Great article... at least someone wrote about the issue of increased liquidation preference. Treasury likely looking to negotiate this 2nd tranche separately in case they have to cancel the SPSA. The amount covers the prior over payment which would have to be paid back essentially. Now they owe shareholders nothing and own warrants. Thoughts Navy?
sweep is still not eliminated? wtf ! what are they doing with our tax monies? GSE does not owe treasury any more money.
"...... Essentially, instead of eliminating the net worth sweep, the Treasury Department and the FHFA have agreed to change how the sweep is handled in the GSEs’ books.
It has widely been expected that the net worth sweep would be eliminated soon, but that isn't actually the case, based on the Treasury and FHFA's agreement. According to Bove, the accounting changes the two agencies agreed to will make it look like Fannie's and Freddie's net worth has increased even though it hasn't actually done so in real terms...."
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