Fannie Mae-No Politics (FNMA)

[kthomp19]

So we are forced to raise capital for up to 4% of assets and we will hold 4% retained capital for X number of years. Then at some point in time, someone will wise up and say we only really need 2.5% at best.

Sandra Thompson has already lowered the capital requirement to 3%, but I'll play along.

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

I'd bet dollars to donuts that cash goes to Treasury before any shareholder even gets a whiff of it. The political backlash of an enormous special dividend to private shareholders would be quite unpalatable.