Fannie Mae-No Politics (FNMA)

[jeddiemack]

The warrants - do not recapitalize the gse's the go for free to the government.

So follow this.

1.1B shares value per share = $200
5.5B shares post value per share = $40

At 1.1B shares to raise 40Billion you need to offer 200M Shares

At 5.5B shares to raise 40Billion you have to offer 1B shares.

So you go from 1.3B shares to near 7B shares outstanding.


The easier way to raise capital would be for the government to give back the excess money stolen. Around $30Billion for Fannie presently, and then for it to keep a level of retained earnings for the next 3-5 years.

In 3-5 years it could have retained earnings of 100B

Which is more than 5x the amount it ever needed during the last down cycle (net of cookie jar accounting tricks by the government)

Raising capital for Fannie and Freddie is really easy if the government will get out of the way.