Fannie Mae-No Politics (FNMA)

[CatBirdSeat]

JumpStart GSE May Be a First Step Needed For The Courts To Effectively Handle The Matter.

Things To Consider:

1. The US Treasury (right now) can dilute the common (FNMA and FMCC) unilaterally. Based on current agreements. JumpStart GSE locks this down in Congress.

* Congress can't do anything, so NO Dilution of the common stock (FMCC and FNMA).

2. The Senior Preferred shares held by the US Treasury have a liquidation value of about only 1 Billion. If the Conservatorship is found to be illegal by the courts, then the US Treasury damn better not sell the Senior Preferred or there will be even more hell to pay.

* JumpStart GSE Stops any possible sale of the Senior Preferred Stock.

3. JumpStart GSE converts the Net Worth Sweep into a Guarantee Fee Sweep and is Capped.

* Any higher fees over the cap go back to GSEs, until either a vote in Congress or a motion by the Courts.

Key Point:

*Jumpstart GSE puts the Conservatorship back into Congress, not the US Treasury. Congress does not have authority to issue new shares, this authority is in Watt's hand, who can issue warrants to themselves. However, the GSEs board of directors never agreed to issue warrants.

* Equity (GSE common FNMA & FMCC) is the place to be now. Junior preferred stock probably already has been sold by hedge funds and swapped into equity.