I want to offer a little analysis on the government reply in the Fairholme lawsuit today. One statement jumped off the page, I actually thought I had mistakenly opened a Fairholme document,
“The Enterprises are in conservatorship, not receivership. Section 4617(b)(2)(A) of the
Housing and Economic Recovery Act of 2008 (HERA) transferred to the conservator for the
duration of the conservatorships “all rights, titles, powers, and privileges of the regulated entity,
and of any stockholder.” Conservatorships are extraordinary and Congress expressed clearly its intent regarding the administration of the conservatorships. Accordingly, judicial rulings, such
as those upon which plaintiffs rely, allowing shareholders of seized, closed banks to bring suit in receivership provides no support for plaintiffs.”
Here I find it fascinatingly insane that the government would clarify for the court that Fannie and Freddie are in conservatorship as opposed to receivership. This is a critical point for the plaintiffs. Its another example of the government wanting the benefits and none of the liabilities. This is getting surrealistic to watch.
One item I found more than amusing was the government reference to the failed Cuban Bay of Pigs invasion on the same day that Castro was appearing in the senate.
The bizarre lengths the government is going to fight the discovery has now gone beyond implying guilt to being interpreted as an outright guilty plea. There is only one reason they would go this far, they know that to comply with even half of the requests will spell their demise.
So here we go, the oral arguments will be held Thursday at 11 am. Stay tuned and Keep the faith!