Fannie Mae-No Politics (FNMA)

[LuLeVan]

There is also the (remote) possibility that a settlement is being prepared. FHFA and Treasury could decide to release the twins and raise capital via 5th letter agreement. Then, most likely, all Fannie and Freddie shares (commons & JPS) would be suspended from trading for an extended period of time. With the capital raise, enough capital would come in for Lamberth to pay out the $612 million plus interest (which he probably can't do before a capital raise).

Lamberth's silence would thus be deceptive because it could be accompanied by frantic backroom activity. That's where the negotiations are taking place between the government, the subscribers to the new shares (e.g., sovereign wealth funds from the Middle East, hat tip to Mnuchin), and the JPS holders for the distribution of the pie. Today's sharp drop in commons may foreshadow expectations of heavy dilution. JPS, on the other hand, are up in price today.

All pure speculation, but I still think it's worth mentioning.

For Biden, the clock is ticking. If he wants to spend the up to $100 billion from R/R before Nov. 2024, he must take action now.

Commons down 5 and 6%, what a day! I know, must be more of that MM manipulation...