Fannie Mae-No Politics (FNMA)

[NeoSunTzu]

- Fannie have a net worth of $64b but needs a minimum leverage requirement of 2.5% ($114b) to exit cship, which means $50b needs to be raised today from outside investors

Aside from what Wise Man stated this is wrong on a number of other points: 1.) the current letter agreement between UST and FHFA, which can be changed, but has not been, calls for two consecutive quarters of 3% capital to exit c'ship, then going forward 2.) the Calabria capital rule determines the ongoing requirement which is NOT 2.5% and unless the rule is changed will NEVER be only 2.5%. The FHFA website (or UST) where the rule is defined has a base level of 2.5% then a certain percentage of other asset or capital categories which will fluctuate but will NEVER be 0. In fact, the calcuation for FNMA as of the last quarter of last year (I believe) turned out to be 4.4%!! The same quarter for FMCC turned out to be 3.3%. Again, unless the rule is changed it will NEVER be just 2.5%.