Brief Update:
Drum Beats Start Anew
As we grow closer to Judge Sweeny’s decision on the motion to compel and, more importantly, the Perry appeal verdict there are clear signals that the government is mapping out a strategy to wrap things up if they suffer legal defeats.We are witnessing very similar events that we saw in the lead up to the original Judge Lamberth ruling in the Perry Injunction. This revelation should not come as an enormous surprise as we witnessed this same turn of events in the summer of 2014.
We continue to benefit from the support of both Director Watt and other high-level figures withing the GSEs.
This is also why we have seen Demarco and company become more emboldened lately as they realize it is once again crunch time.
Near term; It is accepted that if Judge Sweeney decides heavily against the government on the motion to compel this will push them further down this path.

Sperling Sinks Fangs In Hillary
Progress was being made with the Hillary campaign, but that ended when she brought on Gene Sperling as her “housing adviser”. I hope to get a more detailed political update up in the near future.

All Points Bulletin
It is critical that anyone who received a response from Senator Bernie Sanders, please reach out to Trevor at
Particularly whoever received the response where he spoke favorably of the shareholders, this has circulated in the comments section.

Bethany Nails It
Bethany McLean knocked it out of the park with her latest article in Washinton Monthly Magazine.

I know I have previously expressed some disappointment in her book “Shaky Ground” but this in-depth article is quite possibly the best summary of the GSE debate to date. Honestly, after having spoken with Bethany in great detail about the GSE issues before the publishing of her book, I was hopeful that the narrative and facts in this article was what was going to be in the book.
Either way, I must say that judging by this article Bethany now truly has a firm grasp of the truth and the more circulation her article gets, the better.

Trevor has selected some great excerpts from the article here:

“This broad silence reflects the genuinely thorny nature of the problem, but also the fact that virtually everyone in Washington supports “solutions” that are ideologically or politically convenient but don’t make sense as policy.
“The appeal of blaming the GSEs was, and is, obvious—it’s a way to blame Democrats for the crisis, because, thanks to Johnson, Raines, and others, Fannie was regarded as a Democratic company. And, of course, if the GSEs caused the crisis, and Wall Street is blameless, then no new regulation is needed, and we can repeal the Dodd-Frank financial reform bill.But that narrative isn’t supported by the GSEs’ loss of market share as subprime lending took off, or by the loss figures. According to an analysis by the Financial Crisis Inquiry Commission, mortgages turned into securities by Wall Street defaulted at a rate that was almost four times higher than comparable mortgages guaranteed by the GSEs, making it awfully hard to argue that the GSEs led a race to the bottom. Nor is it true that loans made to lower-income borrowers caused the crisis. A study published by the National Bureau of Economic Research in early 2015 found that the wealthiest 40Â percent of borrowers obtained 55Â percent of the new loans in 2006—the peak year of the bubble—and that over the next three years, they were responsible for nearly 60Â percent of delinquencies.”

“One of the narratives, which is appealing to those on the right, is that we can get the government out of the housing market with the flip of a switch. In 2013, Jeb Hensarling, the Tea Party Republican representative from Texas, authored a bill that would kill the GSEs and, with the exception of some support for very low-income housing, not replace them with anything. While no one knows for sure what would happen—Fannie Mae has been around since the 1930s, after all—most analysts and market participants agree that the downside is that a great swath of the middle and lower classes probably would get five- to fifteen-year mortgages with floating rates, rates that would vary significantly depending on income and geography. Homes would be less affordable, so housing prices would likely fall. Consider that with interest rates at 3.75 percent, a $200,000 home with a 20 percent down payment and a ten-year fixed-rate mortgage on the remaining $160,000 would have a monthly payment of $1,521. With a thirty-year fixed-rate mortgage, the monthly payment is $752. Mortgage capital might be hard to come by in times of stress. Under the new system, not much would change for wealthy borrowers, but the effect on lower- and middle-income Americans could be significant.”

“It would be nice if we could achieve nirvana in housing finance. But if it is possible, no one has shown precisely how it would work. With the housing finance system, the devil is often in the missing details”

“The real issue isn’t whether investors get paid. It’s whether we have a housing finance system that makes sense. The investors aren’t the only ones who would like to see Fannie and Freddie reformed rather than eliminated. These include civil rights organizations like the NAACP, who are worried about the plunge in minority homeownership rates since the crisis; affordable-housing advocates, who worry what the world will look like without the GSEs (this summer, the Census Bureau reported that the homeownership rate had fallen to 63.4Â percent, the lowest level in forty-eight years); and community banks and other small lenders, who don’t want to lose all their business to the big banks.”

“The official explanation for this change is that the administration had no idea that the GSEs were about to become so wildly profitable, and so they executed the sweep of profits to prevent the GSEs from owing money they couldn’t pay. The sheer amount of money the GSEs started making immediately following the sweep makes it hard to believe this.”

“Another explanation is that the change in the deal came a year after the huge fight in Congress over raising the debt ceiling. Since that time, battles over spending have become commonplace. The profits generated by Fannie and Freddie, which go straight to Treasury, have at critical times helped buy breathing room, or, as Treasury Secretary Jack Lew said in recent congressional testimony, “As a practical matter, it’s what has helped us to reduce our overall deficit.” Thanks to the GSEs’ profits, federal spending was underreported by a combined $178 billion in 2013 and 2014, according to a paper by the Heritage Foundation. Not incidentally, there is no accountability for how the profits from Fannie and Freddie are spent; and once the money is spent, it is gone and cannot be used to buffer any losses they might suffer again.”

Keep The Faith!