Uh Lads…. I think FHFA just flipped the script on the "China Virus".
Out of the blue, Fannie Mae FNMA shows up with 88 billion in cash or cash equivalents on their 10Q.
Where did it come from?
One current theory is that they sold bonds to cover for forbearance from the China Virus.
If so, and the downturn does not last, they will be recapitalized…. BOOM!
Turning Lemons into Lemonade? Pic is pinned tweet from his account. Related?
Backstory:
Remember the '08 Housing crash?
Supposedly the Mortgage GSE'S (Government sponsored enterprises) that are entity established to enhance the flow of credit to specific sectors of the American economy, in this case the mortgage industry, FNMA (Fannie Mae) and FMCC (Freddie Mac) became insolvent in the crash.
There's plenty of controversy surrounding that declaration by the Bush Administration and funny accounting has been the substance of numerous law suits.
But either way, what happened illegally or not (though it was obviously illegal to anyone with half a brain), was that the companies were nationalized.
So they've been under the conservatorship of the FHFA. Under FHFA, the funny accounting was reversed and the entities became hugely profitable. So during Obama administration, they pulled the cash out and spent it.
The Secretary of Treasury Mnuchin stated once during an interview, it was used to fund Obamacare. Rather that can be proven, I don't know.
But under Trump administration, POTUS placed Dr. Mark Calabria into the position to lead the FHFA and this conservatorship of Fannie and Freddie. Of which there has been a plan to recapitalize and release them back into private hands.
Well, the China Virus was supposed to crash us again and hurt the process of releasing the GSE'S and cause generalized shockwaves through the economy.
But (they) couldn't kill the GSE's during the Bush and Obama years, though they tried. And because Calabria strengthened their books during his term, Fannie even turned a slight profit in Q1 of this Plandemic and was prepared for up to ~ 12 or so weeks of shutdown per Mr. Calabria.
End of backstory: