Replies to post #674313 on Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

JUSTICE KAGAN: Does that mean,
Mr. Thompson, that we have to do a great deal
more than invalidate the -- the -- the Third
Amendment and everything that follows from it?
I mean, why shouldn't we go back to the -- the
-- the -- the -- the First or the Second?
MR. THOMPSON: Well, Your Honor, we
focused on the Third Amendment because that's
the -- the feature of this that rearranged the
capital structure, but, as we made clear to the Fifth Circuit Court of Appeals, we are perfectly
content with all of these arrangements, which,
as we say in the complaint, were a concrete
life-preserver. It's like getting a credit card
with a double-digit interest rate that you can't
repay the debt on. It's not debt, but you can't
pay the money back, and so --
JUSTICE KAGAN: Thank you,
Mr. Thompson.
MR. THOMPSON: -- we would be
perfectly content with it being thrown out.
CHIEF JUSTICE ROBERTS: Justice
Gorsuch.

[Donotunderstand]

Thank you - indirectly

I have asked - several times - of those who better understand the math - what was the NET added cost to FNMA of the NWS v 10%

30B seems right

and I do think a positive Scotus decision is not yet built into the price of FNM ... I would think we would hit 4 or so and sit around waiting to see what is next (as JPS move to say 60% of PAR)

[RumplePigSkin]

Luvan - the full unwinding of the NWS is in play. What happens if the NWS was never implemented? Would ~$300 billion have been paid to the gov? Would the total have been $124 billion overpayment with no ability to pay down the liquidation preference?

Thompson is playing the remedy game. The bare minimum he is asking for is the LP written to 0 and overpayment through payments until 2020 be repaid. Several times Thompson states Collins is fine with “any” additional remedy the court deems necessary. The most recent rebuttal to the DOJ letter supports that fact.

Gorsuch referenced the high number the court was having trouble understanding and coming to terms with. ACB asked point blank are you asking for a check returning the billions. Thompson said no because he knows the astronomical numbers could “shock” the justices.

But the key is as the justices circle around this topic, and the opportunity Thompson got via the DOJ letter to drive home the point that 3rd party capital raises would be unnecessary if it weren’t for the NWS, there is a scenario with a solid probability that cannot be dismissed out of hand that returns the bulk of the NWS payments.