Fannie Mae and Freddie Mac FNMA/FMCC

Thesis

Fannie Mae and Freddie Mac, placed into conservatorship in 2008 and effectively seized via the 2012 Net Worth Sweep, have already repaid Treasury's $191bn bailout with $301bn of dividends — an 11.6% IRR and ~$25bn above the contractual 10% rate. Pershing Square argues the conservatorship was always intended to be temporary and can now be ended without Congressional action. With $131bn of retained capital already on their balance sheets, Fannie needs only a ~$5bn IPO by YE2026 and Freddie a ~$15bn IPO by YE2027 to reach a 2.5% capital ratio appropriate for low-risk mortgage guarantors. Treasury's 79.9% warrants, left intact, could generate over $300bn in proceeds for taxpayers. The deck warns against converting the Senior Preferred to common — it would trigger litigation, prevent the capital raise, and slash Treasury stake value by 12-60%. Trump's first-term unfinished business now has a four-year runway and a consummate dealmaker.

SCQA

The three reasons

1. 1

   Treasury's warrants and residual stake could generate ~$300bn for taxpayers over time

2. 2

   Senior Preferred already repaid: Treasury has earned 11.6% IRR, $25bn above contractual 10%

3. 3

   Ending conservatorship needs no Congress — only Treasury and FHFA approval

Primary demands

• Release Fannie Mae and Freddie Mac from conservatorship within two years (Fannie IPO YE2026, Freddie IPO YE2027)
• Set post-conservatorship minimum capital requirement at 2.5% rather than the current 4% FHFA rule
• Deem Treasury's Senior Preferred Stock already repaid (11.6% IRR earned) rather than convert to common
• Exercise Treasury's 79.9% warrants and monetize over time (~$300bn estimated value)
• Limit government-granted benefits (SEC exemption, UST line of credit, Volcker exemption) and clarify ongoing backstop
• Execute re-IPO at NYSE listings; leave junior preferred outstanding or convert to common on negotiated basis

KPIs cited

Pattern membership

Where this document fits across the library's 12 rhetorical / structural patterns. Orange cells are present in this deck; neutral cells are not.

Precedents cited

• AIG bailout exit — 12% government profit, exited 2012
• Citi, Bank of America, JPMorgan, Wells Fargo TARP bailouts
• GM and Chrysler government bailouts
• Large global IPOs as comps (Saudi Aramco $29bn, Alibaba $25bn, Visa $20bn, Facebook $16bn, GM $18bn)
• Mnuchin's first-term suspension of the Net Worth Sweep (January 2021)
• Mortgage Bankers Association 2017 GSE reform white paper
• GGP restructuring (Pershing Square's own precedent)
• 4,000+ prior FDIC/FSLIC/RTC conservatorships cited by Cato/Vartanian briefs

Composition what's on the 104 slides

Visual + textual elements counted across every slide in this deck. Hover a box for what that element is; click to see every slide in the corpus that uses it.