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Thursday, 07/18/2019 8:00:19 AM

Thursday, July 18, 2019 8:00:19 AM

Post# of 796315
Calabria launches a last warning to the JPS holders. 5 more years of Conservatorship means that FnF need 5 more years retaining earnings, around $140 billion together. Along with the funds owed by the Treausry so far (between $99 billion of SPS overpayments and $147 billion if we add other amounts due, like the TCCA fees) it means that there will be enough capital in 5 years' time to redeem the $33 billion worth of JPS outstanding. Two important things: If this is made public, the common stocks surge to a valuation of PER 13 times, while the JPS would trade as a discount note. Just apply a 5 yr discount rate to their par-value + the stock overhang + hedge funds' playground (around 40% off their par-value on day one). Secondly, the 5-year Conservatorship can be switched for a 5-year Capital Restoration Plan, like the one approved by the FHFA for the FHLBanks, so that FnF are freed from the Conservatorship stigma. Read #Fanniegate hashtag for more detail.