Replies to post #355475 on Fannie Mae-No Politics (FNMA)

[mhill_fin]

Very nice brandemarcus. Keep these notes handy. You'll be asked to repeat them.

The other side just can't see over the wall of BS that they have built up and cannot retain any facts that don't fit into their wall.

[big-yank]

WAAAAY too much content to reply to in a single message. But a few brief thoughts to alternatively consider.

- 10% on $187 B = $18.7 B per year, either to be paid or added to liq. pref. History says this is unlikely.

- No one knew with any certainty any crisis outcome or timeline. Without QE that came later, the meltdown could/would have continued. And nobody predicted that The Fed would drop interest rates to near zero.

- There was huge chatter among economists on a double dip. Ireland, Greece and other global players were in a huge crisis. Sovereign debt became a crisis for all issuers. Guess which country has the most. LOL.

- The GSEs one huge income year in 2013 was reclassified DTAs, only.

The auditor suits are garbage and, like all trash, will just get thrown out soon.

JMHO.

[big-yank]

A follow up, brandy, on loss reserves and auditors, since so much of the content in your post concerns this issue. The auditors have nothing to do with the appropriateness of reserve amounts. That is the sole responsibility of the Director of FHFA under the statutory requirements of HERA.

https://www.govtrack.us/congress/bills/110/hr3221/text

Please refer to Sec. 1111 and the concluding statements therein that expressly empower the Director to establish additional capital or reserve requirements" necessary to operate the entities in a safe and prudent way.

That is what the law says. So any pundit or plaintiff can critique the reserves, all they want, but such actions are within the law and there is nothing in HERA that requires any specific metric to be used by the Director. Just his judgement, as I read HERA.

JMHO.