Cognitive Dissonance, Fannie Mae And Freddie Mac, Greed, Spite And Ulterior Political Motives

Seeking Alpha - August 21, 2015 - August 24, 2015

By Wayne Olson

Fairholme has raised 16 important questions regarding Freddie Mac (OTCQB:FMCC) and Fannie Mae (OTCQB:FNMA). I addressed four of these questions in a previous article. In this article, I address the 12 remaining questions in reverse chronological order.

September 30, 2014, was an important day for Freddie Mac and Fannie Mae common stockholders and preferred stock holders. On this day, Judge Lamberth issued his decision in the Perry Capital case with respect to the legitimacy of the third amendment to the Senior Preferred Stock Purchase Agreements ((SPSPAs)) between the Federal Housing Finance Agency (FHFA) and U.S. Treasury (Treasury). Judge Lamberth’s decision acknowledges that it “is understandable for the Third Amendment, which sweeps nearly all GSE profits to Treasury, to raise eyebrows, or even engender a feeling of discomfort,” but he goes on to find that “HERA’s unambiguous statutory provisions, coupled with the unequivocal language of the plaintiffs’ original GSE stock certificates, compels the dismissal of the plaintiffs’ claims.”

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