In yet another example of the never ending lies about Fannie and Freddie we now have a cleverly disguised “research paper” entitled AFTER THE DEAL: FANNIE, FREDDIE AND THE FINANCIAL
CRISIS AFTERMATH by Steven Davidoff Solomon & David Zaring. It was obvious to me after I first read it that their minds were made up before they even began. They obviously feel that the investors in Fannie and Freddie deserve little of the profits, and they chose to ignore all reason in their conclusion.As a matter if fact their conclusion contradicts many of the objective points they draw. Now if this was an op-ed that would be fine but by presenting this as a research paper they have done little more than embarrass themselves.They committed the cardinal empirical sin, contempt prior to investigation. I must caution that it was painful to read, trying to follow their legal acrobats as they try in vain to rationalize the governments blatant theft is dizzying. Again and again they are presented with the stark reality of our governments multiple crimes but rather than simply call it for what it is they let their personal opinions steer their “research.”After pointing out numerous instances where the government has trampled the rule of law we are left with their bizarre conclusion in which they propose the government, once again, trample the rule of law.
I must add that in an attempt to lend even more credibility to their paper they have billed it as “Boston University Law Review, Forthcoming. It has been forthcoming for quite some time yet when I checked their website it has not nor is it indicated that they had any intentions of publishing this fraud. It’s no surprise that no legal journal has agreed to publish their piece; it is clearly a grossly biased opinion piece masquerading as a “research paper”.
Our allegations of their contempt prior to investigation were confirmed when we came across this piece written by Steven in April 2013 entitled “In the Markets, at Least, Fannie and Freddie Still Astound”. This was an opinion piece Steven wrote for his “Deal book” blog in the New York Times. In it he makes clear his disdain for shareholders of Fannie and Freddie with comments like “So here we have a situation where an investor buys something of no value in the hope of selling it for a greater amount to someone who believes the same. Isn’t that usually called looking for the greater fool?” and “It’s mostly day traders and small investors who are buying the Fannie and Freddie shares. Institutions hold only 0.26 percent of the two companies’ shares, according to Capital IQ. He also offered this his advice in 2013 “In any event; individual holders of these stocks are most likely trading to speculate. It’s been quite profitable so far, but as we have seen again and again, trading based on froth and not on value almost always ends badly.” I want to remind everyone that anyone who followed Stevens advice in 2013, and sold their Fannie and Freddie stock would have missed out on the over 400 percent gains we have seen since then. Honestly it’s quite shocking that after delivering such failed advice in 2013 he would even dream of revisiting the subject of Fannie and Freddie. It also safe to say that Bill Ackman, Bruce Berkowitz and Carl Icann have serious differences of opinion with both Steve and David.
In closing I want to note that John Carney from the WSJ had this to say about Steve and Daves piece on Twitter, “John Carney ‏@carney Aug 18
Very good and thoughtful paper on $FNMA and $FMCC lawsuits from @StevenDavidoff and David Zaring.”. Carney never misses a chance to further cement his role as “Propaganda Minister” in the U.S. governments quest to pull off this brazen Soviet- Style profit grab. Earlier today on Twitter I challenged Mr. Carney to debate the truth about Fannie and Freddie. Needless to say, thus far, he has chosen not to defend his many lies. We will keep you updated. Keep that Faith! , cite lines