Fannie Mae-No Politics (FNMA)

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I am by no means an expert on accounting. However, this was my point. By no means was i saying that a government guarantee would count as core capital, but that a guarantee would reduce the liabilities on the balance sheet. Thus, reduce required core capital of the company. This would then change the assets to liabilities ratio, allowing FNMA to sell assets to get core capital. The argument can be made that this government guarantee is already in place through the existence of the SPSPA and their line of credit. Also, it is important to note that the government currently views this line of credit as "core capital" for the purpose of satisfying the statutory requirement, a key assumption to the Net Worth Sweep. The more i learn and follow this the more i think that many are underestimating the role accounting will play in the recap and release.