Replies to post #771724 on Fannie Mae-No Politics (FNMA)

[LuLeVan]

a conversion of SPS for Commons, which doesn't add to CET1, only the cancellation of SPS

Wrong. Conversion of the SPS has the same effect as cancellation of the SPS. In both cases $193 billion would be added to CET1, and to Tier 1 (and all other classes) as well.

What counts for recap/release is CET1. CET1 is at the bottom of the capital structure.

[LuLeVan]

Your premise contending that the government is filled with criminals is wrong

It is certainly a gross exaggeration to put it that way. But you won't deny that DeMarco teetered on the edge of criminality with the NWS (theft of shareholder assets), even if his actions are not formally legally actionable. After all, a jury of eight unanimously concluded that the law (contracts) had been broken. Is this criminal? At the very least, it is a civil offense - but one that could have further legal (and political) implications for the remaining lawsuits.

[bradford86]

The first sounds theyll hear is their heads hitting the floor

Surely not criminal mentality… wrong

[Wise Man]

CORRECTION: A conversion Preferreds to Commons has the same effect on CET1 as the cancellation.
Previously I said that only with the cancellation.
It's a debenture (obligations) that disappears. So, FnF post a profit.
Anyway, it will never happen under the Separate Account plan in accordance with the law.