Fannie Mae-No Politics (FNMA)

[Cubshawk]

RuudG --

Probably not... especially if the CSP is operational.

You can't possibly mean that. The transition period would almost certainly be rocky and unforeseen challenges would present themselves at every turn.

No prudent institutional investor would want anything to do with this aspect of the industry until everything shook out and was fully operational. Potential investors would want to be assured of what's coming - and that would be a tentative plan - not a certainty. The administration can't guarantee anything at this point - it doesn't control Congress.

And by wiping out the current share class it's almost certain that the number of willing investors would be a diminished group as many would be unwilling to risk capital on an investment that was treated in such a manner - and completely uncertain going forward due to litigation that will be sparked by that action.

To privatize the GSE's they need big institutional money investors to back this - and that ain't happening until they know what they are buying. It ain't happening overnight and the transition period would be rocky in a receivership. Very rocky.