Fannie Mae, Freddie Mac Permitted to Boost Capital Cushions

The transcript discusses the challenges hedge funds face due to the net worth sweep, which requires Fannie Mae and Freddie Mac to send profits to the Treasury. It explores the political landscape, highlighting how Democrats like Elizabeth Warren may oppose policies benefiting hedge funds. The discussion includes the need for Fannie and Freddie to build capital buffers before exiting federal control, with a timeline extending possibly to 2021. Market reactions to political statements and the volatility of Fannie and Freddie stocks are also covered.

What is the main argument of hedge funds regarding the profits of Fannie Mae and Freddie Mac?

• They should be donated to charity.

• They should be used for affordable housing.

• They should be reinvested in the companies.

• They should be distributed as dividends to shareholders.

How do Democrats view the role of Fannie Mae and Freddie Mac?

• As businesses that should be privatized immediately.

• As entities that should remain under federal control.

• As companies that should focus on affordable housing.

• As tools for enriching hedge funds.

What is the earliest possible time frame for Fannie Mae and Freddie Mac to raise private capital according to Mark Calabria?

• First quarter of 2020

• Fourth quarter of 2020

• Second quarter of 2021

• Fourth quarter of 2021

What factor is emphasized as crucial before Fannie Mae and Freddie Mac can go to market?

• Government intervention

• Immediate privatization

• Process-driven approach

• Calendar-driven deadlines

What impact do comments from the Trump administration have on the stocks of Fannie Mae and Freddie Mac?

• They have no impact on the stocks.

• They stabilize the stock prices.

• They cause the stocks to plummet.

• They often lead to significant stock price increases.