Fannie Mae-No Politics (FNMA)

[kthomp19]

If the govt warrants are worth 100B then by simple math of how the commons own ~20% then our share would be 25B. Divide that by ~2B shares and we have 12.50 a share.

Then if we believe KT and his valuation of FnF being around 265B... Then incoming capital will be putting in more money than what they are getting out...

Naturally, I agree. I don't think there was ever a path to the warrants being worth $100B in the open market. Half that at best.

The govt warrants actually near worthless is my stance

That makes the existing commons near-worthless by extension. Just like 4 of the 6 scenarios in last August's CBO paper.

they may exchange all of the warrants for a reduction for some of the 29B return of tax credit to FnF

I don't see this happening.

1) The $29B return as a tax credit would only "cost" Treasury $4B per year, and this wouldn't even be a cash expense, just less income tax coming in from FnF.
2) Treasury cancelling the seniors and returning the $29B (on top of ending the NWS) represents a complete capitulation on Treasury's part: that's everything the plaintiffs want. In a settlement Treasury will demand the plaintiffs to give something, and that overpayment return provides the only real flexibility. If the plaintiffs really do want to settle I would expect Treasury to successfully negotiate that $29B downward, perhaps all the way to zero. And recall that the plaintiffs encouraged Treasury to exercise the warrants when they proposed the non-cash remedy.