Replies to post #756450 on Fannie Mae-No Politics (FNMA)

[imbellish]

He ran the General Ledger for the company in 2006-2012 so it's certain he doesn't understand the capital structure, Glen.

[Wise Man]

Bradford is the one that doesn't understand capital structure, where hierarchy is related to the preference in the distribution of dividends and distribution of money upon liquidation of FnF, according to the specifications of the noncumulative dividend Junior Preferred Stock contract with FnF.
He doesn't understand why they are recorded in regulatory capital (or statutory), which is due to their loss-absorbing capacity, unlike the cumulative dividend SPS. That is, a loss when the dividend is suspended for capital adequacy purposes, which is what has happened.
Now, the capital requirements are well above the ones in 2008.
Regulatory Risk.
Everything recorded in Core Capital has loss-absorbing capacity. Also their Allowance for Loan Losses (a Loan Loss Reserve), recorded in Tier 2 capital for the Total Capital that has to meet the Risk-Based Capital requirement.
The financial concepts aren't up for debate.