Fannie Mae-No Politics (FNMA)

[kthomp19]

Full Private ---- Old System ---- Conservatorship ---- //----Receivership New Entity ---- Nationalization

Government Guarantee
No Guarantee -- "Implied"/limited --- Express through SPSPA -- Expressed ---- Full Faith and Credit

Over this spectrum is Regulation, capital requirements, affordable housing social programs, multifamily programs, investment banking, retirement systems. These are just some of the factors weighing on this problem. As you see risk allocation, political views on social programs, the constitution, bankruptcy laws etc. are all factors.

Great breakdown. I like this way of thinking about things, as two spectrums.

Old system - This is actually the compromise

As far as being government-sponsored and with an implied guarantee (that the market will assume; the government cannot stop the market from doing so), yes.

As far as some of their pre-conservatorship practices, no. I refer to aggressive lobbying (which will, and should, remain shut down) and a large retained portfolio (which will, and should, be either minimal or zero).

How capital is raised and dilution is the valid question. But if you screw over past investors, how easy will it be to raise capital?

Being new here, I would like to ask you your opinions on a few things:

1) How much capital do you think FnF will need to raise?
2) How long do you think they will have to do it?
3) What does "screw over past investors" mean? The conservatorship and NWS already happened, and most of those who held shares at the times of those events have sold their shares since then.

But Charlie Gasparino said they were considering the "Milken Institute Plan" - Sit down, this plan says start building capital and then figure out what to do. This isn't a plan. This is literally the first step in ANY feasible plan to recap release.

Good point. The only plan I'm aware of that is actually fully fleshed-out is Moelis. I'm not sure what you think about it, but on this board it's very hot-or-cold.

Lastly this $#IT takes time, it's politics, its complex. Long till 2029.

I guess this answers my question #2 from above. You really think it's going to take that long?