Replies to post #606993 on Fannie Mae-No Politics (FNMA)

[Potty]

...or working on JPS conversion...

[contrarian bull]

The writedowns are better than retained_earnings!

With retained earnings their capitalization goes up, but F&F have to increase liquidation preference by an equal amount.

With a writedown they also get to increase capitalization by retaining earnings, but they do not need to increase the senior liquidation preference. WIN!

Yikes! So much for a retained earnings Recap

Let's hope they're hard at work preparing to issue new GSE Common stock. Otherwise, it'll be another decade before the GSEs are recapped