Fannie Mae-No Politics (FNMA)

[Wise Man]

Tremendous analysis posted on #Fanniegate in several tweets during the 3-day weekend. The bottom line is that the legislators left a cheap UST backstop on FNMA when it was fully privatized after the repurchase of the Govt's Preferred Stocks in 1968. It's related to an Authority of Treasury to purchase REDEEMABLE OBLIGATIONS, which has the same effect on Equity as the Preferred Stocks. Actually, they are Preferred Stocks with other name.
It means that the low yield backstop must be respected, and the high yield contemplated in HERA was meant to carry out The Secret Plan, that is, a plan of fast repayment of the SPS and fast recapitalization, at a 10% dividend and NWS dividend (top speed) gear. These are the only two reasons that HERA and the CFR 1237.12 allow FnF to pay dividends while in Conservatorship, otherwise dividends are restricted.
Note that FnF would have carried out the same FAST TRACK plan without the need of laws and regulations, because it's the obvious and only business judgement.
With this plan, all the lawsuits are meritless but WaFd's about a Takings claim with the Warrant and that FnF engaged in state-action.
Say with me: THE DIVIDEND WAS IMPECCABLY SUSPENDED.
JPS are the losers, better said, Junior Redeemable Obligations.