Fannie Mae-No Politics (FNMA)

[FOFreddie]

First of three posts - I am only looking at FMCC but come up with a best case value around $ 30 in 2025-27 time frame post recap and release. Of course just a total guess but this value would only be fair. FMCC was around $ 20 per share before the NEC and UST torpedoed the negotiations with Congress on March 8, 2008 with the Barron's Memo that would stabilized the MBS market. Add $ 10 for loss dividend and you get $ 30. Ackman also came up with a valuation in the $ 30 range. The key is that the UST needs to get the new capital ASAP to minimize duration risk and maximize their returns. Trying to cramdown legacy common is just plain dumb when inflation is a real concern and their biggest exposure is the duration risk in the required ROI for new capital.

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