Fannie Mae-No Politics (FNMA)

[nats1]

What do you think will happen when it gets readjusted from 4% ~> 2.5%?
- That's a lot of free excess cash.

I think they will adjust it before the SPO to an ultimate 3%. However, the release/SPO is supposed to happen at the minimum core capital level or whatever its called at 2.5% and I think that is the $185B or so figure and that's what the "too far away" is based on. I really believe the Government wants to wrap this up before the election and will not go to the nuclear option of cashing in the seniors. But the organic recap is not really an option for the Government if it wants to cash in. The bigger the cap raise, the more the Government gets so this won't go on forever.

Nats