Replies to post #764615 on Fannie Mae-No Politics (FNMA)

[Robert from yahoo bd]

I suspect what happened with the "Financial Advisors" that FHFA, Fannie Mae and Freddie Mac hired and paid millions for told them that the unprecedented August 17, 2012, Net Worth Swipe destroyed any confidence that Private Capital may have had toward entering into a long term Public Mission backed by Private Capital in a 1st Loss Position Partnership with the FHFA, the US Treasury, Fannie Mae and Freddie Mac.

Having DOJ and FHFA (at Fannie Mae's and Freddie Mac's expense) continuing their recalcitrant attitude and facade behind the Net Worth Swipe is also likely destroying future investor attitudes toward shelling out Private Capital.

Did I mention the way DeMarco demanded Fannie Mae and Freddie Mac float $20B in high coupon JPS Private Capital in 2007 and in 2012, decide to wind down the GSE'S when they were on the verge of World Record Profitability?

"Salting the Earth with the Shareholders Carcasses" is not a winning tag line in raising Private Capital.

Although its par for the course in Venezuela and other Banana Republic's.

[kthomp19]

It's utterly predictable that you would pick out the dumbest part of that comment to repeat.

The only difference between Treasury writing off the seniors and converting them to commons is where the $193B worth of seniors goes to on the balance sheet. In a writeoff it goes to retained earnings, in a conversion it goes to additional paid-in capital.

New investors will care about one thing and one thing only: how much money can they make? Acting like they will care about which balance sheet entry holds that $193B is just plain wishful thinking, like his Dear Santa letter from earlier this year.

Something else Fisher missed: if Treasury writes off the balance sheet portion of the seniors ($193B) but converts the rest ($100B) to commons, legacy common holders will still be diluted to almost nothing but the huge retained earnings deficit will disappear.