Fannie Mae (FNMA)

[FreeFNMA]

1. What does government on the line mean? If the government is on the line for five dollars he will wipe out shareholders? Govt on the line could mean alot of diff things. 1: FDIC deposit insurance for basically any bank 2: FDIC designations of too big to fail financial institution. if either of entities were to go under the govt would be on the line. This would have to be in the case of declaring Bankruptcy or being in imminent default.



2. Why should shareholders in a private organization be on the line for government folly? We didn't invest in the government. not sure how to answer this




3. How in the world can you interpret his words to mean that shareholders should be preserved. Even if you don't think he said the exact opposite, he definitely didn't say anything close to that shareholders should be preserved. based on his response that is how I took it. If Title II were to be executed for a failing institution where the govt is on the hook then shareholders can we wiped out. In the case of FNMA he clarifies that there are circumstances where this is not always true. In my interpretation he said that because he has no intention of wiping out shareholders. He would have no other motive to say that in that situation. If he intended to wipe out shareholder he just would of said yes, if Title II is executed the stockholders are wiped out and assets liquidated....period