So here's where I am on GSE options:

(1) Nothing
(2) Letter Agreement w/ increased caps & 1:1 (e.g., $101B / $73B)
(3) "PSPA Lite" (3rd party capital path if Biden/Yellen allow, probably need SCOTUS) ->
(4) GSE BIG BANG (3rd party capital path clear now) (1/8)

I don't think that much, if anything, has changed since post-election/FHFA cap. rule finalized. Sec. Mnuchin gave more, not less, information since: Senate/House hearings & comments to Bloomberg/WSJ. Gasparino "speculates" banker & DOJ input. So b/n (3) or (4) above, IMO. (2/8)

What COULD have changed to blow up (3) or (4) & bring up closer to (1), (2) or (3)?

Yellen convinced Mnuchin not to do anything? New stakeholder input added risk? Recent D.C. unrest? DOJ risk?

These don't seem like variables that could blow up a plan YEARS in the works. (3/8)

We have years of input from Sec. Mnuchin & Dir. Calabria that support GSE BIG BANG or, at least, a clear framework & path to retain & raise capital. This has been the most consistent support for investing in the GSEs - they will do what they said they will do. (4/8)

GSE BIG BANG protects & compensates taxpayers for backstop, adds stability to MBS & housing finance system & successfully executes the plan of Sec. Mnuchin & Dir. Calabria to fix the last issue from the 2008 crisis. Legacy. Congress can still reform. Everyone wins. (5/8)

Conversely, there are 2 excuses that could be invoked if they admit failure to execute their intent:
(1) Sec. Mnuchin & Dir. Calabria left the GSEs better than they found them
(2) GSE status quo CURRENTLY works well for most stakeholders (if ignoring potential future risk) (6/8)

I haven't sold any shares & probably won't. Thanks to a #YOLO $FNMAT <$5 trade in March, my IRR would still be 15%+ @ par in 2030, and there are 3 bites at the "litigation will fix this (enough for admin. to support eventual release)" apple. (7/8)

I don't manage other people's money and have not recommended this trade to anyone that I know personally, so don't face the same pressures as many involved in this trade.

Good luck to everyone. Enjoy another bloodbath today and every day next week until something happens! (8/8)