So if Calabria is confident he will be gone, the consent decree can be amended by a new FHFA director providing FnF agree to the amendment, e.g., cap rule coming back down.
Before Jan 20th, Consent Decree requires a Capital Restoration Plan (CRP), and the CRP requires the PSPA to essentially be deemed repaid. If the plan all along was to have SCOTUS rule against the Gov - obviously there is no appetite to defend the FHFA or NWS by the Gov - then the CRP should have a long enough tail to allow for the recovery of monetary damages. Seems a bit far fetched for me ...
So ... I’m not sure much can be done beyond the bare minimum unless Mnuchin wants to allocate significant funds to FnF.
The warrants, as ACG David Metzner believes, acting as “grease” to get the job done could mean anything. Could be a private placement but I would think the window would need to be opened as an auction, etc., meaning public, so I don’t think that can work as I believe the Gov would need to entertain competing bids to avoid any conflicts of interest, etc. All of that would be public knowledge and would allow all parties to know the plan.
Are the warrants needed to amend the PSPA? What does Mnuchin think about the 30% overpayment? How would Mnuchin reconcile the warrants with a $30 billion overpayment? Does he evencare about the overpayment?
Good time to interject Crapo’s statement during the Senate Finance Committee opening statement where he told Mnuchin to do what is necessary and get the job done as the administration sees fit. Given all the partisanship I suspect the minimum will be done - PSPA and Consent Decree.
Further questions on the warrants:
Does the Treasury amend the terms of the warrants by depositing $100 billion into FnF coffers in exchange for the warrants? Doubtful
Does the Treasury auction off the warrants at fair market value, which most likely wouldn’t happen until Yellen is Treasury secretary ... Doubtful
Does FnF agree to pay 10 billion to repurchase the warrants out of future earnings?
Does Mnuchin return the 30% overpayment and deduct a % for the warrants?
There are a tone of moving parts that the gasbags, hackermans, lights, etc are not paid to uncover ... hence Epstein et all.
