Fannie Mae-No Politics (FNMA)

[Ace Trader]

HOLD YOUR HORSES !

Quote:
25% that only the $193B worth of balance sheet SPS is written down and the rest is converted.

That latter scenario exists because a conversion of the balance sheet SPS involves moving that amount into the common stock line rather than retained earnings. Both common stock and retained earnings count towards all forms of regulatory capital so that's not an issue.

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You could be onto something there! For saving face from voters AKA tax payers and saving some sort of face from Shareholders converting the amount needed to repay the 193 billion with the SPSA. Converting enough to payout all JPS from the SPSA leaving the 2 companies with no debt on the books and holding there retained earnings so far. Then Gov to convert the rest of the SPSA and auction off those to raise money for the Gov ???

Warrants are warrants stated in the agreement that they were merely there to recoup there investment, Warrants are not worth $193 billion

Lastly, we must take a look at what does the Gov want to avoid ?

1, Gov will want to walk away looking good to tax payers!
2, While making billions of cash.
3, It will want to Pay off the GSE debt!
4, It will want to establish a yearly commitment fee to fund the FHFA