Fannie Mae-No Politics (FNMA)

[kthomp19]

Another solid post.

Your position is supported by none other than Mark Calabria himself, who said at the beginning of April (7:03):

It has always been my view that an exit from conservatorship is going to require a large capital raise by Fannie and Freddie.

This means that current common shareholders will have no say in this process because it would happen while conservatorship is still in place. The same goes for a junior-to-common share exchange that the re-IPO investors will likely insist on.

And even in the case that the capital raise follows release, Calabria still gets to determine the form and amount of the capital raise as long as FnF have less core capital than his minimum capital standard (which will certainly be the case before said capital raise). Tim Howard explained it quite well.

Bottom line: current common shareholders will have absolutely no say whatsoever in the capital raise process. They will also be heavily diluted by it according to Calabria. The storm is coming, no amount of fist-shaking will stop it.