Fannie Mae-No Politics (FNMA)

[Unhombrealado]

“Why will the government "require and explicit paid for guarantee for catastrophic losses"? The government did not require such fee for banks, GM, AIG, etc., etc., so why pick on fnma??? “

The same reason why’re still in conservatorship and none of those companies are. FnF operated very differently from those companies and Mnuchin and Crapo have both said that if there is a guarantee, it has to be explicit and paid for (search on YouTube the last hearings). If there isn’t a govt guarantee, either the market won’t be as liquid or the profits won’t be as big. As an investor buying a product that a private company insures instead of the US govt, you will require a higher yield as it is a riskier investment.

We are guaranteed by the govt right now. Are you talking about the future? Capital requirements are not the same as guarantees. But , if you want to pump this to unrealistic expectations, go ahead. I am long, but anyone giving a price higher than 30$ is selling smoke. Hedge funds have done their homework, have much more inside info, and they are predicting much lower prices.