Sunday, February 05, 2017 9:17:13 AM
If you believe the 11,000 pages of withheld documents reflect that the SPSPA was a backdoor bailout of the TBTF banks at Fannie's expense, then the draws to make up the losses caused by FHFA requiring Fannie to buy MSB at par, then mark-to-market on Fannie's book all become damages. See the prior Seeking Alpha article examining FHFA's privilege log and speculating on that issue. Remember that Treasury has four times the withheld documents as FHFA.
Once Trump becomes aware of the contents of the withheld documents, assuming they reflect the bailout intention, and once Trump is informed Justice and Treasury will lose the argument to keep the documents privileged, he will have to settle on the basis that the entire FHFA was a fraud.
Now rerun the calculation. Instead of $37.3B returning to Fannie, the number goes to $154.4B (dividends) + $117.1B (draws) = $271B. Subtract a reasonable reserve. (Tim Howard, the former Fannie CEO has argued for $60B, (2% of $3T) here, so use that.) $271B - $60B = $211.5B . Divide by the outstanding Fannie shares after the warrants are voided, roughly 1.2B shares, to get $176.3 per share. Add to that the $75 to $110 per share common value above on a going concern basis to get a range of $251 to $286 per share.
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