Fannie Mae-No Politics (FNMA)

[Wise Man]

***CALABRIA DIDN'T STOP THE NWS***
FnF are retaining earnings but, since they also hand out SPS for free to the Treasury equal to the Net Worth increase like before, it has to be recorded as an offset in the balace-sheet a reduction in the Additional Paid-In Capital account (money ponied up by the shareholders above the par-value) or, which is the current case, in the case it's already $0, a reduction in the Retained Earnings account. So, net effect, $0 capital built.
What happens is what I have denounced in a complaint with the SEC last week. FnF aren't recording in the balance sheet the SPS increase in the liquidation preference. For instance, FMCC posts $72,648 million when the real liquidation preference stands at $82,152 million. This way, the reluctance to post the offset mentioned, makes FnF post a charge on the Income Statement for the same amount, so that the EPS is $0.
This is a Financial Statement Fraud. Up to 20 years in prison.
The path to the release from conservatorship is set forth in the law: put fnf in a sound and solvent condition.