Replies to post #510626 on Fannie Mae-No Politics (FNMA)

[Stockman1010101]

By my calculation. I expect some Calabria confirmation news today or this week or the next I would not bet the farm that It won't happen. So get off the fence and buy at these discounted prices.

[kthomp19]

If the administration is so inclined, and the court opens the door, they can ensure the GSE's remain private, and are instantly capitalized.

Yes, but it would logically conflict with basically every decision they have made so far. Unwinding the whole SPSPA involves Treasury sending back around $100B (the difference between the total draws and total dividends), and losing both the seniors and the warrants for nothing.

Mnuchin's Treasury insisted on a $6B increase in liquidation preference as recompense for letting FnF keep $3B in net worth each (December 2017 letter agreement). They are also still vigorously defending the NWS in court. On top of that, they could have "instantly capitalized" FnF at any point by just sending them a giant check and cancelling the NWS. None of these conform with them invoking section 6.12 of the SPSPAs.

I agree with Yank: that section isn't going to matter because Treasury will never use it. It makes no sense for them to do so.