Sogo....those are concerns of mine as well in this very complex situation . Your narrative does sincerely point out the political concerns of milking the cash cow for now and wait until the money runs out then decide what to do with them . Something Congress has been so far incapable of. Or to stop the sweep and let them build capital. Overall we are talking about 25-30 billion in revenue over the next year or 2 vs over 13 trillion dollar gov't debt. It would seem the revenues of the GSE's ,although substantial ,especially to us, are actually just a drop in the Gov't bucket given the big picture of Govt' spending. And on a simplistic basis, (i.e. ignoring that a Perry decision hopefully to come in the next few months and the information in hidden documents soon to be released), it would seem the best solution would be to get the companies recapitalized as soon as possible and not wait until they run dry of capital and place the economy at risk (either real or perceived). You are right in noting , that the next 4-5 weeks will be the litmus test for this as the Treasury has until the end of March to decide to milk the cow or begin the recap process. My guess is, likely we will hear from the Perry decision before this. If they affirm, likely in the long run won't change much but will drop the stock price until a government decision is made.If it is remand (most likely) then likely things won't change much . If it reverses , then Mnuchin and Trump have their work cut out for them and likely will not appeal. The stock should rise to 5-8 range.The trump card (excuse the pun) , is when the documents will be made public and what is in them, and how that information can be used by the current administration. Also keep in mind the interesting changes in the table (fannie) and wording (freddie) of their financial statements and the comments of Tim Howard in this regard. :)
