Fannie Mae-No Politics (FNMA)

[contrarian bull]

Well - I am a contrarian so always assume the worst.

The only risk of that type I give credence to is the formation of new companies with assets and liabilities being transferred over

To me this is equivalent to liquidation. I have been through this with many, many companies and shareholders usually just get equity in the new company equal to the tangible net worth at the time of transfer.

Even that is pretty unlikely in my view because the new companies would not have the Congressional charters.

I don't think those congressional charters are worth much. Companies as big as f&f will be bailed out if needed no matter what the law or congress or anyone says. I think this is why congress wants to cash in on that implied backing - since it's really not possible to let them fail. Might as well get paid for backing them.

It would also kick off a whole new round of lawsuits because the NWS being unwound or not would affect the payouts to different classes of shareholders drastically.

Ha, ha, ha! Given the success shareholders have had with the courts - you think anyone is worried about a new round of suits? Time value of money - even if there is a big settlement it'll be 10 years down the road and will effectively cost pennies on the dollar.

Trump's EO directing to Treasury to investigate how to prevent bailouts

I forgot about that. Well best way to prevent bailout of f&f is to leave them just as they are, charge a fee for backing them and make them retain earnings.

A full recap through retained earnings alone would take roughly a decade, theoretically "leaving taxpayers on the hook" that whole time.

As you said - as f&f build capital the risk declines. I think that would be acceptable to congress.

Selling new shares to build capital would best be done a few years after they started retaining earnings and possibly after resuming dividends. Those two things would make the value of any new stock much, much higher. Issuing new stock when the shares are at $2 would require massive dilution - doing it 2 years later when shares are $20 would dilute much less. I think the full recap in reality would only take 3 years or so, and after just 1 year the risk to the taxpayers would reduce by double digit percentages.