Fannie Mae-No Politics (FNMA)

[kthomp19]

It's not their "entire net worth" - they still keep the capital buffers and all that.

That's a pretty enormous difference. The ability to capitalize is what the companies got in exchange for the LP ratchet.

If it walks like a duck, sounds like a duck, and poops all over the shareholders sidewalks like a duck....break out the brooms, it's a sweep!

But it doesn't spray poop on the companies' sidewalks at the same time the way the original NWS did. That's the fundamental difference between the original NWS and the LP ratchet: the former was horrible for both the companies and shareholders, while the latter is neutral to the companies (what need do they have for capital beyond the regulatory requirements?) while still being horrible for shareholders.

That's why I don't think any derivative suit regarding the LP ratchet has any chance of success.