Fannie Mae-No Politics (FNMA)

[Donotunderstand]

If F and F go through something down the road that is similar and governed by the rules of bankruptcy then - after unsecured debt - preferred stock has a higher water fall position than common

This assumes

There will be something down the road that is similar to an 11 or 7 --- and some of see that at 10% .... 60% all equity wins - 30% all equity loses - and 10% somehow F and F is treated like a normal bankruptcy

NOTE - with GM --- unsecured bondholders got 10 cents on the dollar paid to them in the form of new common stock (I think 15 cents after the Unions exchanged stock rights for cash to fund their new VEBA obligation)

So first getting to liquidation is unlikely and second if the GOV is involved the best example being the AUTOS (a kill and rebuild) says debt got 15 cents on dollar

AT GM equity be it male female - tall short - preferred or common got tossed in the garbage

but if we do down that road of a typical 11 or 7 - I would support 100% the big yank position that preferred gives the holder more chance for reward