Fannie Mae-No Politics (FNMA)

[capitalismforever]

That lady from Morgan Stanley who took up a job as CFO recently for Fannie Mae, correct me if I'm wrong but she was at Morgan Stanley for 17 years? I'm positive she wouldn't have just left that if she wasn't assured etc.

I don't know how long she was there, but I know she worked there. She probably was assured of a future. However, we don't know to what extent. Suppose she's hired to handle the CFO responsibilities and then transfer over to the new entities, if that were to transpire. Being hired by Fannie Mae tells me very little about the possibility of other details.

A more positive sign, to me, would be the joint venture Fannie & Freddie have entered into concerning the creation of a new single mortgage backed security. I'd classify that as a positive for not liquidating more so than the hiring of CFO.

I bring it up because in receivership, would the same persons job be at risk too?

I don't know the answer to that. I assume it's not impossible to transfer her position to a new entity. Has it happened? Yes. Example: SunEdison bankruptcy. Several board members were transferred last year to the Yieldco subsidiaries from the parent company; SunEdison.

I'm sure the person above wouldn't just leave a 17 year career at one place if she had a hunch regarding what you mentioned about receivership?

I don't believe a rational judgement could be made about that, as I've mentioned above.

Also what would happen to fannies new lavish headquarters in a receivership situation?

The legislation I've reference in HERA addresses that issue. The new entity can take ownership of the assets and liabilities of the business.

Lastly you didn't bring up the warrants. The government can make a huge sum of money just by exercising those. Why would they let this entity, who they can take further advantage of, go into a receivership where they'd lose out on those warrants?

I've addressed that issue several times in other posts. I believe people are looking at the warrants the wrong way. The more important asset of the warrants are the rights to control the business. That is far superior than the monetary aspect of owning the warrants.

Now, let me ask you a question. Why would the government, knowing that a new tax policy will require the GSE's to take a draw through the impairment of its deferred tax assets, not stop the NWS if their goal wasn't recievership? Currently $6b in equity. A 15% tax rate equals an $18b DTA impairment. That leaves a $-12b equity.