There are a lot of people who think this two branch government won’t work out and are strengthening their bets that the court system will at least attempt to review the laws put in place by congress.
Both the Berkowitz and Perry Capital appeals have been filed after the Lamberth decision. Berkowitz’s Fairholme Fund released a press release on the matter stating:
The resolution provisions of HERA are virtually identical to those that apply to U.S. banks. We are confident that Congress did not authorize the conservator – a Federal agency – to operate a profitable financial institution perpetually, to strip away all of its capital, to pay all its future profits to another Federal agency, to violate the order of priorities of corporate law, to transfer its assets without determining fair price, to replace the organized claims process of receivership with the self-dealing expropriation of private property, or to make corporate governance decisions without a standard of care. And yet, if the D.C. District Court’s opinion stands, FHFA is authorized to do all of this with impunity, previously and forever. In fact, the District Court opined that it lacks the authority even to review the conservator’s actions – a fundamentally flawed interpretation of the statute. After all, why would Congress write a 260-page HERA statute specifying and limiting the conservator’s powers if no court has jurisdiction to enforce it? Where there is no remedy, there is no law.
Seriously – why write the law if they don’t need to. Adding to the appeals (and of course my purchase of additional shares of $FNMAS), Ackman announced yesterday that he is adding 20% to his position in Fannie Mae.