Fannie Mae-No Politics (FNMA)

[Wise Man]

***BOMBSHELL*** NEW ANALYSIS POINTS OUT THAT THE PLAINTIFFS DON'T REQUIRE THAT THE CANCELLATION OF SOME SPS, BE DEEMED TAX-EXEMPT INCOME (CORE CAPITAL)

The fact is that in the lawsuit and in the oral arguments, they only request a refund of $29 billion as a tax credit and the SPS be deemed "repaid", like any other obligation that FnF pay down quarterly with their cash. Both have no effect on the Core Capital and thus, whether the plaintiffs win or not, the deficit of Core Capital over the Risk-Based Capital requirement would be the same as today: $399 billion and $514 billion if we include the "prescribed buffers".

The only difference with the current situation is that now there are $243 billion SPS outstanding, and with the lawsuit it'd be $50 billion because they only challenge the $191 billion SPS at the time of the lawsuit and they don't mention that the new SPS increased for free have to be deemed repaid as well.

For the capital requirements ($320 billion published in the last earnings reports; $205 billion without the buffers, because FNMA said $75 billion worth of buffers and FMCC didn't disclose it. I assumed $40 billion) what only matters is the Core Capital.

My prior analysis pointed out that the $191 SPS would be cancelled and thus, FnF post earnings and core capital. But this is not what the plaintiffs require.
This shows their attitude: they seek to deplete the Core Capital in order to increase the Capital needs, for the assault on FnF at rigged prices (secured deals)