Fannie Mae-No Politics (FNMA)

[big-yank]

There is no meaningful support for FNMAS until $2.98 so, yes, I expect it to breach $3.00 without a favorable Perry Appeal ruling. There is a longstanding 2/1 equivalency between FNMAS and FNMA, so that would put common shares at under $1.50, right alongside my "hit" on the pfd side.

The point I keep trying to make is that preferred shares share the same fate as common share prices, other than smoothing out the volatility for risk that reposes in commons. The preferreds just have a safety net in liquidation preference. Traders (not investors) dump preferreds because they want a quick gain, not a wait until likely 2019 for a liquidation payout.

Rare for me to say this, but the dump over the last 2 days is not the hedgie players who at least have an investment goal driving FnF share ownership. It is the traders moving on to the next fast gainer, leaving a void for us to try and explain. Not a complaint on my part, just observations that in volatile times having a fund like Pershing owning 100M shares may be a very stabilizing influence.

I can't believe I just said something complimentary about hedge funds!

JMHO.