Replies to post #671417 on Fannie Mae-No Politics (FNMA)

[Donotunderstand]

interesting

logical

but much and most is opinion

[EternalPatience]

How do you remember the various different userids and passwords??

Password managers?

[chessmaster315]

You posted (worst case senario):

Without a capital raise there is not enough equity to exit conservatorship, unless you wait for at least another 10+ years (slow recap).

Correct, "but only if" Scotus sticks it to shareholders, and this is not a given!!!!!

Instead, many legal analystis with legal experience, such as Tim Pagliara, (attorney) thinks that the government will lose scotus.

The only "real" way to recap FNMA is a win, and the government forced to return the stolen money.

Without this, there is no reason to own these shares. If our government can come in and rob shareholders in fnma, then they can rob Apple shareholders, Microsoft Shareholders, Tesla shareholders and every other American company.

"All" our shares are worthless if the government can rob us, at will. Apple: Worthless if government robs their profits. Microsoft: Ditto.

This isnt "just" about fnma shareholders. Global investors are watching this.

If Fannie falls, America falls. Fannie and Freddie represent
more than 7 trillion dollars.

Some years ago, the US government rescued Chrysler, as many jobs would be lost if this company failed. FCA (Chrysler) is about 16 billion, compared to over 7000 billion for FAnnie and freddie.

Fannie and Freddie control more than many states and many countries, too, have an operating budget less than the GSE twins.

FNMA enterprise value: 3.8 trillion (3800 Billion) source:
https://fintel.io/sm/us/fnma. FMCC is slighly smaller.

If our government could have "bled us out" to death, they would have already done so. They can not, and Ameica still survive.
The twins own HALF the mortgages in America.

This is many, many times larger than the largest TBTF banks.

[chessmaster315]

Your hypothesis have already been refuted, but, since you are new, you are unaware:

You posted:

The problems with your arguments are:

- Without a capital raise there is not enough equity to exit conservatorship, unless you wait for at least another 10+ years (slow recap).

- Government wants a faster recap because the next housing crisis due to Covid is looming. Government needs a fresh layer of private capital as a buffer asap. The $45 billion equity currently at hand might get lost quite fast.

- To entice new investors to sign the NEW commons (fast recap), they must be offered a decent or even huge share of the companies. This necessarily requires to dilute the old commons.

Your first hypothesis is "Shareholders will get "nothing" at the Supreme Court, and the government will be permitted to violate the US Constitution's "takings" clause is refuted by our attorney Mr. Thompson, at Cooper and KIRK.
He explains the government will "likely loose" unless they settle.

If "shareholders are not redeemed by Scotus", there is no reason to invest in the GSE twins: If the government is permitted to continue confiscation of 100 percent of the net worth the shares are worth zero, as they will have no earnings.

Thus, your entire premise is refuted, because its all "contingent" upon a LOSS at Scotus. "If" shareholders lose at Scotus, and our government is permitted to continue to rob Fannie and Freddie shareholders "at will" as you suggest, then what is to stop the government from robbing other shareholders? GM, Microsoft, Apple, Tesla and every other American company. Thus all should go to zero, as absent both any earnings, nor possible future gains, the entire economy falls flat.

Additionally your "new investors" hypothesis has likewise been refuted, because investors are "not" chickens. Chickens wait in a line to be butchered and turned into KFC.

However, humans "hear the screams of other investors" being butchered, and are smarter than chickens and "exit" the line to buy so called additional fannie or freddie shares. Why would anyone want to buy more shares if the last shareholders were robbed blind?
"New investors" (especially hundreds of billions of dollars needed for a capital raise if government theft is permitted by scotus) will "run" from this investment like they were being chased by a very angry mother bear who thinks you just stole her cubs.

Its referred to as a "Zimbabwe discount"...explaining that 3rd world country governments, simply confiscate private property when they need money. Thus, no investors will touch these exceptionally risky companies because no one wants to buy shares when a government can just take the property "at will".

Thus, If I wanted to raise funds for a Zimbabwe country company, the return to investors would need to be hundreds of percent per year, because its an incredible risk that investors have no control over.

You want to turn USA into Zimbabwe, and assume we are a third world country which permits private property taking and has no US constitution , which every politician swears to uphold, and Scotus enforces and interprets the US constitution.

Your hypothesis assumes every American who gave his life serving our country and defended our constitution died in vain.