Fannie Mae-No Politics (FNMA)

[NeoSunTzu]

There needs to be a more coordinated social media effort - especially on X - for a better, more coherent, and truthful accounting of the numbers before any "IPO-like" calculations are done. I picked your post for the nice easy numbers you used, but it is more of a general reply for all.

The government does not currently own any shares! To get to the roughly nice even number used here, 4 billion shares, the government would have to exercise the warrants which should NEVER be allowed to happen in total given this actual and true accounting as follows:

However the government wants to classify their "aid" to the FnF (line of credit, loan, senior preferred shares, commitment etc.) that amount is listed as a matter of record in the latest legal case (Fisher v USA) as originally a $100B, later doubled to a $200 B commitment of which the entreprises only drew $187.5B. The enterprises repaid $301B. The U.S. Treasury also received more than $100B from TBTF banks (this a rough number but on the low side). Fannie Mae has current retained capital of $101B and Freddie Mac has current retained capital of $62B - but the government does NOT recognize this retained capital as belonging to the companies NOR shareholders but still owed on the original commitment.

In total ($301B + $100B + $101B + $62B) Treasury is claiming to have the rights to this $563B !!!! Without a cent financially legally counting towards "recapitalization" of the firms. There should be absolutely no conversation about executing the warrants!!

Next, and thinking about this separately, for now, as of Oct. 2024 the government claims they are owed a liquidation preference of $340B which I believe is supposed to represent the entirety of their claims, but if we allowed that for the moment to be legitimate and it was paid back, FnF would still need to raise capital to meet the minimum Tier 1 captial requirement. Now, the Tier 1 capital requirement (forget the actual percentage for now) IS A LEGITIMATE banking capital need; HOWEVER, what is NOT legitimate is to say FnF has NO Tier 1 captial. RETAINED EARNINGS IS Tier 1 Capital, and at a MINIMUM the enterprises currently have $163B in retained earnings. Capital they legitimately earned from normal business operation - that the government claims is still owed because of the liquiation preference. This is criminal financial theft under the guise of government fiat and faux accounting.

The NWS collected $301B, which is $113B OVER the $187.5B in draws - so in effect FnF, before the current $163B in retained earnings, had what what should be counted as $113B in retained earnings after paying Treasury back the $187.5 B.

Furthermore, the 8-0 Lamberth Jury verdict and awarded damages is TOTALLY based on the wrong measure!!! The difference in the stock prices over the time period due to the agreement that constitutes a breach is NOT what should be considered. What that breach allowed the government to do was strip, through the NWS, ALL OF THE RETAINED EARNINGS that would have led to the entities being on thier way to FULL CAPITALIZATION and RELEASE!! That full capitalization and release would have taken the stock prices back to pre-crisis levels. The legitimate penalties for such action would be not in the hundreds of millions, but hundreds of BILLIONS and should be assessed to Treasury for arm-twisting the agreement, NOT FHFA (though they are complicit), but CERTAINLY NOT FnF!!!

Concluding, Treasury has already received over $400B from FnF, plus TBTF banks directly related to FnF commitments and bad TBTF MBS foisted on FnF. That is TWO HUNDRED AND TWELVE AND A HALF BILLION ($212.5B) OVER the $187.5B FnF draws. The government has already earned well-beyond anyone's wildest expectations for the American Taxpayer! Since the entities currently have $163B in retained earnings THERE SHOULD BE NO NEED FOR ANY WARRANT EXECUTION! Additionally, with a proper FnF business-risk adjusted reassessment of the Tier 1 regulatory capital percentage there may not even be ANY need to raise new capital.

If there is a shortfall, the government should use this upcoming capital raise as a secondary offering to fill that gap, declare victory through the above numbers, and depart that gahdam field. I am NOT totally opposed to some de minimis offering of shares (a little grease for Wall Street and the government - listing and secondary offering fees, etc.), but ANYTHING else is egregious theft! These numbers should become widespread and well-known to all involved, especially the financial media which seems so hell bent on enriching the government at the expense of upholding shareholder rights, conservatorship law, and everything else that matters in truth and fair dealing. The moral hazard risk, normally reserved for attacking owners and shareholders, clearly applies to the government interlopers at this point; Trump, Bessent, and Pulte should do EVERYTHING in their power to end this properly!