Replies to post #496628 on Fannie Mae-No Politics (FNMA)

[kthomp19]

This is exactly why I stay in the prefs and away from the commons. $144B to $194B is a ton of capital to build, and I believe that FHFA and Treasury (and the administration) have a pretty big incentive to do it by the end of 2020 instead of drawing it out.

Pros of a fast recap: gets the taxpayer off the hook sooner (they won't be truly off the hook until the companies are fully recapped), allows for a no-worries release before Trump potentially gets voted out, makes it harder for Congress to undermine the administration's efforts (both because they would be safe and sound sooner, and Congress would have less time to act)

Pros of a slow recap: uhhh, keeps the common share price high?

Guess which of those I think vastly outweighs the other? And remember, if Treasury sells the warrants for a fixed amount of cash (rather than exercising them), they lose their incentive to keep the common share price up and the "pros of a slow recap" list becomes empty.