Replies to post #796164 on Fannie Mae-No Politics (FNMA)

[The Man With No Name]

He's right

[Wise Man]

The Net Worth isn't capital to absorb losses.
Net Worth or Equity isn't a line item or account that you can debit losses from. It's an aggregated amount of its components. A sum.
Only the Retained Earnings account absorbs the future losses that will come from the quarterly Income Statement, currently an adjusted $-216B combined.
Capital Stock, which is what FnF are building in their Equity or Net Worth with the SPS, just offsets a reduction or Accumulated Deficit Retained Earnings account, in order to prevent the Net Worth from turning negative.
Calabria:

its net worth, or capital, to absorb losses from those mortgages stands at just over $50 billion.

We see in the Balance Sheet that the Retained Earnings stands at $-32B.
It needs to be adjusted for the offset (reduction of Retained Earnings account) corresponding to the $50B worth of SPS LP increased for free since December 2017, in an amount equal to the NW increase, both operations absent from the Balance Sheets but we can see it in this adjusted table for the first quarter.


Then, its adjusted Retained Earnings account stands at $-83B
How on earth will it absorb future losses with a negative balance?


The fact that FnF post $0 EPS every quarter is evidence of this Common Equity Sweep (Retained Earnings account Sweep), because the Net Income Attributable to the Common Shareholders that is what later is posted on the Balance Sheets, in the Retained Earnings accounts (before the dividend payments if any) is $0.

[stockanalyze]

catman was going to release gse's? lol. he was never going to do it. he is the architect of hera and worked with corker.
"..would also intentionally put the taxpayer and countless families at considerable risk"
"....and does not have the capital on its books"