Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) are two Fortune 50 companies that the government agency, the Federal Housing Finance Agency, runs as a conservator without fiduciary duties to shareholders. This conservatorship began in 2008. In the beginning of conservatorship, the government had negotiated a deal with a tax collector on behalf of tax payers and $100B+ has been transferred to the tax collector on a net cash basis since 2008, leaving taxpayers penniless in 2018. The net result is Fannie Mae and Freddie Mac are being bled dry as a matter of public policy, not because they are broken business models. The government says that by virtue of the net worth sweep that it gets the net worth of the companies, a $187B liquidation preference and 79% warrant coverage. AIG's (NYSE:AIG) recapitalization ended up with more dilution than just the warrants.

Investment Thesis: The government appears to be facing sanctions in the Court of Claims. The judge is ordering the government to explain why the court should not require the government to pay plaintiffs' reasonable expenses incurred in making the motion to compel, including attorney's fees. It appears that plaintiffs thought whatever order was filed in Sweeney's Court of Claims was relevant to the Perry Capital Appeal because they sent the court there a sealed letter and put out an email to investors saying:

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