Fannie Mae-No Politics (FNMA)

[kthomp19]

1. If catmans high cap # was gonna be the final target, it would have been left alone.
But, since it wasn't, then they either can't follow through with cat's # in place and/or don't want to. So his # is out.

A different administration is in place now so this argument is irrelevant. Calabria's 4% cap number, or more specifically the 1.5% PLBA, is no longer in place.

2. If a high cap raise was gonna happen, then it would have by now. And it would be based on cat's bs #(see 1 above). But, since they didn't, it must mean they can't or don't want to do a cap raise based on his or any #(especially if absurdly high). So a cap raise is out. Retaining earnings is in.

This is false. The Collins plaintiffs' lawyer, David Thompson, specifically said that the are many steps needed to get FnF out of conservatorship and that they must be done in a specific order. A capital raise happens at the end of the process, so the argument "if it was going to happen it would have happened by now" is false. You made this same mistake several other times in your post.

Think about it: the exact same logic you used would support the statement "If Fannie and Freddie were ever going to leave conservatorship, it would have happened by now, therefore they will never be released." That statement is false, and therefore so is yours.

You also need to realize that even if the core capital requirement was lowered to 2.5% (the lowest allowed by HERA and 0.5% lower than Sandra Thompson's proposed standard), and even if Treasury wrote off the seniors completely, FnF would still be six years away from hitting that standard by only retaining earnings.

3. If a conversion of sps to common was what was wanted, they would have done it. But, since they didn't, it must mean they can't or don't want to. So, conversion of sps is OUT. And a write down of LP is in.

Wrong, see above. Writedown or conversion of the seniors is something that would only happen just before capital is raised.

4. If warrants were gonna be exercised in part or in full, they would have done so by now. But, since they didn't, they either can't or don't want to. So, warrant exercised are OUT. And buyback at next to nothing price by FF are in or warrants are cancelled entirely.

Wrong, see above. Warrant exercise comes late in the process too.

5. If they were going to officially nationalize, they would have. But, since they didn't, then they wont because they can't or don't want to. So nationalization is OUT. And freedom is in.

I agree. What the government wants is de facto nationalization: all the control, all the profits, none of the balance sheet consolidation or bad press. And up to this point they have gotten exactly that. But they don't want full, actual nationalization where the privately held shares are extinguished.

6. If they were gonna convert jps to common, they would have. But, since they didn't, they wont because they can't or don't want to. So jp conversion is OUT. And a return to a free market is where you find your par (which you are entitled) or a sale of new jp will finance the buyout at par of old jps.

Wrong, see above. A junior-to-common conversion is another late-in-the-process step.

7. If gov't documents weren't hiding something they would have released them. But, since they didn't, they won't unlessed forced because they can't or don't want to. So voluntary release of govt documents, somehow proving govt is innocent (he said sarcastically) is out. And govt fighting to hide their vindicating documents ?? or being forced by court to reveal is in.

I agree.

8. If the gov cared about money more than power and influence, they would "cash in"??. But, since they didn't, they either can't or don't want to "cash in". So "cashing in" OUT. Limbo / purgatory is in, unless forced by court/ time.

As things stand now, I agree. But once the government either chooses to or is forced to give up the power, then they will grab the money. Releasing FnF without converting the seniors or exercising the warrants would be giving up both the money and the power. Do you really expect that to happen? I don't.