Fannie Mae-No Politics (FNMA)

[RCChristian]

Found a valuable Tweet thread from Calabria discussing the GSEs, bailouts, etc. It was really really unclear what his solution or what he was really getting at.... maybe you guys can read better than I. The only thing I got was he was against "all" bailouts including banks and the GSEs. Then asked what would he have done instead, he replied.. "i would have done debt to equity swaps for anyone who was actually systemic & had long run value, whether bank or GSE" What does that mean? Debt to Equity swap? Does this mean dilute your shares and raise more funds to payoff debt? I think this is what it means.

Here is the Tweet Thread:

It takes an immense amount of cognitive dissonance to complain about #TBTF banks but think #GSE model is fine

— Mark Calabria (@MarkCalabria) December 18, 2015