Fannie Mae-No Politics (FNMA)

[capitalismforever]

Fannie Mae's Tangible unconsolidated Book Value is $37.45b. A tax rate change of 15% impairs that value by $18.18b which leaves $19.27b. This is the primary reason Pfd's are the best bet. With the way things are progressing with Treasury not stopping the NWS, common holders would be wise to think about a scenario in which preferreds recieve 80% of par and commons recieve nothing. It's very realistic at this point, in my opinion.

I opted not to include the true allowance for loan losses relating to the portfolio actually owned by Fannie Mae because it's de minimus and makes little difference in the outcome.