Fannie Mae-No Politics (FNMA)

[Wise Man]

If the slogan: "Capital Reserve is what meets the Capital requirements" began with Calabria and Mnuchin in the January 14th, 2021 6th PA amendment: "Capital Reserve End Date", one month before the Capital Rule (ERCF) came into effect on February 16th, 2021 (anyway, the capital shortfall over Min Capital requirement has been posted every quarter since day one, with the old 0.45% of MBS Trusts, because it's statutory), the other slogan: "Net Worth is what meets the Capital requirements", for instance, the former FMCC CEO, Layton, in an article last week, was initiated by Sandra Thompson, pointing out in the FHFA 2021 Report to Congress published in mid 2022, that the Net Worth or Equity is the Capital Reserve.

Capital Reserve is the amount of Net Worth above the Capital Stock. An invalid capital metric in the FHEFSSA.
Nowadays both amounts coincide ($125B) thanks to the Financial Statement fraud in FnF (SPS LP increased for free and its offset, are absent from the Balance Sheet).
It doesn't mean that the Net Worth or Equity is a capital reserve.


Without this fraud, the $125B worth of Net Worth is comprised of SPS and the Capital Reserve is, thus, $0.

We can also read the slogan nowadays peddled by Ackman and his clerk, Bradford: "FnF continue to build capital through Retained Earnings".
The column Capital Shortfall was removed from the ERCF table and the Critical Capital level is missing, commented yesterday. Both bother for their slogans that end up with "FnF have been rehabilitated" and "Why are they still in Conservatorship?".


Notice that the Goldman Sachs alumni Sandra Thompson arrived at the FHFA in March 2013 as Deputy Director in charge of Capital Adequacy matters, financial analysis, ...