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RickNagra

07/11/18 8:48 AM

#465885 RE: navycmdr #465856

Great article Navy. Lots of important information. For example recapitalization will involve retained earnings plus private capital plus a secondary shelf offering. That is a given and now we have someone confirming this for us. Also Congress instructs FHFA and Treasury to come up with a recapitalization plan and if it sounds good then Congress simply blesses the plan. All good. However article states recapitalization requires $150-200B for each GSE. Say what ? I thought this was the total amount for both.
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bcde

07/11/18 11:55 AM

#465905 RE: navycmdr #465856

The question now is, do you complete the job? You would complete the job by creating a plan to recapitalize them, and then figuring out how they would be released. To me, in an ideal world, they come up with a recapitalization plan. Congress looks at it, and says, "We are going to bless this," and actually votes on it. That would be the perfect world. I do think it is possible
- article's ending conclusion

It is totally meaningless to seek approval of congress for FnF recapitalization plan. It is the job of regulators like fhfa, tsy, fed, hud, sec...

The job of the congress is to make laws not regulate at operational level.
Regulators should define capital requirements balancing risk against public policy mandates imposed on fnf. It requires continuous monitoring and rebalancing the risks from time to time. It is not one time effort.