Replies to post #757079 on Fannie Mae-No Politics (FNMA)

[DCBill]

Don't assume that anyone in Congress (Banking Committees or others) knows or understands that principle.

Few know what the GSEs do and how they do it!

[kthomp19]

Howard is on the record that he doesn't believe in the common cramdown.

Yes, but he is also on the record as clearly misunderstanding the capital treatment of said cramdown. He thinks it would be different than writedown, but in fact they are both the same. Both a cramdown and writedown add $193B to all forms of regulatory capital (core, Tier 1, CET1).

The common cramdown is just as problematic as the conservatorship itself because the whole thing is a roadmap for future nationalizations of systemically important financial systems.

Any nationalization of FnF has already happened regardless of what Treasury does with its senior prefs. The conservatorships and NWS already provide the blueprint.

Hope the GSE haters are learning the lesson that if you compromise your principles for expediency then you become the compromised one next.

Agreed.