Fannie Mae-No Politics (FNMA)

[bradford86]

Hindes Choice Excerpt
...
a group of Fannie and Freddie preferred
shareholders recently put forth a plan to re-capitalize
the companies. Under their plan, the government
would keep its $100 billion profit and the lawsuits
would be withdrawn. Further, Bill Ackman, whose
Pershing Square Capital is one of the largest holders
of common shares, estimates that were it to monetize
its 79.9 percent equity stake (as it successfully did with
AIG), the government could pocket another $150
billion. Were the preferred holders’ plan – or
something like it – to be adopted, the government
stands to walk away with $250 billion – a quarter
trillion profit. If, as Treasury Secretary Steven
Mnuchin has said repeatedly, the administration
really is committed to getting Fannie and Freddie out
of conservatorship, Trump & Co. could end up taking
credit for making the best deal for America since the
Louisiana Purchase. On the other hand, the
opportunity is significantly diminished if Judge
Sweeney allows the shareholders their day in court.
That’s because while the other lawsuits challenge only
the net worth sweep (and seek only a return to the
original 10 percent dividend), one of the cases
challenges the legality of the 2008 takeover itself. A
court ruling invalidating Paulson’s seizure would not
only negate the aforesaid $250 billion profit, the
equation would then reverse, as it opens a Pandora’s
Box which could end up exposing the taxpayer to the
possibility of hundreds of billions in damages instead.
The clock is ticking. Spring is not that far
away. As the author of The Art of the Deal likes to
say, “we’ll see what happens”.


https://t.co/NUKXXswrM3