Fannie Mae-No Politics (FNMA)

[big-yank]

On part #1 of your question: it would be illegal to "settle" with preferred shareholders and then wipe out commons in any manner except an insolvency and liquidation. So, simply put, commons and prefereds are actually sleeping in the same bed... Fannie Mae is worth more alive than dead.

There are no absolutes to protect preferred shareholders against a toxic reform measure passed by Congress. Several have been proposed that would deliver a junior preferred payday of WAY less than liquidation at par. And, as non-voting shares, there is very little defense preferred shareholders have other than a class action suit that rarely nets any proceeds for anyone but the lawyers. So, in a nutshell, there is no sure thing in any of Fanniegate.

JMHO.