Fannie Mae-No Politics (FNMA)

[kthomp19]

the only way to make this right is to cut a check, that means reversal of all the ill begotten cashflows to the UST, which would be a major capital raise w/o new issuance or dilution.

Since it's Treasury that would be cutting the check (and they have the lion's share of the power in this whole situation too), you would have to convince them of your definition of "right". I find that possibility quite slim.

Do you consider the 10% interest rate to be "ill gotten"? If so, what interest rate is appropriate? And why would Treasury agree with your definition?

If Treasury's magic check to FnF isn't enough to bring the companies close to the capital levels they will need to be released, where will the money come from with no new share issuance? And why would Treasury agree to provide a backstop while the companies build capital if their senior shares (and the attached dividend rights) are gone?