I not an expert on these matters but believe I have heard in the past many times just this explanation. I believe it is true but with that said to say that it's not on the books of the government is just, well lets just say you can't separate the twins from the treasury without killing the host. Say what you want but it will not make a difference in the outcome. Just saying.
that's not how it works in the bond world - if you own 50.1% in the first loss position in a remic trust you have to consolidate the entirety of the trust onto your balance sheet. I would be surprised if that was indeed the case as owning 95% of any equity position is far more than substantial but the accounting rules are so stupid that it might be right and 79.9% had to be picked for some reason.
I maintain that the warrants were ONLY to be exercised given certain conditions ...those conditions will never be met--thus IMHO the warrants are not exercisable
I believe that the Congressional Budget Office concluded that both Fannie and Freddie were to be considered 100% government agencies after Amendment 3 required 100% of their profits to be swept to government. By recollection that decision was not based on warrants, alone.
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