Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

With so much uncertainty I don't think anyone knows! Could the federal government keep them in perpetual conservatorship/nationalization forever? Possibly, but suppose they did, then what? The gses have experienced a huge outflow of hard to find Executive personnel since Mel Watts tenure. It will only get worse as attracting great talent to run and manage these financially crucial behemoths will become impossible without stock options and with a $600,000 salary cap in place.

Politically influencial industry groups such as the NAR, MBA, and NAHB will begin to realize that privately owned and managed gses will be much better at satisfying their needs than a centralized government czar whose subject to the political whims of whomever is in power.

As time marches on and assuming no victories whatsoever for any shareholder plaintiffs in any courtroom, Fitch, S&P, and Moody's will realize that with the SPSA in place as it stands now, the gses' will have large capital on their books but all of it belongs to the federal government and it is impossible to raise new capital and some if not all of the $7.2T in gse issued MBS belongs on the federal government balance sheet (CBO already thinks this is so now). This would likely end up impacting the federal governments AAA ratings and could result in higher yearly interest payments on the $22T federal debt.