Replies to post #436648 on Fannie Mae-No Politics (FNMA)

[Guido2]

If you agree that NWS should be gone and senior preferred declared paid off, why do we need Moelis?
Moelis values FnF at $16 Billion To $26 Billion. Since 2013, FnF have paid more than this in 'dividends' annually.
By limiting us to 200% to 300% profit, Moelis would ensure it's employers earn a minimum of 2,500% profit.

[bcde]

Under Moelis plan, it requires $487.5B to be raised from markets.
Where are you getting this number? The end of page iii in the Moelis plan says:

Please read under scenario - "without revoking NWS retroactively".
$187.5 to redeem outstanding SPS
$200.0 for FnF regulatory core capital
$100.0 for 80% warrants converted in common shares that need to be sold in the markets. Otherwise TSy has to hold the shares.

Under scenario "with revoking NWS retroactively", it is all very simple and without raising a penny from markets. Basically it restores FnF to reformed but with original shareholder capital structure. You do not need Moelis plan for this.

Why would investors invest $487.5B fresh capital in companies managed by fraudulent FHFA conservatoship?
The conservatorship has to end for our shares (junior prefs and common) to have value so in that case your point is moot. Whether the conservatorship is (will have been) "fraudulent" doesn't matter one bit at that point.

You do not seem understand how big institutional investors invest. This big money can only come from big institutional investors. They owe fiduciary duties to their investors. The main things that guide investment are trust, respect for rule of law, political risks, and history.

In 2007-2008 investors were duped to the extent of $20B with official assurances that FnF were safe and sound then imposing conservatorship and confiscating that $20B plus all the capital with NWS. In case of Moelis plan who will assure that same thing will not happen and how can you trust it.

What about respect for rule of law and political risks?

Can any one predict what will happen during next housing down turn?

Judiciary has turned out to be most unreliable factor in this, in
addition to other two political branches.