Replies to post #638507 on Fannie Mae-No Politics (FNMA)

[kthomp19]

When you look at the whole, the clear implication is the only definitive statement is that he EXPECTED the GSE"s to be released by the end of his term in 2024. And even with that, he included HOPED FOR in his statement.

Nope. You said "the only real timetable Calabria has ever put forth was that he hoped and expected to have the process complete by the end of his term in 2024", which is a false statement because the very article you linked to included other timetables. 2024 isn't nearly the only one Calabria has given.

As for my statement about conversion to commons, I again am only repeating that Calabria has only once mentioned that they would look at the possibility of conversion to commons many moons ago. And nothing since.

1) You said what you did about Calabria's comments as an answer to my question of why there wouldn't be a conversion. You were clearly trying to downplay and disqualify Calabria's comment by saying that it was only once, in passing, and "many moons ago". Otherwise your "answer" wouldn't have been an answer at all but instead a non sequitur.
2) Mnuchin mentioned a junior-to-common conversion as a possibility in Treasury's housing finance reform plan, and Fannie included that in its 2019 10-K filing. As conservator, Calabria has approval power over every word in every filing FnF make. Thus that inclusion counts as Calabria mentioning it again and your "nothing since" assertion is false.

That is hardly a ringing endorsement for that possibility, after all of this time.

Just an opinion, and this again shows that you are trying to disqualify Calabria's comment. Three mentions in 9 months is rather a lot in my opinion.

Also, you haven't yet addressed the fact that Calabria's capital rule doesn't leave room to issue any new prefs if the juniors are not offered a conversion. While a conversion would be dilutive to the existing commons, so will offering an extra $33B worth of common shares to meet the same (CET1) capital standard. Avoiding a junior-to-common conversion is not some magic bullet that makes the commons more valuable.