fanniequestions

As of now, a new president may be able to replace Calabria. It’s strange to me that the director is silent on senior preferred warrants because although it’s Treasuries’, it’s still a huge factor on the marketability of the GSEs in the secondary market. Is it because Mnuchin/Calabria are holding $20b+ as leverage in case Trump does not win. If Calabria is en route to be fired, then they cancel the warrants and bye bye $, which would expedite capital raise, and recap anyways...or they can cooperate and exercise the warrants and be a large help in contributing to fund socialist promises. This way Calabria can finish his job regardless. Am I even making sense? Thoughts?

I kind of see the angle there are taking but this guy has been wrong all along from start to finish on Fannie. I think the receivership option discussion was a show for the idiots at the hearing. When listening to the context of the discussion it was in response to questions that question whether some people (hedge funds) were to stand to make a windfall in privatization. Mnuchin even walks back from receivership as an option towards the end. I'm curious why any attention is still on the 10/22 mandatory hearing when the 10/23 interview Calabria chose to be on resulted in: 1) 19:45 minutes: CALABRIA CLARIFIES THAT HIS COMMENT TO WIPING OUT SHAREHOLDERS IS ONLY WHEN A COMPANY BECOMES INSOLVENT. THIS IS THE LAW. 2) 24:30 minutes: CALABRIA SAID FANNIE WAS INSOLVENT IN 2008-2012. FANNIE IS HUGELY PROFITABLE NOW. 3) 27 minutes: THE LAW SAYS THERE ARE ONLY TWO CHOICES...FIX AND REALEASE OR RECEIVERSHIP. SINCE RECEIVERSHIP CANNOT HAPPEN DUE TO POINTS 1 & 2, THE ONLY OPTION IS FIX AND RELEASE. refer to

Thanks for that information...given 1) no receivership and 2) no elimination of senior preferable shares...do we know what will happen to the governments 80% interest right now or is that part of what is being drafted? Thanks allnatural...trying to make sense of this since you have a deeper understanding of the arrangements and past TARP comparisons. Can you clarify what it means and how the government will monetize its 80% warrants? And what it means to common and preferred if you know that answer as well? Thanks!

Thanks for that information...given 1) no receivership and 2) no elimination of senior preferable shares...do we know what will happen to the governments 80% interest right now or is that part of what is being drafted?

cherzeca much appreciated...makes sense. Another question...given that treasury doesn’t care about senior preferred IPO price since it has been repaid, I assume that similarly to AIG, the government came in at $30ish per share in 2008 and then released par value at $30ish per share. Do we see a similar outcome here? What price and date are we talking about September 6, 2008? My charts show me $7 on Sept 1 and $0.75 on Sept 8...can’t see Sept 6. Let’s say it IPOs lower than current value, do we see somebody (Buffet?) waiting on the sidelines to pick them all up? Thanks again! if I understand your question, the only way there is a re-ipo is if the senior prefs are eliminated. I apologize if the wording I am using is inaccurate...I am attempting to say “recap and release” but assumed that IPO of the senior preferred was one of the options at this juncture, and I understand the rules are still being finalized.

cherzeca much appreciated...makes sense. Another question...given that treasury doesn’t care about senior preferred IPO price since it has been repaid, I assume that similarly to AIG, the government came in at $30ish per share in 2008 and then released par value at $30ish per share. Do we see a similar outcome here? What price and date are we talking about September 6, 2008? My charts show me $7 on Sept 1 and $0.75 on Sept 8...can’t see Sept 6. Let’s say it IPOs lower than current value, do we see somebody (Buffet?) waiting on the sidelines to pick them all up? Thanks again!

Hi All, New member here and very long on FNMA...few questions on yesterday’s comment: 1. Other than bankruptcies, I have not found a single example of shareholders being wiped out, have any of yiu? 2. Theoretically, if a shareholder wipe out happens, are Senior preferred wiped out as well? I’m under the impression that the gov doesn’t want to be wiped out and would want to profit from whatever the outcome of releasing their shares is. On the other hand, if their senior preferred converts to common shares then aren’t they essentially stuck with same problem they have now of how to get them to private hands? This puzzles me. 3. It appears that many of the hedge funds hold junior preferred FMAT. There are conflicting opinions or favorable and unfavorable outcomes if FMAT is converted into common shares. My question is that FNMA common stock dropped from $3.50 yesterday to $3.00 today and probably will have 30 million in volume today and FNMAT is essentially stagnant. Panic and market manipulation in common stock while hedge funds don’t move a muscle on their junior preferred...thoughts? 4. FHFA stated Fannie has $6.4 billion in capital now...is this the same thing as the buffet. That would be a 100% increase since the September 30 announcement that the buffer would be increased from $3 billion to $25 billion. It kind of makes sense given the 5x demand on MBS products from banks such as JP Morgan struggling for profits in a low interest environment. My question is if the capital and buffer meaning is the same... Thank you all so much for your answers and comments!