Monday, January 20, 2014

the right way to fix fannie mae

the right way to fix fannie mae

release from consevatorship, issue 1 billion new shares. take new capital and save it for rainy day. that would put fannie at 175 a share and 175 bil in cash for the rainy day. fixed in one day. simple as that. remove govt backstop or enact it only after 175 bil is used. safety net. fannie only needed 80 b this time around. the WORST ever since depression. It cant be worse and we would have 2x backstop ready. simple really.

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