Fannie Mae (FNMA)

[FOFreddie]

For FMCC - Common Equity and a firm underwriting commitment has to be $82.6 bn. How does FMCC get $ 82.6 bn and ALL litigation has to be settled and warrants exercised.

Thoughts:

1. Seems to leave a lot of room for SCOTUS to make big ruling without hurting UST. Leaving room for a big derivative claim and making the NWS ultra vires or invalid because of status of FHFA. Leaves a lot of runway to make the big push against the Administrative State ie limitation on Humprey's Executor?

2. Everything needs to be settled to get out of Conservatorship. Dont see a way around this even if this Letter is ruled invalid because it is prudent for a Conservator?

3. Dont see how UST can holde 80% of the GSEs without having a consolidation issue - maybe the thought is that the warrants can be used as part of the Settlement?

4. Why put the Congressional action date at Sept 30 2021. Hopefully all the grown ups ( Powell, Toomey and Yellen) were aware of this and will push Congress to act?.

5. Probably means the JPS will have to convert to have a chance to get to the $82.6 bn. JPS conversion will probably be part of the settlement. Probably conversion on the offering price?

6. Seems like a mind boggling firm underwriting committment. Maybe $ 40 to $ 50 bn for FMCC alone assuming $ 40 bn of equity and JPS conversion. It would be nice to get a big derivative settlement on behalf of shareholders?

7. SCOTUS will be very very important. Shareholders will have to settle or probably wait for years to ultimately force a settlement Common will depend on what type of derivative settlement is negotiated. UST has a lot of latitude to settle but will want to have to settle. SCOTUS is going to be very important - we need the big spank on socialism and nationalization?