facto nationalization of Fannie Mae and Freddie Mac that extinguished the private shareholders’ economic interests in the companies by replacing a fixed quarterly dividend with a variable dividend equal to Fannie Mae’s and Freddie Mac’s quarterly earnings, if any, less a small and decreasing capital reserve.

Plaintiffs opposing centralization argue that there are not sufficient common disputed facts to warrant centralization, and that discovery will be minimal. Defendants have not persuasively refuted these arguments.

GSE Plaintiffs

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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.
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