Fannie Mae-No Politics (FNMA)

[imtheshadow]

cb, great post, really. It highlights the fact that, if the warrants are exercised, ending the NWS is only a 20% victory - and then common will get crushed again on the recap dilution. The real taking occurred with the original PSPA and the 10% rate and the 80% warrants. NOBODY else got punished like that. Now, if most of Ps have a cost basis below $1, and we assume the gov't wants to maximizes the value of FnF and their warrants (knowing that they will be impacted by the recap dilution as well), then a deal that gets the ROI high enough for the low basis Ps might just be enough to stop the suits. The fact that all other shareholders had 80% of their value taken will be chalked up to collateral damage of the Great Recession (and that we should be grateful to get anything!)