Fannie Mae-No Politics (FNMA)

[bradford86]

I think that there could be an announcement between now and when a new FHFA director steps in and takes action towards finalizing the capital rule and starting the chain of events towards capital raise that means something to parts of the equity here.

The problem you have to solve is one of figuring out how much value the pre-ipo equity is worth and how that is distributed across existing shareholders.

In around 10 days the proposed capital rule comment period ends.

Outside of that, the real question is when does the market start to do a better job of anticipating what parts of the share here are worth what. Right now I think there's a huge inefficiency in the preferred class of shares, and I've bet the house on it.

Even still, whether it's this week, next week, this month, or next; or not even this year, we are literally looking at months to decide how this plays out.

The writing is on the wall with the fhfa proposed capital rule. Now we have a split congress; Maxine Waters is good in my opinion for reasons that I understand. Obviously, some people disagree and point to public statements, but that's not what I'm going on. I'm going on what I know, because what I know is more important than the politics of what was said in the past for whatever reason.

Long story short, I don't think this makes it happen any sooner. I think that administrative action simply never needed congress/legislation to begin with, that's why it's administrative action.

Next 90 days are huge, next 9 might be. Next 19 might be, but I hear there may be some type of announcement, but I'm not getting my hopes up. I think that if nothing is going to happen, they might as well steal another net worth sweep payment at the end of this year, but hard to say when they just allegedly crossed the 10% moment, which means nothing to me, but who knows.

I own preferred only. I'm curious to see, more importantly, if Lamberth's recent ruling leads to a settlement that is based on par, or back interest or something in that nature, because I think that it may take more than par to settle those preferred shareholder claims now, and if this is going straight for recapitalization, that would seem to give them the upper hand in terms of settlement terms.

I have no idea, but I don't expect anything in the next 60 days but I'm hopeful that something happens.

The market seems to be completely missing the reality here that this administration is pushing for a recapitalization to a utility model, almost straight administrative action, and this split congress seems to help that narrative.