Fannie Mae-No Politics (FNMA)

[big-yank]

I think you are close. But I think the government will renounce its warrants for 79.9% commonequity equity so common stockholders then own 100% of the liquidation remainder once secured debt holders and senior and junior preferred shareholders are compensated. This is the fast track to zero $$$ for commons. This voids the argument on ripeness for commons. This is why many of us only own preferred shares. It's like an insurance policy against the seeming majority of Congressional leadership that seems hell bent and determined to push both GSEs over the cliff.

This, of course, is under the assumption that the Appeals panel doesn't dismiss which seems more likely to me after the Judge Caldwell decision.

I have no doubt that litigation will go forward for years on this. But the preferreds see a payday immediately upon completion of the liquidation process so they get paid from the estate, while any other claimants must go through another whole round of filings, discovery, motions, blah, blah, blah. There will be no need to escrow any liquidation proceeds given preferred shareholders (which include the government to a major extent) since the government always has enough money to settle any eventual claims if any court rules to mete anything out in the future.

JMHO.