Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

All the bankruptcy talk is moot because FnF are already there. It isn't the entry into bankruptcy that shareholders should worry about, it's the exit.

Don't let Wall Street know the GSES are in bankruptcy. Last time I checked Fannie Mae Corporate Debt was rated AAA by Moodys.

Notice the rating on JPS.

https://capitalmarkets.fanniemae.com/debt-securities

This is there must be restructuring of the capital stack for FnF to exit conservatorship before 2040, and must be one period for existing shareholders (both common and junior pref) to unlock their value at any point.

Really? What if JP Morgan or Morgan Stanley or whomever the FHFA and UST hire to advise them on double dipping from the theft, tell them their is little if any appetite for Wall Street to fork over $100B to $200B in fresh equity capital into a 1st Loss Position after Wall Street does its due diligence here and is skeptical of the claim from the FHFA and UST that they won't obliterate equity Shareholders ever again?

Isn't the essence of this Private Capital in a 1st Loss Position/Public Mission partnership centered on the very notion that Wall Street can trust the federal government NOT to Nationalize their capital and take it ALL for themselves for nothing in return?

What if the FHFA lowers the ERCF?

It seems to me that if the UST wants to 'maximize' its payout, it would eliminate the LP and sell the warrants in phases over time under a consent decree that as certain milestones are hit, shareholders would have more of their Economic Rights restored. Being in complete control the federal government has the power to make that favorable for existing and any new equity Shareholders willing to risk their capital in these Public/Private businesses.

I think our JPS friends view their federal government partner as an opportunistic profit maximizer (ESPECIALLY in light of the most ANTI-CAPITALIST thing the federal government as a partner has the power to do - NATIONALIZE AND TAKE FOR ITSELF ALL THE ECONOMIC RIGHTS OF THE CORPORATIONS FOR THEMSELVES IN RETURN FOR NOTHING!).

The reality is that the US federal government is NOT in the 'profit maximization business', rather the US Government is in theory here to serve the American people. One brilliant way to do that is the Public Mission/Private Capital in a 1st Loss Position partnership with Wall Street. It keeps $8.5T off the liability side of the federal government balance sheet while providing safety and soundness to American Families and their Housing needs. No one has come up with a better system and many special interests have tried.

What exactly would happen in the event the federal government attempts to implement the 'dilution solution' (i.e., dilute the existing common into oblivion) and a legitimate challenge to the abusive and coercive governmental overreach here is filed in a federal circuit court?

No one really knows how the CONservatorships end and the JPS has always seemed like the least of 2 horrible options during the now 14+ year CONservatorship and Nationalization of the GSES.

Until we get (or the federal government gets) the boot off the neck of each GSE I don't think anything meaningful is going to happen with the restoration of our Economic Rights as equity Shareholders.

What's the significance of 2040? Is that some hard deadline, because if the ONLY limitations to federal agency power here is "whatever is in the best interests of the FHFA or the public it serves", I don't see any hard deadlines. Both corporations and the US Government have no expiration dates. Plus they can do whatever they want, including amending the SPSA at will.