Fannie Mae-No Politics (FNMA)

[JOoa0ky]

I understand and agree with you that everything is all wrong. Its completely messed up yeah...

But I just find some of these statements from the govt cbo incredibly fascinating: https://www.cbo.gov/system/files/2020-08/56496-GSE.pdf

Page 12

In CBO’s simulations, the GSEs have three primary
goals for recapitalization: to use a common-stock offering
to fill the shortfall between their current and required
capital; to redeem their outstanding senior preferred
shares, which are held by the Treasury; and to redeem
their outstanding junior preferred shares, which are
25. When the GSEs and the Treasury entered into the preferred-stock
purchase agreements, they agreed that the GSEs would owe a
commitment fee on every dollar of support received from the
Treasury. To date, the Treasury has not charged a commitment
fee, but it has retained the right to do so on past and future
support.
held by investors. The simulations yielded the following
results:

(3) Goals for recap
- Fulfill required capital
- Redeem Seniors and JUNIORs
- Set a periodic commitment fee

Page 13

Redemption of Shareholders’ Claims in CBO’s Model
CBO’s model incorporates the judgment that in scenarios in which the GSEs’ common-stock sale did not raise
enough funds to redeem the full face value of both the
senior preferred and junior preferred shares, the Treasury
would take a reduction (known as a haircut) in the value
of its senior preferred stake before requiring junior preferred shareholders to do so.30 That outcome would be
inconsistent with the priority of interest between junior
and senior preferred shares. But it recognizes that changing the GSEs’ commitments to junior preferred shareholders would be difficult outside a receivership scenario,
in which the Treasury, as owner of the senior preferred
shares, also owned the GSEs’ common stock (through its
warrants).

- Wow, they even admitted that the seniors would have to take a haircut before juniors do if the situation were to arise...
- Also that second line, the govt recognizes that changing the gse's commitment to juniors would be difficult outside of a receivership scenario.

You know, just mulling over everything and thinking... the financial advisors that Fannie and Freddie hired, JPM and MS. I'm pretty sure that its their restructuring team that got put on the job because I don't know if a conservatorship resolution team even exists?

The insufficiency in capital was, is, and has been a result of a government hell bent on pilfering, robbing their conservatee's. Totally illegally produced shortfall. The government is in a bind, not the companies because they ARE profitable! If they don't try to make things right, they may end up with no choice except to buy and nationalize the GSE's completely. The amount of capital can not be raised by any magical conversion and capital situation keeps getting worse, higher, wake the hell up! Too much money is needed and the GSE's keep adding more to their mortgage liability (7-8 trillion now) so more capital needed every day this goes on. Government has constructed a double edge sword that they have situated above their own neck. They thought they could blindly rob these corporations and then later tie a gigantic first loss capital raise to investors. Not going to happen. Why? Because #1 NO ONE, and I mean no one in their right mind trusts government currently, see current polls. #2 government would need to pay new investors a huge premiums, if they can even attract them, for the 1st loss insurance capital they are asking for. Mortgages, especially the 30yr would need to charge an additional 5-6% or even more to cover the cost of investor capital and the greedy governments take demand,,fees already being added. #3 this is being watched, do not think otherwise. Big investors who have a public forum that are or have been in this do not forget being screwed. They will raise the alarm along with current investors about any capital raise if this shady ponzi scheme government does not do right by current stake holders. Its called business morals, scruples and sticking to contracts and laws.

We are all either made whole when the government transfers rights and property back to shareholders as the conservatorship law states, or they buyout and nationalize complete, then change to a utility model, or they bankrupt. The fantasies of one group holding all the leverage is furthest thing from any reasonable persons mind...unless you are the government, THEY OWN IT ALL NOW through bogus takeover, you don't matter for crap. If JPS were so special, why are they fighting in court, spending millions? Why litigate if the outcome you keep pushing is preordained? I'll tell you why, NOTHING is preordained at this point. Chatter all you want about capital stack and fulcrum security, it doesn't amount to a hill of beans until we are released, and when that release happens - if ever, the calculus will change.