A very fine analysis, m’friend.
The thing (and it’s not just one) that is so twisty weird about this is....
I believe Paulsen & Bernanke both claimed on Thursday/Friday last that both GSEs were “adequately capitalized”. I mean, just how far do we have to go before the conclusion that these two are lying under oath before Congress? Is it OK if your lies become apparent....SIX days after you state them, or do you have credibility if your statements only last THREE days before being proven wrong, LOL?
Secondly, and most ironically, this “bailout” is likely to achieve utterly NOTHING! Because true or false, the market already perceives these two to have government backing. Sure, nobody with functioning neurons who has done their research thinks so, but the market thinks so. So...what is this supposed to accomplish on any kind of long term basis? As a matter of financial prudence, the divs should be cancelled immediately. Now where do the stocks go?
This is just crazy unprecedented. I am almost sure the gov’t doesn’t have the legal authority to buy this stock in the open market, I mean, does the White House or the Fed have an Etrade account??