Fannie Mae (FNMA)

[Robert from yahoo bd]

Interesting, relying solely on gfees seems like it will be their bread and butter revenue producers for awhile, perhaps that will allow them to focus on underwriting and minimizing losses.

MC seems content on juicing the Capital Ratio to 4+%, I know you have told me in the past, that it's not that cumbersome. Assuming management will hold 10% to 30% above all the minimums required by their regulator (doesn't JPM do that) to assure shareholders that future dividends will likely keep flowing:

(1) Haven't the GSES over the last 50 years had a much lower total capital ratio?

(2) What do you think are the positive and negatives associated with holding say a TOTAL of 3% v 4% Capital?

(3) Do you think MCs stated philosophy of "more competitors in the Secondary Mortgage Market, the better", has contributed at all in his decision as to how high or low the TOTAL capital ratio should be?