Fannie Mae-No Politics (FNMA)

[LuLeVan]

The problems with your arguments are:

- Without a capital raise there is not enough equity to exit conservatorship, unless you wait for at least another 10+ years (slow recap).

- Government wants a faster recap because the next housing crisis due to Covid is looming. Government needs a fresh layer of private capital as a buffer asap. The $45 billion equity currently at hand might get lost quite fast.

- To entice new investors to sign the NEW commons (fast recap), they must be offered a decent or even huge share of the companies. This necessarily requires to dilute the old commons.

- In other restructurings like GM the old commons became worthless. I know that GM was REALLY bankrupt, and FnF were NOT bankrupt in 2008. But the current narrative ("another big lie" - T.P.) asserts the opposite. Even Calbria used the term "restructuring" several times.

- So as a compromise I expect old commons to get something, but probably much less than generally hoped for.

- New commons might get listed with the old ticker symbols FNM and FMC. Old commons (OTC) are probably exchanged for new commons according to a certain ratio (such as 10 to 1).

Just my guesses.