Replies to post #224220 on Fannie Mae-No Politics (FNMA)

[big-yank]

From my perspective, I think the warrants were appropriate and were entirely consistent with treatment of some other bailout recipients like AIG. We can all argue over how solvent or insolvent FnF might have been, but nobody refutes the conundrum that Paulsen and later Geithner, and Bush and later Obama faced in dealing with both the housing bubble bursting, the banking crisis and the recession and unemployment. My guess is that historians will look back on this period of high risk and depression-like outcome possibilities, and then conclude that any over-reach should be viewed as preferable to alternative under-reach, measured against the catastrophic outcomes that might might-have-been.

I have stated dozens of times that enacting both the warrants and the sweep provision in Amendment 3 strike me as overkill as tandem impositions on shareholders. I'll let the courts sort that one out because the solution is neither likely to be easy, a straight line or an all-or-nothing grab for the brass ring on the merry-go-round.