Fannie Mae-No Politics (FNMA)

[kthomp19]

Likewise, giving away hundreds of billions more in equity at a point where the GSEs are profitable every quarter would need to be supported in the context of the mission of the FHFA.

These "hundreds of billions in equity" already belong to Treasury. The liquidation preference of the seniors far exceeds FnF's balance sheet net worth. There is no equity for FHFA to give away to Treasury at this point because Treasury already has it all.

In addition, converting the seniors to commons adds $193B to all forms of regulatory capital. Increasing FnF's regulatory capital is absolutely in alignment with FHFA's mission.

The mission is NOT to funnel money to Treasury, not the taxpayers, not even the shareholders.

And yet the Supreme Court still said it was okay.

It's a stretch to say the best interest is to simply throw a ton of money at Treasury for nothing in return.

And yet the Supreme Court still said it was okay.

The jury saw this and made the correct call.

Shareholders won the battle ($800M) but lost the war ($300B).