Fannie Mae-No Politics (FNMA)

[FOFreddie]

Hi Glen, Dont you think your analysis around the SPSA conversion is premature until we see the final resolution of the Separation of Power Cases - isnt it possible that the SPSA will be deemed unenforceable due to a Separation of Power violation?

Also - are you assuming that the UST could sell new equity in the GSEs without any additional spread for the potential of a new Conservatorship. With the denial of Cert of the DC Circuit cases there is nothing stopping the UST treating new common equity any different than all the JPS they sold during 2008 right before Conservatorship. Why buy GSE equity with a 3 pct div yield when you can buy equity in a FDIC regulated entity with a 3 pct div yield. There has to be a risk premium in a rational market?

Once the UST starts the cram down process doesnt this raise the obvious consolidation issues with the rating agencies? The UST will claim more than 80 pct economic control via the SPSA and there should be a consolidation? Thoughts?