Fannie Mae Preferred S (FNMAS)

[rosen62]

Stegman's speech is not entirely bad.

For one, he provided an inventory list of reforms. He also suggested this is a new path, that reforms should continue and that while not the desire path it is an alternative to legislation. He also said that by legislative reform he expects that these reforms become part of the new law. So he may be simply asking congress to produce a bill that has the reforms in black and white.

The only risk I see in his speech is him questioning the charters and pointing at Congress. Charters oppose the government's desire of a total wind down. In any receivership, Congress must reconstitute charters in new companies. Stegman asking Congress to look at charters may be direct focus on just that: removing the impediment by which the companies will completely dissolve out of existence.

But he never said this. It is just one hypothesis.

I also consider an improvement from the past that he used the word capitalization directly. The more this is discussed by the administration, the more they may get used to the idea and switch to the other side.

I also wonder about the legal ramifications of his speech. This is Treasury running the conservatorship in no uncertain terms.