Fannie Mae-No Politics (FNMA)

[kthomp19]

In addition the warrants the Treasury holds should not be exercised, the Treasury has been paid in full, no reason the Treasury due 79.9% of the common stock of the company.

More nonsense. The warrants exist to provide enhanced value to the taxpayer. They have absolutely nothing whatsoever to do with Treasury recovering more than its initial investment.

Note 2: The liabilities on the books of $4.3 trillion are backed by real property, it's not liabilities at all tangible assets.

It's hard to tell what this even means. The entire purpose of a balance sheet is to show the balance between assets and liabilities, with any differences belonging to the equity section.

Fannie has $4.232T worth of liabilities on the balance sheet. Not zero.

The advantage of the JPS is in a receivership; And receivership is not in discussion any longer.

Nope. The juniors sit above the commons in the capital stack. That means if the commons are worth even a penny then the juniors are worth full par, and if the juniors are worth anything less than par then the commons are worth zero. That's true in receivership, in conservatorship, and outside of both.

An advantageous position in the capital stack means everything in a restructuring, and FnF must go through an equity restructuring before leaving conservatorship because they are hundreds of billions of dollars short of their regulatory capital requirements.

FACT: The Liquidation Preference can be paid in full and the SPS canceled.

I glossed over this the first time, it got lost in all the other common nonsense.

As a FnF shareholder, you really should not want the seniors cancelled completely. That would kill the funding commitment, which in turn would drive FnF's cost of borrowing way up and reduce their income by a lot.

Instead we should want Treasury to write down/convert all but $1B of the seniors, that way it is owed very little in dividends post-conservatorship ($100B per year) while the funding commitment remains in place.