In the latest Goldstein Memo to find the way to light, we receive another blockbuster revelation.Under “Option One: Privatization of GSEs” we find : “accelerating losses before 2012 would also help strengthen the GSEs balance sheets”.This is the smoking gun we have long sought. Though we had substantial circumstantial evidence proving that the Treasury lied about their true motives for the 2012 sweep we now have proof that they were well aware of the windfalls coming to Fannie and Freddie.They not only were aware of them but actually had them earmarked for a proposed recap release plan.Earlier in the memo they referred to this even more explicitly:
“Potentially accelerate recognition of losses prior to 2012 (there is currently a $180 billion difference between the GAAP and Fair Value balance sheets of the GSEs) Here they not openly recognized the billions of dollars of profit sitting on Fannie and Freddies books but they acknowledge that they maintained some control as to when they would be recognized. Which as we now know they waited till after the 3rd amendment sweep was signed ensuring that all of these profits would go directly to the U.S. Treasury.You will remember back in September the Blackstone presentation came to light in which Blackstone advised Treasury that they could use the soon to be had windfalls to recap the GSEs. At that time, Treasury tried to downplay this by claiming that the presentation had come unsolicited, implying that they may not have even read it.The latest revelations prove beyond a doubt that they knew exactly what they were doing.
The latest Goldstein memo is filled with all kinds of goodies many of which have been pointed out by Tim Pagliara and others.One that caught my eye was where they acknowledge “This would not require legislation” when discussing the privatization of Fannie and Freddie.I have made it clear from the beginning that the FHFA and Treasury could easily wrap things up without any involvement from Congress.I hope this puts the lie that Congress must act to rest.
Another area I found interesting were the instances where the memo claimed that certain ideas were: “Under Legal review”.Considering it is growing clearer just how lawless their actions were it will be amusing to see the results of the “legal reviews”. Will the results of these reviews be shared in discovery in the “Fairholme lawsuit”?
They also acknowledge that the privatization of the GSEs was “essentially the path laid out in HERA”. Did they happen to get any legal advice or “reviews” when they decided to trample the rule of law?
Joe Light Posted a tweet tonight sharing the DOjs quick response in explaining why this memo was not given to Judge Lamberth for consideration in the Perry Injunction.
DOJ said: :”Internal pre-decisional and deliberative documents are not part of the court’s record in a case challenging administrative action”
I responded by observing “@joelight I am sure @ChuckGrassley is thrilled that DOJ answers investigative websites so promptly.”. Isn’t it ironic that the DOJ so quickly clarified this though weeks have gone by and still no answers to the chairman of the Senate Judicial committees questions concerning the GSE cases.I will be following up with Senator Grassley’s office tomorrow to see how they feel about this blatant disrespect.
Another of my favorite recent Tweets was:
“The circular process of @USTreasury lying and us correcting with the truth must end. America deserves better.”
You will note that I have not even acknowledged Treasuries response to the leaked memo, it is not worth the dignity my response would grant it.
Addressing the new stress tests I tweeted:
“Breaking news!! Govt. seizes all income/cap reserves of @FannieMae and they may need a loan someday! Masters of the obvious?”
For those of you on Twitter, we can be found at @timhoward717 Please join us there, it is a lot of fun and affords us the opportunity to call attention to our cause, #fanniegate has proved vital in this respect.
Bill Maloni suggested I share a few Tweets here tonight, and I remind our readers not to miss out on his GSE blog found here: http://malonigse.blogspot.com Bill is one of our greatest allies and has much knowledge to aid our cause, not to mention a great sense of humor.
In closing, I just want to remind everyone that we must hold fast to the truth. We simply cannot allow our opponents to control or steer this debate with their seemingly endless river of lies.Though it is important to correct their lies, we should not allow their lies to dominate the discussion, to do so, and we are falling into their trap. Their strategy is to distract from the truth and constantly shift the focus from the crimes they continue to commit; we must not allow them to succeed. We have made great strides over the last few months, and the truth stands poised to emerge once again victoriously. It is up to us to not give in to the voices of doubt that tell us our government is too corrupt or too powerful to be successfully challenged. The greatness of our nation rests upon the fact that not only can we challenge them but that we must. Keep the Faith!